How Good Is Your Business Loan Application? Things You Must Include While Applying for a Business Loan
A good business loan application is a ticket to live your entrepreneurial dreams. To make it work, you must position yourself as creditworthy to the lenders. Portraying the right combination of figures, facts, achievable goals and realistic plans for your application is essential to convince the lenders that you are into a profit-making business.
We have put together some of the most important things that must be included in a business loan application.
# Cover Letter
Your cover letter must be precise and should explain in brief about your business plans. Give an introduction to what your company is about i.e. manufacturing, distributing, retailing, technology, etc. Mention the details of loan amount being requested and period of loan accurately.
Banks are into lending business and they need certain security to fund your business venture. You need to list out your financial assets such as savings, house equity, etc. to pledge to back up your business. The banks will go through your collateral very carefully, hence describe its costs and market value.
# Description of Your Business Plan
This is a vital part of your loan application as it will give a clear picture to the lenders whether you know well enough about your business. It must contain detailed information about your business and plan for execution. Explain the scope of your business and how you envision its future.
# Loan Amount and Its Usage
Be specific about how much money you want for your business and how you will use them. Include the cost of the equipment, labour charge, and duration of your project. Additionally, make sure to include your financial contribution to the business.
# Your Financial History
This part should include all your past loans, current debts, investments and credit card accounts. Chances of loan approval are high if your credit history is positive.
# Your Management Team
Don't forget to add your team of employees and their roles. It should also include outside consultants if there are any. Describe each person's role and responsibilities in detail.
This part documents what kind of product or service is offered by your company and who are the targeted customers. Give a brief about how are you going to take your business to the next level.
# Personal Financial Statement
The banks would want to see your personal net worth, tax returns, assets, and liabilities. For multiple business owners, documents of all of them would be necessary to be submitted.
Keep in mind the above-mentioned pointers while applying for a business loan for a successful approval.
If you feel, you have the business acumen and can manage an enterprise; a business loan can help live your dreams. CreditMantri helps you find the right lender matching your credit profile and creditworthiness. We pre-screen your application and better your chances of getting qualified for a business loan.
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