What You Need to Know to Qualify for a Business Loan
With so many lenders to choose from, qualifying for a business loan today is easier than ever. However, loan programs and lending criteria differ from lender to lender, so knowing what type of loan your business needs will help narrow down the many options.
One great option for businesses is working capital lending, which can fill those immediate cash flow gaps that your business must cover to operate successfully or even expand. These gaps may include:
- Lulls in payment from customers
- Additional material needed to get a contract started or keep it going
- Employee payroll or expenses such as outstanding invoices
- Advertising costs to help generate more business
Starting the process of qualifying for a loan can take anywhere from two minutes to two weeks. Your research should include determining whether you are working with a direct lender and how quickly the lender can get you funded. Your business should not slow down but keep building.
At Express Capital, receiving a working capital loan is surprisingly fast. It takes only two minutes to qualify, and you can receive funds the same day.
Want to Qualify for a Small Business Loan? Here’s How to Do It
The small business loan approval process is well known in entrepreneurial and financial circles for being slow and challenging. This leads many would-be entrepreneurs to worry about whether they can afford to grow their business, and many current business owners looking for options.
The truth is, the loan process is only as difficult as your lender makes it. While there are legacy institutions with very stringent requirements for long-term loans, they are typically designing large loan packages that are repaid over long periods of time. Shorter term loans, credit arrangements, and alternative forms of financing can often be arranged much more quickly.
At Express Capital Funding, the approval process is streamlined to help you access loans quickly.
Preparing to Apply for Loans
Whether you are going for a traditional business loan, a cash advance, or a working capital loan, the process of preparing to take on new credit is fairly familiar. Below is an example of Express Capital's loan process. Can expect the same with other lenders with some variations in the speed of the process. Traditional lenders take 2-3 weeks as most online lenders may take 3 days.
Be sure you will have the incoming cash flow to take care of the payments.
Many lenders will require a business to have $9,000 or more revenue each month, plus a bunch of other documentation to prove income including collateral. Express Capital makes it simple and easy for a small business. The revenue requirement is $7,500 per month and no collateral is needed. Get the full requirements to get a loan.
It’s suggested that you check credit your as to verify the information is correct. Business credit scores can be more difficult verify than personal credit scores.
Of course, if you have a history of borrowing for your company, chances are very good that your credit is in order. In that case, the next step in your preparation is to find a lender that works for you. Applying for a business loan is much easier when your lender has designed a loan package to work with your needs.
Having good business credit is not limiting you from obtaining funding. If you have no business credit or not so great credit, Express Capital will still lend to you. Approval is based on ability to pay and recent transactions are determined.
Know Your Business Needs Ahead of Time
To prepare you, here are a few simple questions an Express Capital loan specialist will ask, brokers will require a lot more.
- What are you borrowing the funds for?
- How soon do you need funding?
- How much funding do you need?
- How long of repayment terms do you need?
- What structure of loan would work best for you?
“My experience has been very personable since my loan specialist, at Express Capital, has graciously seemed very interested in not only our business but us as individuals.” Amanda G. - Contractor
How to Apply for Business Loans from a Traditional Bank
There are a financial records you will need to pull together to make a complete loan application. Regardless of where you go for the loan, banks are likely to want to see an extensive list of items, but not every lender is going to put equal emphasis on every element in the list.
- Bank Statements: This should be easy enough to understand, right? Your bank statements allow lenders to understand what your incoming and outgoing cash situation looks like, along with the size of any reserves you hold. That makes it easier for them to understand that you can afford to repay the loan in a timely manner.
- Balance Sheet: In addition to your actual bank statements, many lenders want to see your company’s balance sheet. These are important because most businesses have money outstanding in accounts that are unpaid, and they also tend to use credit and other strategies to improve their financials. By seeing the business financials, banks can understand what the bank statements alone will not tell them about your cash flow.
- Proof of Time in Business: Sometimes banks have requirements that companies be a certain age before they can borrow in certain ways. The typical number is two years for a standard business loan, although credit is extended in other ways much earlier by many of those same institutions.
- Your Personal Credit Report: While your business needs its own credit, if it does not have its own credit score, your personal credit score will often be reviewed and held at a much higher standard.
- Tax Returns (Personal and Business): If a profit/loss statement and balance sheet are not requested, then lenders are usually quick to ask for tax returns that demonstrate a certain income level. Some banks will ask for both, but many will not.
There are several other requirements that banks sometimes put in place for loans, including requirements about the submission of a business plan, proof of property ownership, or even collateral for the loan. These requirements vary quite a bit from bank to bank, though, and they don’t necessarily make up the core requirements most lenders use.
As you can see, the standard requirements to obtain a loan from a bank are quite substantial. Quite possibly the best option is to look for an alternative funding source. Such as a direct lender that requires little documentation to make it fast and easy to obtain funding for your business.
Qualifying for a Small Business Loan with Express Capital Funding is Easy
Every lending company you work with will have their own specific set of requirements.
Our company approach is designed to make the loan process as easy as possible for our clients. When you first contact us, a company representative will get in touch to interview you about your business situation and give you a quote. This representative will work with you through your loan application and will remain your point of contact for future loans. Express loan approvals require the following:
- Six months of bank statements showing $7,500 a month in deposits for 3 months
- We have a simple and short ½ page application and require 1 year time in business
Our loans are available from $5,000 to $150,000, and they scale with the needs of your business, making it easy to get what you need whenever you apply for more credit. Whether you are looking to make a material purchase, cover payroll, financing your next major advertisement, or you simply need to expand your operations, our loan application is designed to be easy for you to navigate.
If you’re getting ready to apply for a working capital business loan, contact us today for more information. Our loan specialist can explain all your options.
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