Whether you’re just starting your first business, or you’re getting ready to invest more into your current business, there will inevitably come a time when you need a loan. The easier it is for you to work with your lender and the smoother your application process goes, the easier it will be to find the right loan, get the best service, and quickly receive the funds you need to get your business where you want it to go.
Finding a Good Match
The most important thing to remember is to make sure you use a lender you trust because you need to avoid predatory lenders. Do your research on the lender and ask lots of questions. When you begin working with a lender, evaluate the financing options they’re offering you to make sure they’re reasonable. Be suspicious if they’re not communicating with you regularly and openly or helping you with questions and concerns.
How to Be a Good Borrower
Once you’re certain you have the right kind of lender, here are three tips for ensuring your begin and continue a great relationship:
1. Have Your Documents Ready
In order to apply for your business loan, you’ll need to provide MANY documents so they can be evaluated. You’ll usually be given a list of the documents you need to provide ahead of time. It’s important that you have all of those documents ready for your first major meeting with your lender and other service providers since your representative will go over all of them with you. Not having all of your docs ready will at the very least stretch out the time of your meeting, wasting their time and yours. And if you’re not able to find a missing document quickly, you won’t be able to provide the information they need, which will stretch out your whole application process.
Typical documents you’ll have to provide are:
- Individual tax returns and your business’ returns for the last three years
- Bank statements and your business’ statements for the last three months
- Driver’s license
- Credit report
- Your and your spouse’s W2s for the last two years
- Your business license and incorporation documents
- An interim financial statement
- SS-4
- Promissory notes from past loans
- Loan statement
2. Embrace the Technology Your Lending Partner Uses
As the fin-tech industry continues to grow, more lenders are taking advantage of using online apps and cloud applications to keep track of documents and financial information for borrowers. The more you leverage the applications they provide, the easier it is for them to have an understanding of your account details and provide you the help you need.
For example, those who had already uploaded their most recent tax returns to Loan Mantra’s BLUE platform were able to more easily apply for COVID relief once the government made it available to small businesses. Those who hadn’t done that needed to update their documents first before they could apply. You never know when grants that target your type of business could be made available to you, and using the technology properly will streamline your application process and help you make deadlines.
3. Don’t Ghost Your Provider
Sometimes your provider will have questions for you and it’s important you get back to them in a timely manner. When you initiate a relationship with your lending partner, take time to let them know the best ways to reach you (phone call, text, work phone, etc.) and establish the best times to reach you as well. Save their number in your phone so that when they call you can pick up the phone instead of sending it to voicemail because you think it’s a spammer. Help them help you.
As well as these tips, having a business plan with important numerical data and a reasonable timeline will help your lending partner find you funding that best aligns with your goals and your growth plan. If you don’t have a decent business plan, it’s hard for your partner to get the direction they need to assist you.
Loan Mantra has helped many business owners secure the funding they need to establish and enhance their businesses. We appreciate questions and are also experienced in working with speakers of other languages. Contact us to find the right business loan for your needs.