The five things you need to look for when choosing a business loan

Introduction

In this day and age, many businesses will sometimes need some extra money to help them in a variety of different ways. Maybe it’s to pay extra seasonal staff, to buy office furniture, to help with cash flow, for stock, machinery, or inventory supplies, or even to get their dream business started. This is when applying for a business loan can be an appropriate step to take. But what does this mean for you? Today’s blog post explores the top five things you need to look for when choosing a business loan.

Body

First of all, if you want a business loan, it’s important to get savvy financial advice. Have a chat with your financial advisor and accountant to see if your business can actually afford it. Then, to make sure that you get the deal that suits your business best, see an experienced mortgage broker for help in choosing the specific loan (and thereby lender) you would like to apply for.

Secondly, have all your documents ready! You don’t want a loan application rejection on your record because you forgot to include all the right paperwork. If you need help applying for a loan, get in touch with a mortgage broker to support you through the process.

Third on the list – you need to be prepared to put in the research. Make sure the lender – if you’re not going with one of the big banks – is qualified and not fraudulent. In addition to this, look into the different loan types available to be certain you are applying for a loan that suits your business. Once again, this is where a mortgage broker comes in handy.

Fourthly, you need to have a great credit score. While it is still possible to get a loan with a bad credit rating, it is a lot harder – and the more denied applications you have in your history, the harder it will get. Make sure you have paid all your bills, taxes, and invoices, and are not owing anything to the Australian Taxation Office. Don’t forget – the bank will check these details!

Last but not least, you must understand your own financial state of affairs. Understand where your business is currently at financially, how much profit you are making, how you can grow, and how much you can really afford to borrow. Don’t borrow more than you can pay back! This is where a detailed business plan, which covers your company’s finances as well as its goals and future plans, can help support your loan application. A lender needs to understand why you are applying for this loan in order to assess if you’ll be able to pay it back.

Key points

• Get support – talk to your local finance broker.
• Prepare the documents – make sure you have absolutely everything you need.
• Do your research – shop around to get the best loan for your business.
• Money, money, money – on the whole, you need to have a great credit score if you want a successful loan application.
• Don’t test your limits – know your financial situation, and don’t apply for a loan if you won’t be able to pay it back.

Conclusion

Ultimately, while applying for a business loan is a process that requires careful detail and a strong financial base, a successful application can take your business to the next level. Just make sure you are in a financial position to do so, have all the right paperwork, and get the assistance you need from financial experts.

If you or someone you know needs help or support when it comes to their business goals, please contact the friendly team at AA Finance Solutions for advice.