10 Things Banks And10 Things Banks And
Business Lenders Look ForBusiness Lenders Look For
When Approving BusinessWhen Appr...
www.businessmoneytoday.com
Small Business FinancingSmall Business Financing
TodayToday
• Banks and other small business le...
www.businessmoneytoday.com
10 Thinks That Traditional Lenders10 Thinks That Traditional Lenders
Look For In Business Lendi...
www.businessmoneytoday.com
1 - What Is Your True Need?1 - What Is Your True Need?
• Many small businesses only seekMany sm...
www.businessmoneytoday.com
2 - Amount Requested2 - Amount Requested
• A fine line between your request and whatA fine line...
www.businessmoneytoday.com
3 - Use Of Funds3 - Use Of Funds
• Banks and other private business lenders
will not just give ...
www.businessmoneytoday.com
4 – Other Debt4 – Other Debt
• How leveraged are you – both you and your
business?
• Are you ge...
www.businessmoneytoday.com
5 – Your Business Standing5 – Your Business Standing
• How is your business perceived in your
i...
www.businessmoneytoday.com
6 – Credit History6 – Credit History
• Do you pay all your obligation?Do you pay all your oblig...
www.businessmoneytoday.com
7 – Financial Statements7 – Financial Statements
• Two reasons financial statement matter in
th...
www.businessmoneytoday.com
8 – Source Of Equity8 – Source Of Equity
• No matter the loan type or the source –No matter the...
www.businessmoneytoday.com
9 – How You Get Paid9 – How You Get Paid
• If you have to show that you can repay aIf you have ...
www.businessmoneytoday.com
10 - Revenue10 - Revenue
• The most important item that yourThe most important item that your
b...
www.businessmoneytoday.com
Getting Your Business LoanGetting Your Business Loan
ApprovedApproved
• Banks and other small b...
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What Business Lenders Look For When Approving Business Loans

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Question: What do lenders look for when approving small business loans. Top 10 things.

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What Business Lenders Look For When Approving Business Loans

  1. 1. 10 Things Banks And10 Things Banks And Business Lenders Look ForBusiness Lenders Look For When Approving BusinessWhen Approving Business LoansLoans By Business Money TodayBy Business Money Today www.businessmoneytoday.comwww.businessmoneytoday.com
  2. 2. www.businessmoneytoday.com Small Business FinancingSmall Business Financing TodayToday • Banks and other small business lendersBanks and other small business lenders just want to get repaid.just want to get repaid. • Easy credit is gone in most instances.Easy credit is gone in most instances. • Start up businesses are out of the loop.Start up businesses are out of the loop.
  3. 3. www.businessmoneytoday.com 10 Thinks That Traditional Lenders10 Thinks That Traditional Lenders Look For In Business LendingLook For In Business Lending • Before the financial crisis, if your businessBefore the financial crisis, if your business wanted awanted a business loanbusiness loan, many lenders, many lenders modified their policies to accommodate.modified their policies to accommodate. • Not anymore – you have to modify yourNot anymore – you have to modify your business to meet their policies.business to meet their policies. • Top 10 items banks and other smallTop 10 items banks and other small business lenders look for --->->->->->business lenders look for --->->->->->
  4. 4. www.businessmoneytoday.com 1 - What Is Your True Need?1 - What Is Your True Need? • Many small businesses only seekMany small businesses only seek business financing when they have a cashbusiness financing when they have a cash flow problem.flow problem. • Lenders look for specific needs likeLenders look for specific needs like working capital, equipment, real estate,working capital, equipment, real estate, inventory – specific needs.inventory – specific needs. • Can’t get a business loan just to haveCan’t get a business loan just to have money – not any more.money – not any more.
  5. 5. www.businessmoneytoday.com 2 - Amount Requested2 - Amount Requested • A fine line between your request and whatA fine line between your request and what banks will lend.banks will lend. • Banks want to approve big loans – thoseBanks want to approve big loans – those over $100,000.over $100,000. • They will also only approve the amountThey will also only approve the amount that your business can afford and justify.that your business can afford and justify.
  6. 6. www.businessmoneytoday.com 3 - Use Of Funds3 - Use Of Funds • Banks and other private business lenders will not just give you money for money’s sake. • What you use those funds for matters - based on different loan products. • Easier for lenders to control the use of their money.
  7. 7. www.businessmoneytoday.com 4 – Other Debt4 – Other Debt • How leveraged are you – both you and your business? • Are you getting loan after loan but not growing your business? • Can you pay the new loan as well as all your other debt – personal and business?
  8. 8. www.businessmoneytoday.com 5 – Your Business Standing5 – Your Business Standing • How is your business perceived in your industry? • Are you current on all obligations – e.g. with your landlord, taxes, vendors – and even those items not reported on your credit reports? • Is your business thought of and ran as a professional business?
  9. 9. www.businessmoneytoday.com 6 – Credit History6 – Credit History • Do you pay all your obligation?Do you pay all your obligation? • Have you done so in the past?Have you done so in the past? • Can the lender be assured that you willCan the lender be assured that you will continue to do that – no matter what –continue to do that – no matter what – going forward?going forward?
  10. 10. www.businessmoneytoday.com 7 – Financial Statements7 – Financial Statements • Two reasons financial statement matter in the loan process. • To determine the financial wherewithal of the business. •To see if your business is being managed properly – i.e. full, complete and audited statements.
  11. 11. www.businessmoneytoday.com 8 – Source Of Equity8 – Source Of Equity • No matter the loan type or the source –No matter the loan type or the source – you have to provide some form of downyou have to provide some form of down payment.payment. • Either your own money or some equity inEither your own money or some equity in what is being purchased with the loan.what is being purchased with the loan. • Most require 20% down – it is already partMost require 20% down – it is already part of the underwriting – while commercial realof the underwriting – while commercial real estate may require more.estate may require more.
  12. 12. www.businessmoneytoday.com 9 – How You Get Paid9 – How You Get Paid • If you have to show that you can repay aIf you have to show that you can repay a loan, then you also have to show how youloan, then you also have to show how you get paid – how you earn that revenue.get paid – how you earn that revenue. • Some loans – asset based or revenueSome loans – asset based or revenue based – are solely based on how yourbased – are solely based on how your business get paid.business get paid. • Alternative Loan – even banks provideAlternative Loan – even banks provide alternative loans.alternative loans.
  13. 13. www.businessmoneytoday.com 10 - Revenue10 - Revenue • The most important item that yourThe most important item that your business can have is revenue!business can have is revenue! • Banks and lenders just want to get repaidBanks and lenders just want to get repaid and you can only do that with revenue.and you can only do that with revenue. • Not just any revenue – but enoughNot just any revenue – but enough revenue to cover your business expensesrevenue to cover your business expenses and the new loan.and the new loan.
  14. 14. www.businessmoneytoday.com Getting Your Business LoanGetting Your Business Loan ApprovedApproved • Banks and other small business lenders justBanks and other small business lenders just want to get repaid.want to get repaid. • Thus, if you want to know what they look for inThus, if you want to know what they look for in approvingapproving business loansbusiness loans – they look to get– they look to get repaid.repaid. • And, they don’t look for ways to make it work –And, they don’t look for ways to make it work – but ways that you won’t make it work.but ways that you won’t make it work. • Take those away and they have no choice but toTake those away and they have no choice but to approve your request.approve your request.

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