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Applying for a business loan – 6 tips to strengthen your application
Forward Thinking Business Blog –
If you can’t fund business development and growth from your own resources, the next port of call is usually a bank or alternative finance provider. Teresa Campbell shares 6 tips to keep in mind when applying for a business loan.
Access to finance is the lifeblood of every business. Whether you are just starting out, purchasing new equipment, expanding into new markets, developing or seeking to fund growth, you may well be seeking to secure finance in order to realise your goals.
For many businesses, finding that finance is likely to mean approaching your bank or an alternative finance provider for a loan. Financial Institutions like to know who they are dealing with and will look for evidence that your business is well-managed and that the loan you are requesting is reasonable.
‘Be clear about your objectives before approaching your preferred finance provider.’ says Teresa Campbell
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Here are 6 tips that will help strengthen your loan application:
- Explain who you are. Make sure that your application provides details of your owners, management team, company achievements and track record.
- Explain what you need. How much finance are you looking for and what do you intend to use it for?
- Explain how your business is managed and how you handle risk. Do your financial projections show that you have allowed for — and are managing — the potential risks that could impact your business? Are you over-exposed to any suppliers? Are you over-reliant on any single customer? How are you managing Brexit risks?
- Explain your rationale for the duration of the loan. Will it be a long term loan or a short term facility? Be realistic about your requirements.
- Explain any existing commitments. What other loans do you have? Can you show that you are meeting your commitments and that you have capacity to service repayments on this new application?
- Explain your collateral. What security can you provide if required?
Be clear about your objectives before approaching your preferred finance provider. Do your homework and be ready to support your application with accurate financial information and relevant evidence of your management capability.
If you need help when putting your application together…
