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Unlike your typical personal loan, business loans generally involve more risk for the lender, resulting in stricter eligibility and longer applications. You’ll typically need to gather some key financial details to complete your loan application, and the application process can often take weeks.
The good news is that business owners today have many more options when it comes to finding funding than they did years ago.
Here are common business loan requirements you’ll find when applying for a business loan:
There will also be a range of basic requirements that both you and your business will need to meet to be eligible for a loan:
Larger financial institutions, such as banks, will generally require you to make an appointment to complete an application in person. However, newer online lenders automate the process with the convenience of completely online application.
You’ll typically need to provide the following information as part of your application:
After applying, you may talk with a representative by phone to go over your application. To confirm the information you’ve provided in your initial application, you’re often required to upload further documentation of your business’s financial details that could include:
The stronger your application, the more likely you are to get approved, so make sure you’ve prepared all the necessary documents before you apply.”
Typically, the very best rates on unsecured loans will be reserved for businesses and directors with excellent credit, while specialist lenders serving other sectors of the market are likely to look more at how profitable your business is.
Regardless of what type of business finance you apply for and which lender you apply to, it will need to be comfortably affordable given your business’s income and outgoings.
As standard, you’ll need to provide proof of ID (passport, driving licence etc) and proof of address (utility bill, bank statement etc.) as well as your company registration number (CRN) if it’s a limited company, the registered address and details of company directors and finances.
You may additionally need to provide a business plan, bank statements, cash flow forecasts, management accounts and historic accounts.
Some larger financial institutions, like banks, may require you to make an appointment to go through an application in person. Newer online lenders automate much of the process, with the convenience of a completely online application. Business loans do typically require a little more underwriting than personal loans, and at the very least, you’ll normally need to speak to the lender over the phone.
Depending on the size of your business and desired loan, you may qualify for more than one type of financing from a variety of lenders. Keep in mind that traditional banks often have stricter requirements and application processes. You could find that online lenders offer business loans with comparable interest rates and fees are a better option for your financing needs.
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