If you have a Business and are planning to expand or want to start a new business, you’ll need capital. Every business requires funding either to start or to grow. Some look into their savings, while others turn to investors. A commercial Loan comes to your aid. Many business owners turn to commercial loans for financing. However, getting capital for a new small business is not easy. A commercial loan can help your business grow, finance new research and development, boost sales and marketing efforts, and allow you to hire new employees. Applying for a commercial loan and approval of it is time-consuming. Doing everything right will help you get a commercial loan as soon as possible.
Below are steps to improve your chances of qualifying for a commercial loan.
1. Ask Yourself These Questions
Before you apply for a business loan, ask yourself why you need one in the first place. Do you want to expand your business? Do you need additional cash flow? Do you want to pay off debts? When you understand the reason why do you need a business loan, you’ll be able to determine how much of a loan amount you’ll need. This will help a lender know your loan amount requirement.
Are you prepared to take on a commercial mortgage loan? A loan provides funding, but it becomes a debt when you’re unable to pay back the loan. The best chance of qualifying for a loan is when your business is performing well.
Before applying for a commercial loan, you should compare commercial loans from multiple lenders, and consider what each lender has to offer.
Look for terms and conditions that best fit your business needs. Read reviews from other borrowers about each lender.
2. Business and Personal Information
Ensure your business plan explains how you’ll utilize a loan. You should also be prepared to provide important information like when was your business established, your company last year’s profit, and how many clients you have. You may be required to submit documents like a personal statement with a detailed background information, personal credit report, previous legal names, criminal record, previous addresses, and many more.
Keep all important documents ready that include business licenses, certifications, and permits. Gather all the documents that prove your ownership.
3. Financial Documents
If you’re applying for a commercial mortgage, most lenders require financial documents that include balance sheets, bank statements, accounts receivables, tax returns, profit and loss statements. Your personal credit score should be good. If your personal credit score is not good, then you may not qualify for a commercial loan.
Your debts can affect your loan term. Maintain a document that outlines all outstanding credit amounts, debts, and monthly payment.
4. Application Process
Take the application writing seriously. Be honest about writing any information on the application like debts, past businesses, or any other information. Avoid making mistakes while filling the application and don’t give the lender any reason to doubt you. You don’t want your loan application to get rejected. Take help from your colleague or business partner to complete the application, so that you don’t miss out anything.
5. Wait for Loan Approval
Traditional lenders will take two to six weeks to analyze your application and go through the underwriting process. Some lenders can inform you about your qualifying status within 24 hours. The waiting period depends on the commercial lending institution and it may vary from one commercial lending institution to another. Application strength also plays a big role in quick loan approval process. If your loan application gets rejected, ask for a feedback, and work on to strengthen the eligibility requirement.
If you’re looking for a commercial loan in MA, Drew Mortgage Associates, Inc. can help! Drew Mortgage Associates, Inc. is a Boston mortgage lender that provides commercial loans at a low-interest rate. Our home loan officers are highly trained professionals that can help you identify the best mortgage program that’s right for you and will guide you throughout your mortgage loan process. So what are you waiting for? Call Drew Mortgage Associates, Inc. today!
The post Step-By-Step Guide to Applying For a Commercial Loan appeared first on Drew Mortgage Associates.