3 Ways to Improve Your Chances of Getting a Business Loan Approved

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Written By Larious

Larious is the Executive Editor of LowkeyTech. He is a tech enthusiast and a content writer. 

 

 

 

 

Last Updated on September 18, 2019 by Larious

When you’re trying to secure a business loan, the process can be long and stressful. It takes building a solid business foundation to convince a lender your company is worthy of their money. You’ll need to collect a good amount of background information on your company, in order to fill out all of the proper paperwork that comes along. And even after all of that hard work, you may still be rejected.

This may happen if you don’t come in fully prepared. According to the Federal Reserve, almost 60% of business owners applied for funding to expand their company. If this is your personal goal, then you should utilize all your potential resources to create a set plan. Then you will see the best results. We can look at a few key components you will need, that will increase your chances of being approved for a business loan.

Build a Strong Business

This may seem like a no brainer, but when lenders are deciding to give your business a loan, they will be looking at how well it runs. They’ll want to see a steady flow of income over a consistent period. This will prove your business is thriving well enough to need additional funding. The more money your company is generating, the less risky giving you a loan will be looking to any lender.

You will always need to stay on top of your numbers, to make sure funds never run too low or completely dry. You may also need to experiment to see what keeps your profits high. This may mean triggering returning customers, increasing prices or simply expanding your customer base. There are endless possibilities when it comes to growing your customer base, so don’t be afraid to mix it up to see what works best.

Improve Your Credit Score

Improving your credit score is inevitable when trying to procure funding for your business. A credit score ultimately shows the level of risk a lender takes when letting you borrow money. It is an accumulation of your payment history and debt to income ratio. The higher your credit score the better when owning a business. And even if your business credit isn’t high, because of the age of your company, make sure your personal credit shines bright in lenders’ eyes.

There are simple steps you can take, such as setting up automatic payments to make sure you never miss another payment again. Having on time payments will increase your score and show lenders you are on top of your financial game. In order to better your chances of getting accepted, try and pay off any outstanding debt you have. This will boost your utilization score dramatically, which is the ratio between what you owe and your certain limits on each account that is open.

Another good idea is to have different types of credit open in your portfolio. This will show lenders you are able to juggle multiple types of financing. Make sure to only open accounts that serve a purpose, because this plan can backfire in time if you aren’t careful with spending.

Boosting your credit score will not be an overnight process. If you have the time and extra funds it might take to increase your score, then more power to you. A high credit score will only attract more lenders, but don’t be too discouraged if your score isn’t, let’s say, over 700. There are resources like business loan consultants that can step in, to relieve some stress during this loan process.

Utilize Professional Help

If you are trying to obtain a loan for your business, you will obviously need specific documents to show what you need funding for. If you have built up your business to the best of your ability, getting help from a business loan consultant should be your next move. Once your business is up and running, meeting with a business loan consultant will be a great idea to help acquire proper funding. The loan consultants will act as guides to ensure your business is in the best position to achieve funding goals.

When you take this step, you will be given a direct path to directly obtain the funds, all within the same day! Their team will relieve the frustrating aspects of applying for funding by providing excellent customer service. The services that are provided by this company will also eliminate all the extra credit checks that come along with applying for loans. This is one hassle you’ll be thankful to not have to deal with for sure!

So even though acquiring a business can seem like a daunting task, there are several steps you can take to make the process much easier. With the help of a business loan consultant, your company will have same day funding estimates and approvals for loans to help further the expansion of your dreams. And when you step into this process with a solid business and positive payment history, the chances of obtaining a loan will be even more substantial than before.

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