Unlock the secrets to securing your checking account bonus with our expert guide. Discover five simple yet crucial steps that can make the difference between missing out and cashing in on your bank's promotional offers. From navigating terms and conditions to setting smart reminders, we've got you covered.
Step 1: Determine Your Financing Needs
Before you apply for a loan or choose the type, you need to assess your business's financial requirements. You don't want to borrow more than you need. You also need to know the purpose of the loan, such as working capital, expansion, or equipment purchase.
This information affects the type of business loan you need. Common loan types include:
- Lines of credit: Arrange a line of credit before you need it, and when you do, you can immediately access the funds.
- Equipment financing: From a pizza oven to a server, equipment financing uses the equipment as collateral and funds a specific item.
- Vehicle loans: Financing for a company vehicle.
- Commercial mortgages: Financing for a commercial property.
- Term loans: A loan for a specific amount, and repayment is broken up over a set number of payments.
- Business acquisition loans: A loan designed for a company that wants to buy another business.
Step 2: Check Your Credit Score
You need to know your credit score. It gives you a clue as to whether or not a loan will be approved and the rates you can secure. A business owner with poor credit faces significant challenges when it tries to get a loan or other funding options.
You can start by obtaining a copy of your credit report. Check it for any errors that might be on it. If you have bad credit, MIDFLORIDA may be able to help you rebuild your credit. Your current bank might treat you like a checking account number, but we won't. It's time for a new financial institution!
Step 3: Explore Loan Options
As a business owner, there are various loan options available. These include:
- SBA loans: The Small Business Administration can help you get a loan if you meet certain criteria. Business lines of credit: This is a great option for temporary cash flow problems.
- Business credit cards: These cards can give you the purchasing power you need, but be careful of high interest rates.
- Commercial real estate loans: Like a mortgage for a home, these loans allow you to buy commercial property. If you know what business lenders look for, you can have an edge in the application process.
Step 4: Prepare a Business Plan
A well-crafted business plan shows prospective lenders where you are, where you want your company to go, and how you plan to get there. It can be the difference between approval and rejection. Your business plan needs to include your business strategy, financial projections, and repayment plan. Every successful business starts with a business plan.
Step 5: Gather Financial Documents
As part of the application process, there are necessary financial documents typically required by lenders, such as:
- Financial statements
- Tax returns
- Banking records
- New Account Documents
- Certification of Business Owners
You should have these on hand when you begin your application.
Step 6: Shop Around for Lenders
You wouldn't buy the first house you see, and you shouldn't check rates from only one lender. Each lender has something different to offer you, making it essential that you compare offers from multiple lenders. You need to consider interest rates, loan terms, fees, and eligibility requirements.
Step 7: Complete the Loan Application
When it's time to complete your loan application, you want to ensure that you provide all the necessary information. Also, you want to make sure all the information you provide is honest and complete. The lender will find out if you fudge any numbers, and you can lose out on getting the financing you need.
Step 8: Submit Your Application and Await Approval
With your application complete and necessary documentation in hand, it's time to submit your application. Your online application might require you to upload your documentation, while a paper application can be taken to the lender. Completing an application is just the first step in getting approved for a loan. The lender may have additional questions or ask for more documents.
Step 9: Review and Accept the Loan Offer
Once you have a loan offer, you must carefully review the loan terms and conditions before accepting the offer. You can seek legal or financial advice before accepting if you feel like you need it.
Step 10: Manage Your Loan Responsibly
After securing the loan and receiving the funds, your attention should turn to making timely payments and managing cash flow to avoid default. This can help improve your credit score and help you get another loan in the future.
Additional Resources
Financial calculators help businesses evaluate loan options and make smart financial decisions. You can contact a business banker for personalized guidance. Financial literacy resources can help you learn more about financial topics, so you can keep your finances in order. If you want to open a new account with MIDFLORIDA, you should review our new account documents checklist
MIDFLORIDA Credit Union Can Help You Make Good Financial Decisions
When you're applying for a business loan, careful planning, and preparation can make a big difference. You need to be ready to answer any additional questions and provide requested documentation after submitting your application. MIDFLORIDA wants to help you achieve your business goals. Contact a business banker today for personalized assistance with the loan application process.
