Before you sit down at a bank — or in front of a keyboard — to apply for a business loan, there are a few questions you should ask yourself. How much money do you want to borrow? What is the loan for and why do you need it? Those might seem like obvious questions, but many business owners don’t have the answers when they apply for loans.
You must first figure out what you need to use the money for — business expansion, equipment purchase, debt payoff, inventory — and then determine how much you can realistically afford to repay, making sure you include all fees and interest. If you’re looking at a term loan, for example, you can use an online amortization schedule calculator to estimate your monthly loan payments.
Ideally, the only time a business owner should take out a business loan is to increase sales or increase profit margins.
There are three main factors that traditional lenders look at when they consider your business loan application:
- Your personal credit score
- Time in business
- Annual business revenue.
Before you apply for a loan, make sure you fully understand the process and are aware of all your borrowing options. Research different types of loans and their approval requirements so you have a good idea of what will work best for your business.
FIRST DOWN FUNDING IS READY TO ANSWER ANY QUESTIONS YOU MAY HAVE REGARDING BUSINESS LOANS.
This post was written by fdfadmin