What should I avoid when applying for a business loan?
Applicants make many mistakes when applying for a business loan, from choosing the wrong loan option to submitting an incomplete application.
Regarding the type of loan, it’s always a good idea to think realistically about what would best suit the company in terms of finance volume, flexibility & repayments.
When it comes to presenting the documents, you should always understand what you’ll need to give to the lender before beginning your application. Omitting or forgetting to submit vital information or documents may lead to delayed or rejected applications altogether.
Why was my application rejected?
There are many reasons why a lender may reject a business loan application. It is essential to ask for feedback from your lender if they leave your application. This feedback will give you an idea of what you did wrong, which you can improve for the next time you apply. If the lender cannot provide this feedback, you may want to evaluate your application & see if you can spot any red flags yourself.
Is my personal credit file checked or my company credit file?
The lender will define which credit history they will need to verify, but usually, the lender will want to check the company directors’ credit records. Your business’s financials may also be reviewed using accounting information you provide as part of the application process.