Your business plan is all ready to go and now you just need funding. You want to submit a bank loan application to get the money you need, but you should first exhaust other financing options such as:
- Your personal financial resources;
- Taking on a financial partner;
- Getting funding from friends and family members.
The reason you want to exercise other options before bank loans is that bank loans accumulate interest and you will want to keep your debt down as much as possible when you get your business off the ground. But bank loans are a great way to fill in your missing financing and bring your business dreams to life.
Once you have gathered all of the financing you can from other sources, it is time to submit your loan application.
There are some tips you can follow which will make your business loan application process less stressful and more successful.
Ask For A Little More Than You Need
Your bank loan amount will equal the difference between the projected start-up costs in your business plan and the funds you were able to bring together. But it is always a good idea to ask for five percent more than you really need.
The bank may decide to approve your loan, but not for the full amount that you need. Asking for a little extra is not going to hurt your company’s debt position, and it will help to make sure that you get the real amount that you need.
Talk To An Associate About The Application Process
Under normal circumstances, the business loan application process requires:
- Completing the application;
- Submitting the application with appropriate supporting documentation;
- Meeting with the bank associate to discuss your business and the application itself.
Before you leave the bank with your application forms, be sure to sit down with a bank associate and go over what is expected of you. One of the most frustrating things that happens in the business loan application process is the loan getting stalled because the application is incomplete.
To prevent your loan from being delayed, go over the forms and all of the supporting data you will need to provide with an associate and make sure that you know what you will need to do to submit a completed application.
Submit Your Business Plan
When a bank considers your business loan, the bank is considering whether or not to be an investor in your business.
If you want to move the application process along smoothly, then include your comprehensive business financial plan with the application materials, whether the bank asks for it or not.
If you submit your business plan, the bank will read it!
The bank wants to know how you intend to grow your business and generate the revenue necessary to pay back your loan.
Whether you are a new start-up or you have been in business for years, you should have an updated business plan that you can submit with your loan application.
Review The Material Fully Before Submitting It
Too many business owners make the mistake of collecting information for their business loan applications, and then not reviewing the information before it is submitted.
During the process of filling out the loan application, it is common to leave entire sections blank that need to be filled it.
A comprehensive review of the material will prevent those mistakes from making it to the bank.
Remember that it can take a long time to get an answer back from a bank on your business loan. If you do not review your material completely before submitting it, then you will make that application process unnecessarily longer.
Don’t Take Shortcuts When Applying for a Business Loan
Bank loans are a convenient way to get the financing you need for your business. The business loan application process is very precise and demanding, but that is only because the bank wants to know all it can about your business before investing in it.
If you want to get the bank funding you need, then take your time and submit a completed application that the bank will just have to approve.
It will be the financial boost you need to take your business to the next level.