Getting approved for a business loan in 5 steps
While the process of finding and applying for a business loan might appear to be an arduous task, there are a number of practical steps businesses can take to increase the speed and crucially their chances of getting approved.
With the recent evolution in the commercial finance market, loans are growing increasingly accessible to businesses of all sizes. As well as the high street banks, there are numerous online lenders who can make lending decisions in hours to give businesses the funding they need to meet a range of objectives.
But it’s important to first consider a few things to make sure you end up with the right facility for your business.
1. Establish why you need funding
Is it to manage cash flow and navigate any gaps, buy stock or machinery, or expand premises and staff? Knowing exactly how much you’ll need and what you need it for will define the course of your search right from the off.
The clarity of your eventual approach will demonstrate you are committed and know what you’re doing, setting you up for success.
2. Review your existing funding
If you currently have an external funding facility in place, or have done in the past, you can use this as a base point. Evaluating and scrutinising these arrangements will give you a good indication of what you do and don’t want from your next provider.
For example, are you looking from more support from your funding provider? Could their level of service improve, or even their knowledge of your sector and business? Or are you simply looking to access more funding?
Recent years have seen the lending market evolve significantly, with a variety of products and facilities available to suit all different needs. However, this additional choice can mean decisions are harder to make, so factoring in time to research your options is a good idea.
Hilton-Baird Financial Solutions can effectively compare and contrast your existing facility with the wider market. Our expert industry knowledge and expertise allows us to liaise directly with funders we believe would be most suited to your business. This process could even help you to unlock further funding without needing an additional facility.
3. Consider the alternatives
As mentioned above, knowing the market and keeping up with the ever growing options for your funding can make all the difference. While loans and overdrafts might previously have been your only port of call, nowadays alternative lending is on the rise.
Knowing there are other facilities available such as asset finance, invoice finance and peer-to-peer lending – among many others – permits you and your business a bit more breathing space and the chance to get a more suitable facility.
There are two key areas you’ll want to focus your research; what kind of funding do you require, and what facility will work best for you?
Just because alternative methods of finance aren’t the bank lending you might be used to, it doesn’t mean they’re unreliable.
Having an open mind before entering searches and discussions can broaden your horizons and free your business from the sometimes inflexible, but traditionally relied upon bank loan and overdraft.
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4. Check the requirements
Once you are certain about the funding you want to apply for, take the time to go through the requirements of your shortlisted providers.
Chances are they will be very similar. This can help you confirm that the funding you are looking into is right for you.
At this stage you can begin to gather together all the relevant documents, information and evidence you will need to apply for the funding.
5. Final check
Before you make your application, it’s worth doing a final check. Put yourself in the decision maker’s shoes and try and identify any areas that could improve your chances.
This could include your online presence, any additional information that hasn’t been asked for but you think may be relevant, a sanity check of your financial forecasts or anything else you think may be useful.
If you’ve reached this stage and you’re still feeling unsure about your chances of being approved, it could be a good time to reach out to a specialist finance broker.
Talking to an experienced broker will relieve the chore of comparison from your shoulders, enabling you to concentrate on running your business while the broker introduces suitable lenders with different areas of expertise and competitive pricing structures. Good, independent brokers will be able to do this quickly and efficiently, prioritising your acute business needs and utilising their industry expertise to work with you and help you secure the right facility.
For more information about how Hilton-Baird Financial Solutions can assist as an award-winning commercial finance broker, call our team on 0800 9774833 or email email@example.com.