4. Determine exactly how much money you need
OK. You’ve made the decision to apply for a loan. But how much money do you really need? That’s a big question.
After all, you need enough financing to achieve your goals. But you don’t want to borrow more than you need. Because then you’d be paying an unnecessary amount of interest on your loan.
So talk to your team. Review your business plan. Think carefully about your specific goals. Then calculate a realistic estimate of the amount you want to borrow. It’s a critical step in the smart borrowing process.
5. Understand how lenders think
To improve your chances of success, it helps to understand some of the key issues financial institutions consider before they provide credit to a business borrower.
Most lenders will also want to review the following documents before they make a decision on your loan or line of credit application:
- Your business plan.
- Three years of financial statements, including your income statement, balance sheet, and cash flow.
- Cash flow projections.
- Your personal financial statements.
The more you can anticipate the questions and concerns your prospective lender will have, the better your chances of borrowing success.
6. Start planning ASAP
Even if you don’t need financing right now, you may need it in the future. So it makes sense to develop a sound business plan. And learn about all of the issues involved in business borrowing.
Then when you’re ready to buy much-needed equipment, make an important acquisition, or accomplish the other strategic goals on your agenda, you’ll know exactly what you need to do to enhance your chances for borrowing success.
And remember. If you ever need help at any point in the process, all you have to do is this:
Contact a Business Relationship Manager at ESL.
We’ll answer your questions, connect you with the right resources, and help you explore all of your options. So you can make a sound, well-informed decision about borrowing for your business.