You’ve reached the point that most business owners come to as their business grows or has additional cash needs, where you are considering taking out a business loan.
Your bank might be the first place that springs to your mind, but you might find, if you haven’t already, that they are going to want a lot before they hand over that finance to you.
Spoiler alert! In this article we review, typically what to expect a bank to ask when you apply for a business loan and an alternative to finding finance for your business.
What information does a bank need when lending business finance?
Let’s start with some of the information that we might typically expect a bank to ask for when you apply for a commercial business loan.
A business plan
The banks usually want to see your plans and direction for the business. This means a watertight business plan showing how the business loan will be spent and what the returns will be. A business plan usually contains information about the business, your experience, cashflow projections and financial modelling. If you don’t have the experience or time to produce a business plan, it might mean turning to your accountant.
The bank may also want to know about various aspects of your financial position including:
- Any current and past loans and debt.
- Your bank accounts and credit cards.
- Details of any debtors, or those who owe you money, so that their credit can be checked.
- Details of any creditors, or those who you owe money to, to check for your payment behaviour.
- Financial statements, including your balance sheet and profit and loss statements. They may want to see past statements. Sometimes these will need to be audited by an accountant to prove their accuracy.
- Personal financial details, including details on assets and liabilities such as your home or investment accounts.
- Tax returns, including copies of past returns of your personal and corporate tax returns.
- Insurance information showing that your business is protected with adequate insurance.
Agreement on future matters
Most business bank loans will include loan covenants. These are agreements that you will operate within certain limits, such as limiting other borrowing or to maintain an agreed level of gearing. Therefore your application may involve your agreement to certain conditions.
An alternative from The Funding Store
Some sources estimate that up to 50% of small business loan requests are rejected by the banks. So, it is worth noting that your time and efforts spent collating this information for your bank application could go in vain if your application is not approved.
The good news is that we offer an alternative to the frustrations and efforts that we have noted above.
At The Funding Store we can help you access multiple lenders to find finance for your business.
Firstly, there are no complex forms to complete. Our experienced finance team will speak to you and take just the necessary information to complete your application on your behalf.
We know that flexibility is important to you, so we can discuss finding a business loan that allows you to spread your repayments over duration that meets your needs.
We also know that timing is likely to important and it is likely that you need your finance in place quickly to put to good use for your business. Your application can be completed and a decision received in less than 24 hours. Then depending on the lender that you choose, you could have the funds in your account in as little as 4 hours.
Contact our experienced finance team
If you would like to discuss how we can help you find finance for your business you can contact us 7 days a week, or request a call back via the form on this page.
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This article has been produced by The Funding Store for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by The Funding Store (MK) Limited. In all cases appropriate professional advice should be sought before making a decision.