With banks providing $14 billion in startup investment every year, loans and lending are a huge part of helping businesses operate. If you're a new business or a small business without a lot of assets, you might need an injection of cash to get the ball rolling. Getting an unsecured business loan could be the answer you're looking for.

If your construction company needs some new equipment or a little bit of extra cash to help finish the next major project, you might need a loan. The problem is, if you're worried about getting over a financial hurdle, you might not have the collateral necessary for a typical financial institution. An unsecured business loan allows you to get the funds you need in exchange for betting on your personal assets.

Here are 6 essential steps to applying for an unsecured loan.

1. Choose a Lender to Suite Your Business

Between the number of small financial groups who are willing to bet on a small business and the proliferation of online lenders, there are lots of options. Getting to know what kinds of lenders work in the construction business could give you a leg up. You could start your search by simply asking colleagues who they've worked with.

Online lenders who offer an unsecured business loan option are a good choice because their application process is usually simple. You often get an immediate response and a quick payment.

Check out large commercial banks. While most will be reluctant to lend based on the risk associated with these loans, some will be more willing.

If you're looking for a small amount of money, you could find a direct lender who can offer what you need. You might even come across someone who fully understands your industry and is more sympathetic to your needs.

2. Understand Your Own Credit Risk

Often people who need an unsecured business loan perceive themselves as being a credit risk. This could be because of the age of your company, a meager asset holding, or because of a previous hardship.

Get a reading of the credit score of both your company and your individual assets. If you make sure that your company is always paying their bills on time, you'll be highly rated and favorable to lenders.

If you've got some major outstanding loans, you might need to resolve them before you're able to get a loan. An unsecured loan might be able to help you finish a major job that can then help pay off those loans.

3. Organize Your Statements

Depending on the loan provider's needs, you might have to provide some financial statements, business and personal. Make sure you get all of your statements in order in advance of your application.

Measure your cash flow, margin, debt load, and have your accountant look over your findings. If your statements have been audited by a CPA, loan providers will look favorably at this.

Some lenders might not need these statements or if they do, they might not need to be reviewed. See what a typical application looks like to your lender. After that, you can make sure you pivot your loan application toward what your provider is looking for.

4. Get the Details

Your business loan will require lots of the most granular details of your business. You'll need to have your tax ID handy as well as the registered legal name of your business.

If there's a legal structure, get to know how it runs. Your executive officers should be well known to you. If you can get your hands on projected financial statements, you should provide them to your lender.

If there's a recent credit report for your company, that could help to seal the deal. Let them know what potential collateral you could offer if any.

5. Have Real Numbers Available

You should be ready to give your lenders a specific dollar amount of what you need. Have a breakdown ready of how every dollar will be spent.

If the loan is for equipment, list what kind of equipment. If it's for capital expenditures, write out some details.

For loans that lead to expansion, have a more detailed explanation. Also, have a detailed explanation of this proposed expansion. If you're having to get an unsecured business loan to help your business to grow, have an explanation on how this growth will sustain and expand your business.

6. Check Your Online Presence

Expect your potential lender to do some research on who you are and why you're applying for an unsecured business loan. Even if you've got no dirt for them to find, you should still clean up all of your profiles.

If you're the principal business owner, your profiles should be gleaming and shiny. Put up your best photos on your business listings and see if you should delete any questionable or less than stellar experience.

Check out your company's website. It should look good and load on phones and tablets easily. Make sure all of the information on it is up to date.

Check out social media and professional networks. If you use LinkedIn, see what kind of presence your company has. For any business directories, make sure you've got a reasonable number of positive reviews.

You should look your best because you never know who could make a judgment based on something they saw on the internet.

Getting an Unsecured Business Loan is Simple

Once you've completed this checklist, you should be ready to sit in front of a lender, digital or real. Being honest is always the best approach in business. Be upfront about how much money your company is or isn't making.

If your company is ready to get over a financial hurdle, contact us and we can help you get the money you need in the time you require it.

Recommended blogs to help you get funding

How to Access the Best Loans for Contractors

10 Questions to Ask When Applying for a Working Capital Loan

How to Qualify for Working Capital Business Loans

 

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