In part one of this two-part blog series, we went over some basic tips on how to successfully apply for a small business loan. There are a few important facets to this conversation, from strong documentation to credit history and more, and ensuring you have your ducks in a row will increase your chances at a successful application that’s accepted.
At Diversified Members Credit Union, we’re here to help with numerous business loan needs in Detroit and other areas, including for small businesses who need these funds for vital operational purposes. What are some other top themes we recommend when it comes to your loan application and this entire process?
Know Which Type of Small Business Loan You Need
One simple way to streamline your small business loan application is to do your research in advance regarding the type of loan that best suits your business’s needs. If you aren’t sure about the process, we’re more than happy to sit down with you and explain it in detail.
For instance, the process of applying for an SBA loan is much lengthier and more detailed than applying for a line of credit. If you spend days or weeks on the former process when all your business actually needs is a line of credit, you’ll be wasting valuable time — and possibly money. This is why it pays to know your loan type in advance.
Show Your Cash Flow
For existing businesses applying for small business loans, ability to show sufficient cash flow is a key aspect — and this goes for new businesses as well. Once you have the cash flow down pat, we can then begin to discuss loan rates, terms and other aspects of your loan agreement.
Not only does showing cash flow demonstrate your business’s ability to be successful in the future (and thus, able to repay the small business loan), it also shows that funds will be put to good use — say, by obtaining inventory or completing repairs and renovations.
For more on how to successfully apply for a small business loan for any of the needs your business may have, or to learn about any of our other credit union services, including various loan types in Detroit, speak to the staff at Diversified Members Credit Union today.