There are steps you can do to improve your chances of getting a loan to assist your small company get through a hard period or grow.
Follow our advice to make the procedure go more smoothly.
*A guide to UK small company subsidies and how to apply for them
*EBITDA stands for Earnings Before Interest and Taxes
*Access to company loans up to £10 million under the Recovery Loan Scheme.
*What costs may I deduct as a self-employed person?
*Support for small companies and self-employed people infected with the Coronavirus
What is the typical procedure for applying for a loan?
In basic terms, a loan application generally consists of four steps:
*You fill out an application.
*A credit check is performed by the lender.
*The lender makes the final decision on whether or not to provide you a loan.
*If your application is approved, you will have the option to accept or reject the loan.
Six pointers for obtaining a small business loan
1. Before you apply, gather all required information
It’s a good idea to gather the information you’ll need for your application before you start so you don’t have to rummage through boxes or scan through files to discover what you’re looking for halfway through a form.
Most small company loan applications will need the following information:
*what you’re asking for and why you’re asking for it
*your business strategy
*bank statements for your company
*information about your revenues and losses
*your financial statement
*your personal information
If you’re looking for a loan because of the coronavirus epidemic, check out our page on the Recovery Loan Scheme for additional information on the lending requirements you’ll need to fulfill.
2. Establish or maintain a positive credit history
Banks like to see evidence that you’ve borrowed money in the past and paid it back on time. That is why having a credit card or borrowing modest sums of money might be beneficial. Keep in mind, though, that missing payments might lower your credit score.
Getting your name and address on the electoral roll allows lenders to examine your name and address history. Before they send you any money, they require this information to make sure you are who you claim you are.
To stay on top of any changes to your credit rating and strategies to enhance your score, you may utilize a credit score provider like Experian or ClearScore.
3. Pay great attention to your application’s details
The tiniest error or omission on your application might be the difference between your loan application being accepted or rejected. So, before you click’submit,’ make sure you read everything again to double-check the information.
4. Do not use numerous programs at the same time
Use a calculator first to see what kind of loan amount and interest rate you may be able to acquire. Otherwise, it can seem to potential lenders that you’re scouring the internet in an attempt to obtain a loan approved.
Experian, Funding Circle, and Start Up Loans are among options. A calculator may be available on the website of your business banking provider.
5. See whether you’re qualified for any grants
The government has established a variety of financial assistance programs for small company owners, which may be beneficial to many. However, determining which ones you’re qualified for isn’t always straightforward. With this in mind, we’ve been hard at work developing a tool to assist you in checking.
All you have to do is answer a few questions to find out what coronavirus assistance the government may provide you and your company to help you weather the storm.