Applying for a Commercial Loan – what you need to know
If you’re looking to start a business, or currently run a business, obtaining a loan can be a very challenging task. There are a number of things you can do to make the process easier and increase your likelihood of success.
Why Do You Need a Commercial loan?
It is worth spending some time to work out exactly what you will use the additional funds for, in your business. For example, will you use the money to pay bonuses or buy equipment? If you are taking out a loan, it is important to have a plan on how you are going to get a strong return on investment, on both the money loaned and the interest that you will need to repay. Without these
things written into a formal plan, the money can easily be swallowed up in miscellaneous costs.
Review your credit history
When you apply for a loan, your business must have a good credit history. If you don’t have a credit history, often a lending institution will want you to put up collateral for the loan. This is often in the form of real property or other assets. It is important to be very familiar with any potential defaults or poor credit history you may have in the past, so you can clear up any incorrect defaults that may hold you back from obtaining finance.
Organise your documentation
If you are considering taking a commercial loan, now is a good time to get your documentation together. This process can take some time, so it is good to begin as soon as possible. Some of the key
documentation will be a business plan outlining the history of the business, and what you plan to achieve with the increased funds. This business plan should include key aspects of your industry, such as: competitor analysis; your unique selling proposition; pricing structure; organisation chart and more.
In addition, historical financials and future projections further develop your case and likelihood of achieving funding.
The pitch
Once you have compiled the supporting documentation, you can use this information to sell yourself to lenders. A lender will be looking for key reasons to take a chance on your business and
provide you with a commercial loan. Key questions you will need to think about are: what makes your business unique; why should you take out a loan; how do you plan to repay the funds and the
return this will create.
A full service approach to manage the process
Finance Detective offers a full suite approach to manage this commercial loan process for you. We don’t consider ourselves to be mortgage brokers, we take a holistic approach to achieving long
term, personal and business, financial success. Our team consists of knowledgeable professionals that can provide you with peace of mind, that we will not only find you the appropriate loan, but work along side you to manage the whole process.
Get in touch with us today, to learn more about how we can simplify the process and help you achieve your business goals.