Financing Your Dreams - How to Apply for a Small Business Loan and Get Approved

1. Financing Your Dreams: Financing Your Dreams: How to Apply for a How to Apply for a Small Business Loan and Small Business Loan and Get Approved Get Approved Biz2credit.com

2. 6 Types of Business Loans 6 Types of Business Loans 1. 2. Equipment Loans 3. Business Lines of Credit 4. SBA Loan 5. P2P Loan How to Apply for a Small Business Loan How to Apply for a Small Business Loan Short-Term Loans for Working Capital Whether you apply for a small business loan in a branch location or try to get business loans online, most lenders require the same information from borrowers. Here is a list of basic information you'll need to get approved. Credit score Having good credit is key to getting the best interest rates and loan terms. Typically, the higher your credit score, the more likely you are to get approved when you apply for a small business loan. If you're unsure of your credit score, many banks and websites offer free FICO scores. Additionally, all Americans are entitled to a free credit report once a year from each of the three major consumer reporting companies: Equifax, TransUnion, and Experian. Request your copy from AnnualCreditReport.com.

3. Bank Statements Lenders review your bank statements to verify income and monitor your cash flows. They also use this information to determine if you have the cash reserves necessary to make payments on time. When you apply for a small business loan, lenders often require online access to your accounts or that you provide copies of the last three months of personal and business bank statements for all bank accounts. In some cases, the lender may need up to 12 months' bank statements to see a full year's worth of income and payments. Personal and business tax returns Tax returns provide an inside view of your income and expenses. This formal document presents information in a uniform fashion across all industries and allows the underwriters to verify information that may impact your ability to repay the loan. Year-to-date Income statement Since many borrowers apply for a small business loan during the year and not just during tax time, a year-to-date income statement is required. The profit-and-loss statement displays annual revenues and expenses for the year, highlighting whether a business is making a profit. Balance sheet While an income statement covers a specific period of time, a balance sheet lists the assets and liabilities of a company and the owner’s equity as of a particular date. Assets are what you own, liabilities are what you owe, and equity is the difference between the two. When you apply for a small business loan, the lender can analyze your balance sheet to look for debt obligations and locate assets that may help it repay the loan if you stop making payments.

4. Cash flow statement This financial document indicates the amount of cash entering and leaving your business in a given timeframe. A properly prepared cash flow statement will exhibit how much cash a company has on hand for a specific period. It also breaks down your cash flow into three primary categories – operations, financing, and investing. Business plan Writing a business plan with a standard structure entails going into considerable detail about why someone should invest in your company or lend it money. Business plans typically include a marketing strategy, SWOT analysis, use of proceeds, and biographies of owners, executives, and key employees. The business plan should also include a financial forecast to illustrate revenue and expense projections and how the money being raised will be used. When applying for a small business loan, it is a good idea to write an executive summary that summarizes your business plan. The executive summary should also include how the money will be used and how it will be repaid. It should be no longer than one page long to keep the attention of the reader. Read Our blog from here - Financing Your Dreams: How to Apply for a Small Business Loan and Get Approved