For business owners in need of some additional financing for any part of their company’s operations, a business loan is one of the most common and reliable options. Available from a few different lender types, from banks and credit unions to certain private lenders, business loans assist with a wide variety of different company needs.
At Diversified Members Credit Union, we’re happy to help with business and commercial loans among our many loan products, which also include mortgages, auto loans, and many others. We’re here to assist clients with every step of the loan application process, ensuring you position yourself for the best interest rates. This two-part blog series will go over some important tips for applying for a business loan to ensure you cover all the relevant details.
Ensure Documents are Updated and Accurate
The first step to applying for a business loan is gathering the necessary paperwork, including your most recent tax return and financial statements. The other thing you will need is updated personal details, such as bank account numbers, home ownership information, and any contract agreements (such as real estate or equipment leasing).
To give yourself the best possible chance at success with your application, make sure that the information provided is accurate and up-to-date. This means gathering your paperwork sooner rather than later so that it’s still relevant and in your possession for when you apply. If you find you’re missing any of the details listed above, talk to your tax preparer or a financial advisor about the best strategy for getting it all organized before sending in your application.
Check and Maintain Your Credit
Part of what makes a business loan possible is your business’ credit score, so it’s important to keep yours in good shape. This means consistently paying back loans and bills on time and following through with any financial commitments you make, such as regular payments for services or contracts.
It also means staying up-to-date on any credit score monitoring reports you have, such as your free credit report that’s provided by the three major credit reporting agencies. By checking in regularly to review this information, you can determine if any action is needed; if so, it can be taken before a potential lender sees it and makes an inaccurate judgment about how responsible you are with money.
If your credit is lower than you’d like it to be, or particularly if it’s below a threshold a lender has advised you would be ideal for a certain loan type you’re applying for, there are several steps you can take to improve it. Many of these involve the areas we already went over above; however, a financial assistant or even one of our credit union specialists will be happy to help you devise specific strategies for improving credit score.
For more on how to properly apply for a business loan, or to learn about any of our credit union services, speak to the staff at Diversified Members Credit Union today.