1. Identify Your Credit Score
If you’re applying for a loan with a conventional lender, your credit score is one of the main factors that will be considered. So, before you contact any lender, analyze your numbers. Appeal for a personal credit report. Try to find out the faults such as a payment you made on time but were reported as late. If you find a fault, contact the credit bureau and company involved to resolve the issue.
If you have a high credit score (above 700) you stand the best chance of getting qualified for a loan with an attractive interest rate. In today’s market, for commercial loans under $100,000, you can expect to pay an average rate of 6.89% interest, and if your score is low (below 500), you may find it difficult — but not necessarily impossible — to get approved for a loan.
2. Figure out your options
Lenders vary from the conventional (banks and credit unions) to the non-traditional. One of the former options in QuickCapitalUSA Services lays an economic platform that offers loans to small and medium sized businesses. Despite the fact that the interest rate you’ll get through QuickCapitalUSA services will likely be considerably optimal when compared with other lenders and banks, you’ll also find the approval process to be much faster than a bank. In addition, you’ll start repaying the loan in small increments according to the repayment schedules reducing the risk of missing a bigger monthly payment that might be granted in the next term. Another alternative is a merchant cash advance, which is based on prospective credit card sales. While you can expect higher interest rates and fees with this option, there are several perks to consider. It’s easier to get approved for a merchant cash advance, even if you have a poor credit rating. Once approved, you’ll receive funds quickly, and the repayment plan is based on your revenue.
3. Know what you need
If you’re not sure how much cash your company needs to operate or expand, meet a professional consultant before approaching any lenders. Be prepared to provide documentation to back up your request and to answer lenders’ questions about your finances, business model, and potential plans. Also be ready to discuss exactly how the loan will be used. For instance, you might show how the cash will be used to purchase materials, to start up a new franchisee, to expand a business line or to pay additional staff.
4. Be aware of the process
Even if you don’t get the first loan you apply for, that is due to lack of proper documentation or inability to meet few eligibility criteria imposed by lender to gain from your past failures. Let’s say you were turned down due to poor credit. You could take time to improve your credit score and then seek a loan at a later date.