Before making an application for a commercial loan, brokers advise that you read up on what is involved in the process and take note of some of the things you can do to facilitate your application and improve your chances of success.
A commercial loan is a loan made to a business organisation rather than to someone in their personal capacity. The term is also used to describe loans granted to medium to large organisations.
When you are thinking of applying for a commercial loan, brokers give the following advice to follow before making your application.
Get Your Financial Documents In Order
Before granting a commercial loan, business lenders and brokers will need proof of your financial history to date or proof of your creditworthiness if you are starting a new business. The type of documents you should have ready include:
- Six months of bank statements from your business bank account
- Financial statements and management reports
- Asset and liability listing
- Income tax statements and any other tax-related documentation
- Credit report on the business and all partners in the business
Have A Business Plan
Whether you are starting a new business or looking to expand your existing operation, you should have a business plan in place. The type of information to include in your business plan includes:
- The nature of your business
- A description of the types of products or services your offer or intend to offer
- The environment in which your business will be operating
- Your skills and areas of expertise
- Your plan of action going forward
Know What Your Purpose Is For Obtaining A Commercial Loan
Be sure to know what your intentions are for the use of the loaned capital. Some common reasons why companies apply for loans include:
- To expand your facilities to accommodate more staff or equipment for increased output. This could involve renovating your existing property, moving to a larger property or even purchasing your business site.
- To purchase new equipment for manufacturing or increasing production.
- To acquire working capital to spend on things like salaries, stock and creditors.
- Launch new products or services or reach higher targets as your business expands.
Having this vital information on hand when making an application can speed up the process as commercial loan brokers will immediately be in a position to make decisions on your application.
Contact ZEP Finance today for more information and advice on dealing with commercial loan brokers. We have a large panel of business lenders and brokers for all your short-term finance needs at our fingertips.