Introduction
Many businessmen require financing so that they can expand their business. They also need extra cash to hire more employees and to keep the business operations running smoothly. For a start-up business, most owners will loan apply so that the business can be started, while a going concern will seek to expand the business and money for capital investment. The most common financing is getting a loan from a commercial bank. Commercial banks that give out loans are doing this as a business and so they would require a businessperson to demonstrate their ability to pay off the loan apply according to the terms that have been agreed upon.
About loan apply
The first thing that you have to do when you loan apply is to complete an application form. You need to provide the lending institution with detailed information concerning your business, as well as the reason for which you are making an application for the loan, and what the money will be used for. You also need to provide information about the value of assets that you are buying, any outstanding debts that you may have, and your business and management team’s history.
The second thing that you need to do when you loan apply is to provide the lending institution with personal information for your officers and owners of the business. Many lending institutions have made personal guarantees a requirement apart from liens on security. The people who are going to be responsible for handling the borrowed money will need to demonstrate that they have a history of fiscal responsibility, and this is especially true for a start up business loan. Criminal convictions, bankruptcies or a poor credit history can result in the business being denied the loan
The third thing that you will need to do when you loan apply is to provide a comprehensive business plan demonstrating that your business is more likely to succeed. The business plan should contain information about products and services that the business offers your markets, production and distribution as well as your management practices. This information will demonstrate the likely success of your business.
Fourth
The fourth thing that you need to do when you loan apply is to provide the lender with financial and tax statements for your business. Tax returns will demonstrate that you have a history of generating income, while an income statement, balance sheet and cash flow statement will shed some light on the financial health and stability of your business. For a small business start-up, these documents are not expected.
Finally
The fifth thing that you need to do when you loan apply is to provide the bank statements for your business, total assets, and your current accounts. The lender will need information about any assets that you might use as security for your loan. You should also provide proof that you have complied with all aspects of the law. This means that you should provide licenses, accreditations and any other certificates. Once you have all these documents, you can now gather them and present it to the lender along with the completed loan application form.
