Review the Status of Your Company and Your Personal Credit Scores
One of the first things that any providers of small business loans in Fresno, CA will do is obtain copies of your personal and business credit reports. Before reading any of the details, they will look at the credit score. A higher score means a better chance of being approved and receiving an offer with better terms and conditions.
Several other factors are taken into account. The debt to credit ratio as well as the debt to income ratio will receive a lot of attention. Your payment history is one of the more important factors, along with the types of credit (loans, credit cards, etc) that are currently active. Even recent credit inquiries, especially hard pulls, will affect your score.
If you find errors on your credit reports, report them immediately. Once the corrections are reflected on the reports, start applying for your loan.
Make Sure All Your Legal and Financial Documents are In Order
Lenders offering small business loans in Fresno, CA will want to review a number of documents related to your personal and/or company finances. While the range of documents may vary slightly from one lender to the next, there’s a good chance that you will need the following: (1) Income tax returns, personal and company; (2) your company’s income statement and the current balance sheet; (3) company Articles of Incorporation along with all current business licenses; (4) bank statements, personal and company; (5) proof of identification, like a driver’s license or state-issued picture ID; and (6) your resume and a reasonable projection of the company’s finances over the life of the loan you are seeking.
Choose Your Potential Lenders Carefully
Some lenders only work with business owners who have strong histories in the same or a related industry. They may also require that your business meet certain standards for monthly revenue generation or collection. While some are open to providing financing to a start-up business, others may require that the company be in operation for at least three to five years.
Take an Objective Look at Your Business Plan
You can bet that all reputable small business loans in Fresno, CA will want to review your business plan. While that plan should present your company in the best possible light, it must also be realistic.
Within the body of that plan, you will want to include documentation and data that supports each element. Include a detailed company description that includes the goods or services that you offer. Details about the management team, including their experience, also matters. An overview of the industry associated with your company and why your enterprise fits right in is also helpful.
Establish realistic expectations in terms of the product or service delivery process, sales and marketing goals and strategies, and what is known as a SWOT analysis. The latter is simply an honest look at the company’s strengths, weaknesses, opportunities, and threats as you recognize them today.
The Issue of Security
While there is such a thing as an unsecured small business loan, the more likely scenario is that you will need to pledge some sort of collateral. What do you have that would serve as an acceptable asset? Many lenders will readily accept real estate, production equipment, or even a finished goods inventory as security for the loan. The collateral minimizes risk to the lender, since it can be seized and sold to settle all or part of the loan if you should default for any reason.
Always find out everything you can about a lender before submitting an application. Review the loan terms and conditions carefully before agreeing to any loan offer. Doing so will ensure the loan does help you grow the business and does not create complications down the road.