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Winning Over the Lender

As you develop your small business, there may come a time when a business loan is necessary to help you meet your growing objectives. Maybe you’ll need extra cash flow, more equipment, or even a property. When this time comes, it’s best to make sure your business is viewed as a great lending prospect so you can secure the business loan you need.
 
When lenders look at loan applicants, they want to see that the business has a solid history. This means being in business at least two years and displaying that there is stable ownership and a steady management team. Lenders want to be reassured that the owners and managers are experienced and that there is a professionally prepared business plan in place. If you need help creating a business plan, sba.gov has an online tool available for free. Click here.
 
Lenders also look for assets. A good credit history for both the owners and the company is essential. Can you show that you are a creditworthy business owner? Maybe you are new to this particular business, but you may be able to show you’ve had success managing or owning a business in another field. Assets also include financial reserves, collateral, and solid cash flow to support paying off the loan that has been requested.
 
Make sure you are prepared with a profit and loss statement (P&L) as well. If you’re not already keeping these records, get started! This summarizes your revenues, costs, and expenses for a specific time period. Lenders want to see reliability, professionalism, and ethicality in your P&L statement. This means they want to see evidence that you will make promised payments, that your reports are complete and accurate, and that you truthfully report all numbers.
 
Obtaining a business loan will require that you show steady or growing revenues from a diverse customer base, that your business is profitable, and that you have a strong balance sheet with an appropriate level of debt. SBA.gov is a wonderful resource for small businesses if you need some extra help getting everything organized.
 
Once you’re ready for a business loan, FORUM Business Services is happy to help you meet your goals. Please give us a call at 317.558.6299, then select option “0.”

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