Applying for a Business Loan? Here’s a Checklist for YouEdited on December 20, 2016
Every business owner must have had had the thought: I really could do with more capital at this juncture. This is because all SMEs at some point are likely to need some financial boosting so they can move their business to the next level. A business loan checklist can help determine your specific needs. Here are some common pointers that might come in handy:
- What type of loan does your business need?
Choosing the most appropriate loan for your business is crucial, and while your banker should be able help to advice you on which one is the best, it’s good to have an idea of what you’re dealing with before you make the final decision.
Prior to applying for the loan, know what you want. There are so many business loan types in the banking and finance market, and this can be confusing if you don’t take some time to get familiar with how all the different products work. Different loan products suit different needs and requirements. Therefore, make sure you understand loan-related aspects such as change in interest rates; for example, how the Central Bank of Kenya capped interest rates at 14.5% this year.
Basically, be sure that what you are seeking to do with the loan, what results you are aiming at, over what time frame, and how you’ll organize loan repayments in a way that suits your business needs. Therefore, do your homework, be prepared, know your limits and make an informed decision.
2. Is your documentation in order?
The most likely back-up you’ll need to get a credit facility are, bank statements, profit and loss statements, sales stats, cash flow, business plan, competitor analysis, insurance, growth patterns and client demographics, management team and board detail. Basically, get all documentation that tells a story of your business. This will enhance your credibility to your lender and increase the chances of your loan getting approved.
If you’re looking to apply for a business loan,
- Consider the whys, where and when. Knowing exactly what you want to achieve, how much financing you need, how you want it, and how you want to service the loan facility should be the first step in seeking a business loan.
- Research pays: How can you have a way forward and know what kind of loan you need without doing an intensive background on the lending market?
- Prove your credibility: A lender will want documentation to prove that you have a legit business and you’ll be able to service the credit facility given to you. Therefore, ensure your books are in order, know where all the information you need is found and how to interpret it.
- Feel the Love: Don’t be afraid to show how much you love your business. The human aspect of any business is important and bank managers want to see your passion and commitment.
For more information about accessing credit facilities for small businesses, email us at firstname.lastname@example.orgCategories : Entrepreneurship