Tip 1:
While undertaking the procedure of obtaining loans, many applicants neglect the vital parts required to obtain financing. In general, don’t try to get a business loan or line of credit until you’ve arranged for the following:
1) An excellent Dun and Bradstreet summary of your business with no delinquencies of any kind;
2) Two years of personal and business tax returns;
3) A current balance;
4) No less than 700 FICO points on principal with no current delinquencies, decisions, tax liens, or any other negative details.
Your priority is to make sure you are fully prepared for the loan process right before you start the application process – proper loan planning is just as, if not more important than simply preparing a funding application.
Tip 2:
Above all, before you apply for a business loan or line of credit, be aware of potential mistakes. The key factor in determining misrepresentation is the borrower’s intent to provide the wrong details to the lender. Is this particular misrepresentation intentional or unintentional? What is the degree of incorrect information and facts provided? Does the misrepresentation materially alter the application? To put it another way, would the lender probably have considered the application in some other way considering that the delinquency was present? It is best to check all vital requirements just before submitting your application to the lender to avoid these discrepancies as well as potential loan scams.
Tip 3:
With today’s realistic business loan scenario, you can be more specific than any other that lenders are competing on your particular necessary needs. Making the right decision regarding the lender for your business is still not everything before the application is approved. Does the lender typically lend money to your type of business? Is the lender an expert in national geographic areas or is it a national lender? What is the documentation required by this particular lender as they vary? What is the deadline for an approval? There are essential queries that must be considered by the borrower before making and approving an application. Deciding on the most suitable lender for your field is definitely of utmost importance.
Tip 4:
Many borrowers have a very intense mindset regarding applying to other lenders when acquiring their own business financing needs. You simply don’t need to apply to multiple lenders, and doing so will lower your personal FICO score, as each credit inquiry will lower your score by 3-4 points. It can be seen that when clients consult with ten or more lenders a few days or weeks apart, this greatly reduces their own credit scores. This is most destructive in the event that they make the same mistakes on a few questions which leads to the decline of the rest!
Once this happens, the next lender will look at the application and wonder why you’ve made numerous applications and why you weren’t approved, encouraging them not to approve you either! Be sensible about your credit and don’t apply to more than two lenders at a time to avoid lowering your credit scores. Once we receive a decision, if it’s really negative, let’s analyze the reason, correct it, and then apply again to another lender. Know that in most cases, once your business is turned down on a business loan, you generally can’t go back and apply again with the same lender for at least six months, and if you do it accordingly, it’s very likely to be rejected again due to the fact that the request has been “red flagged”.
