Grow Your Business

Four Ways to Improve Your Chances of Getting a Loan

Four Ways to Improve Your Chances of Getting a Loan
 

There are a number of obstacles that small business owners might face when applying for or receiving a loan. Some variables you can’t control, such as the availability of credit or the current state of the economy. There are four simple steps, however, that can help improve your chances of getting a loan.

1. Before you need money, build positive relationships with potential lenders

Relationships play a big part in financing decisions. You are ultimately the one who has to deliver on the promise to pay and execute the plan, so the more your lender understands and trusts you and your business, the better your chances of success. If possible, try to build a positive track record with one lender.

2. Produce a clearly written plan for your capital

Putting your plan to paper will help you clearly articulate your business’s background, exactly how you will use the capital, and how the capital can help your business grow. Be sure to also include forecasts of sales and expenses to demonstrate that you will have enough cash flow to easily make loan payments on time. An experienced Service Corps of Retired Executives (SCORE) counselor can help you test your business case, sharpen your growth forecast and clearly articulate your growth plan.

3. Make sure your personal and business financials are complete and up-to-date

Even if your business is strong, poorly documented financial statements can cause a lender to lose confidence. If you don’t have a financial background, work with your accountant or small business advisor to understand and prepare both balance sheets and cash flow statements that support your plan.

4. Don’t be afraid to ask for help with your documentation

If you are serious about getting capital on the best terms, it is smart to get the help you need to pull together the right paperwork, rather than leave your documentation to chance. Most loans require a great deal of paperwork, which can be time consuming to complete and hard to assemble. Work with a banker who will assist you with the documentation of your loan and better streamline the process for you.

Ready to get started?

Whether you’re just getting underway with your plan or ready to apply for a loan, take advantage of the different ways SunTrust can help you grow your business. Talk with a banker about your options today.

About SunTrust Business Owner Research: SunTrust surveys small business owners and advisors as part of its ongoing business seminars and symposiums. The small business owners attending these events include both SunTrust client and non-client business owners and are representative of the broad spectrum of businesses located in the SunTrust markets. The research cited in this report is extracted from these 5,425 small business owner surveys collected between 2007 and 2011.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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