Countless entrepreneurs require financing of some kind of another throughout the life of their company. This requirement for capital is in many cases the catalyst for growing a business and making it profitable. Just because there is a need for money, does not mean you should plow ahead into applications and loan reviews without answering some fundamental questions first.
There are specific questions entrepreneurs need to ask themselves and their lenders before proceeding ahead with a business funding application.
What is the primary need for funding?
This is obviously the most important question you need to ask yourself prior to proceeding with a business loan. Applying for funding because it is fast and available does not represent a plan of action and could cause unwanted issues later down the line. A good example would be using your business funding to pay monthly bills or fund projects that are losing money already, using the funds in either of these ways will act like a band-aid and the source of those problems should be addressed prior to receiving funding. Below are some examples of our clients' use of funds that we have seen the most success from.
- Hiring New Employees
- Marketing and Advertising
- Partner Buyout
- Working Capital
- New Equipment Purchase
What is your company's capital requirement?
After establishing your need for capital the next question is determining how much funding you'll need. It is important for you to fully understand the amount of funding you will require since asking for too little or too much could put you in a bad position. To understand how much funding you will require, you'll really need to look at the big picture. What will the value of the new customers be? How much will you make by hiring new employees? How much will materials cost for the new project? Breaking down the cost and profit you'll generate prior to applying for funding will put you one step ahead.
Does your company qualify for a business loan?
Understanding how and if you qualify for business funding before requesting a loan can save you a lot of time. Depending on the lending institution there may be different requirements for different products like
- Time in Business
- Minimum Annual Gross Sales
- Credit Score
Researching all the various lenders' different requirements and underwriting guidelines can be time-consuming and Bizlender has a dedicated account manager that will help you navigate the market.
What documentation will I need to provide?
Acquiring funding for a small business is not as difficult as it used to be and it does not demand much time to complete. Indeed, you will need to provide some documentation as well as an application providing information about your business. However, most alternative lenders make this process as hassle-free as possible. To make this process as pain-free as possible the team at Bizlender has created a pre-funding checklist of qualifications you may need to have ready. Bizlender wants you to be prepared for what is required during the application and funding process. Bizlender has put together a simple checklist of items you should have on hand before applying.
- Legal Business Name ( DBA, LLC, Corp )
- Business Tax ID Number
- Business Bank Account
- Business Phone Line
- Business Website
- Personal Credit Score 500+
- Trade References
- Last 3 Business Bank Statements
- Active Secretary of State Listing
Other items you may want to keep on hand
- Articles of Incorporation
- Tax Return
- UCC Filings
- Info of any Judgements of Leins
Bizlender has helped 1,000's of business owners secure capital and we can help you too. If your business has been in business for at least 6 months with over $5,000 a month in average sales and can provide the last three months of business bank statements. Researching alternative lending options? Check out BizLender online or call 855-404-3070. Offering lending solutions since 2013, their professionals put the emphasis on working smarter, not harder, using technology to fund small businesses in as little as 24 hours.