APPLYING FOR BUSINESS LOAN? 9 IMPORTANT THINGS TO REMEMBER

personal loans

Whenever you are applying for a personal loan, make sure that you are aware of things that should be a part of your online application. The application of the loan should consist of all the important things that a lender is looking for so that it makes availing the loan easy for you. Banks help in providing various types of loans- personal loans, business loans, etc. And in order to do that they need proof and correct documents from you, which will facilitate the process of getting a loan from the bank. The loan application should look realistic and simple. Also, before giving the application to them, make sure that loan application is complete. In case the bankers find any of your details missing, they will suspect that you are trying to hide something from them.

1. Cover Sheet – This will be the title of your application. All it says is “Loan application by XYZ, followed by your address”. Along with this, it should also include the date and also the contact number of the concerned authority.

2. Cover Letter – This is a letter that you will be addressed to the manager or the banker mentioning all the details about the loan. You will be requesting the manager and ask him/her to discuss the application with you and also provide you with right guidelines. In the letter, do mention about your business, what you deal in, few details about the product, amongst others. In the last paragraph, make sure that you talk about your future plans and what you intend to do with the money.

3. Contents Table – Having this table in your application book makes it easy for the banker to find things.

4. Loan Amount & Usage Details – In this segment, you will mention the amount that you need for loan purpose. Along with this, you will also give details on how you plan to use that amount. In case you are planning to buy something, you will have to mention the price of the same, installation charge, transportation charge, and other details to make it easy for the banker to understand.

5. Brief Description of Your Business – It would be safe on your part to state the facts and not to fool around with the banker in this section. Try to detail out as much information as you can about your business. Make the banker understand as to why you think your business will grow. Make sure that you do not leave any question unanswered. Submitting a business plan like this always helps. In this section, it would be a good move if you attach some relevant documents like that of the market analysis sheet, your statements, your balance sheet, details on the funds, the strategy that you intend to follow in order to grow your business. In the end, tell them about your future plans as well.

6. Talk About Your Team – At the end of the day, it is your team that will help in growing your business. Each and every employee of yours is important to the business. This list will not only include people who work in an office, it will also include people who work for you as your consultant or as your accountant. This segment will consist of either one or two pages. And this section will talk about each and every person along with their responsibilities. If possible, you can also give a one-line description of the person mentioning why you think the person is fit for the job.

7. Product/Service You Offer – Give a detailed description about your product, why you think the product will do well in the market, why you think people will buy/use it, and what set of customers you plan to target. After that, describe how you have been able to achieve success till now, talk about how you have been able to attract the right set of audience. In the end, do talk about your new products or services that you plan to introduce in future.

8. Personal Documents/Card Information – Bankers will require your personal credit documents for processing your loan application. The banker will also want to see your tax return and will also require your balance sheet which shows your net worth and how your business can grow. Besides this, make sure that you have obtained your credit card score from all the rating agencies. The credit card score should have all the required details and in case of any discrepancy of the same, your cash loan application will never be processed.

9. Collateral – List down all your available collaterals- list your stocks, your bonds, home equity, equipment, inventory details, receivables, amongst others. Collateral is required so that it reduces any risk in future. This assures the banker that you have a bank repayment source available in case you fail to pay back the loan. Along with the list, describe each and every collateral that you have mentioned. With this, provide the right documents and value of the respective collaterals.