How to get a bank business loan
There are times we need that extra push with regards to resource for business, we have plans to yield prospects which in turn would be helpful to our businesses. We want loans to help our SMEs but then how we go about it can be tedious. Banks generally offer loans with their lowest interest rates to SME’s (small and medium-sized enterprises). The rate of interest is usually between 5%-9% over a period of 1-5 years. Be sure you have strategized and have made a budget to the amount you would apply and have a repayment structure on ground too. The amount you’ll be able to apply for varies vastly depending on the size of your business. It is possible to obtain these loans as long as you have collaterals to support them. Having said that, some banks have realized that the majority of start-ups have solid ideas but nothing to back them on their loan requests. Take the time to do your research. If you know that you have the next best thing at your fingertips, don’t give up on it purely because you lack the capital.
Check with each bank you visit what the requirements are. Here’s a general list of what you’ll need in order to make an application:
- Full names and capacities of those signing for the loan
- CV of each member of the management team
- Your reasons for the finance request
- Your business’ financial statements, including an income statement, balance sheet and cash flow statements
- Personal statements of assets and liabilities of all partners, members or directors
- 12-month cash flow forecast or projections
- The amount of your own contribution and the source of those funds.
Be persistent with your applications, even if you get a few refusals. All banks are different and as long as you know your supporting documents are in order. You should also know most times the complexity of acquiring loans from bank could cause a little discouragement but never feel let down as a platform like Social Lender is here to offer your formal credits with little or no traditional collateral involved.
Using a unique algorithm that coins an alternative but flexible source of collateral that everyone seamlessly has, Social Lender offers loans leveraging your social reputation as collateral. Thus reducing the complexity and hassles attached to access to formal credit today.
So stay prepared once you get your desired formal credit, invest wisely and smartly and you would be happy at the end.