For businesses looking to secure loans, the turndown process can be a discouraging experience. Banks and other lenders are often hesitant to approve loan applications due to risk factors associated with the business and its owners. Fortunately, there are steps that businesses can take in order to increase their chances of securing a loan. In this blog post, we’ll look at five ways businesses can avoid loan turndowns and maximize their chances of success when applying for loans.
Create a Comprehensive Business Plan
First, having a clear business plan and realistic financial projections is key. Before applying for a loan, businesses should put together an up-to-date business plan that outlines their goals, strategies, and operations. Financial projections should also be prepared to show lenders how the business will use the loan proceeds and repay them over time. This can help convince lenders that your business is a viable investment.
Keep Accurate Records
Second, it’s important to have clean and accurate business records. Lenders want to be sure that the information they receive is accurate and up-to-date. Make sure all books are balanced properly and financial statements are regularly audited by an independent certified public accountant (CPA). This will help ensure your accounts reflect the true financial health of the business and help you secure a loan.
Demonstrate Positive Cash Flow
Third, businesses should demonstrate their ability to repay the loan. Lenders need assurance that the business will be able to make its payments on time. Make sure to include cash flow projections in your application that show lenders how much income the business is generating each month and how it can be used to repay the loan.
Creditworthiness
Finally, businesses should evaluate their creditworthiness. Before applying for a loan, it’s important to understand your credit score and review any negative entries on your credit report. Taking steps to improve your credit will help demonstrate to lenders that you are responsible when it comes to money management.
Work with a Private Lender
Private lenders provide customized solutions without the red tape or prohibitively high requirements of institutional lenders. The application process is streamlined, with faster closing times, and more flexible structures – offering businesses what they need to reach their big milestones.
If you need financing for your business, talk to the team at Synergy Commercial Funding. We can accomplish what traditional lending channels cannot.
Are you looking for financing options for your business? If so, Synergy Commercial Funding is ready to help. We offer a wide range of commercial finance services to help businesses of all sizes achieve their objectives, whether it’s purchasing new equipment or purchasing a new commercial property.
Interested in creating a second line of income just by talking with your existing network? Want to help the economy grow by helping businesses around you grow? Think about becoming a Synergy Commercial Funding Partner. Visit our "Referral & Broker Program" to learn more.
