When you have an excellent business idea but don’t have the capital to get it off the ground yourself, chances are you’ll apply for a business loan. If you want your great idea to get off the ground quickly, you need a loan that will go through the application and approval process quickly. While many loan companies tout themselves as “same-day loans,” the fact is that the time it takes to receive a decision depends on how well-prepared you were for the loan application process. If you need fast funding, check out these tips and tricks for ensuring your application is complete on the first try.
Gather Collateral First
Unless you have a near-perfect personal credit history, chances are a finance provider will ask you if you have collateral to go with your business loan application. If you don’t already have an established business, you won’t have business collateral. In situations such as this, you may be tempted to use your personal home, personal vehicle, or another big-money item as collateral. Avoid doing this unless it’s something you can truly live without (such as a vacation home or a recreational vehicle). This way, if something goes awry with your business plan, you won’t find yourself without the means you need to survive.
Have a Strong Business Plan
While not all loan companies expect it, it never hurts to go into a loan application or interview with a strong business plan. Some lenders will want to know why you want funding and that you have a sound business idea. Your business plan should show that you’ve researched your market, have an advertising plan, and have a strong budget based on your first year of potential business. Depending on the lender you’re interested in, you may or may not need additional items in your plan. Ask the lender for specifics.
Have a Specific and Realistic Number in Mind
When a lending company states that it provides “up to” a specific amount of money, that doesn’t mean you should ask for a large number just because you can. In fact, you’re much more likely to be approved for a business loan if you ask for a realistic amount. Sit down and spend time on the numbers to determine what a realistic amount is. You don’t want to ask for more than you can afford to pay back. On the other hand, if you ask for too little, your business isn’t likely to thrive, meaning you could still find yourself not making enough to repay your loan. An account can help you determine how much you might need if you aren’t sure where to start.
Apply for a Business Credit Card
If you want to be approved for a loan quickly but don’t have collateral or a strong business plan, consider applying for a business credit card instead. A business credit card is also a good choice for potential entrepreneurs who don’t have an established business yet and don’t have a great personal credit score. Keep in mind that you won’t qualify for thousands upon thousands of dollars this way, but it should still be enough to get a legitimate small business off the ground. As a bonus, many business cards have rewards programs, too.
Gather Your Personal Finance Information
The reality is that if you want to take out a business loan but don’t have any business credit established, you’ll need to establish your personal creditworthiness with potential lenders. For this reason, it is important to gather your personal financial information before you begin the loan application process. A tentative list includes your social security number, assets and liabilities information, credit card accounts, and overall net worth.
Take Your Time When Filling Out the Application
Tiny mistakes like mixing up digits or misspelling a name in an address can cause your application to go on the back burner, so be sure to fill it out slowly and proofread it before submitting it. It can be tempting to rush through the application, especially where you’re providing a lot of basic information, but allowing yourself to get sloppy could add days or even weeks onto your loan approval wait. If you do realize you made a mistake, contact the lender as soon as possible to fix the problem.
The fact is there is no magic way to ensure your small business loan is approved quickly. Each lender has its own set of specifications, and it is important to compare them and understand them before you even begin the application process. Additionally, be sure you don’t fall into the trap of a “fast loan” that isn’t fast or affordable at all. Remember, if a deal seems too good to be true, it probably is. Look for licensed funding providers who have a strong reputation among current and former borrowers and who offer competitive interest rates on their loans.
