Not having up to date financials
This is one of the most common mistakes that small business owners make. Every bank, and the majority of alternative lenders, require your up-to-date financial information to evaluate whether your business is stable enough before lending money to it. If you want to expand your already established small business, financial institutions will want to know if you are able to repay the loan while sustaining your business in the future. All of your financial information must be clear and concise.
Lenders value transparency. Filing the most recent years tax returns is important to getting the best pricing on your business financing.
No Clarity on Use of Funds
Any lending organization would have a keen eye on how any loan applicant intends to use the funds so as to boost the production of their business. Unfortunately, the most common thing is that small business owners do not have a clear well-described idea on how they are going to spend the money they are requesting. This leads to loan denials by most lenders since a lender wants to lend you money so that you can increase the revenues of the business and be able to repay back the loan with interest.
Not Knowing Your Credit Ratings
Focus on your business credit score. Use your employer identification number to look up your score with Dun & Bradstreet, Experian, and Equifax. Take steps to improve your standing by reducing debt, paying bills on time, and having suppliers and vendors report positive history
Applying for the Wrong Type of Loan
There are so many different types of loans for SMBs — it’s easy to get mixed up. But when you’re applying for a loan, it’s crucial that you submit an application for the right kind of loan.
Before applying for a loan, you should consider not only the amount of capital you need but also what type of small business loan works best for your needs. There are many different types of loans that cater to different business needs. When evaluating what loan is right for your business, you should match your financial needs with every different type of loan. In the majority of the cases, small business loan applications get rejected by lenders because the requested loan didn’t match the application. For instance, if you are looking to finance a vehicle, you shouldn’t apply for a short-term loan. At Unicus Capital our talented advisers can guide you through the process of securing funding. Get a free quote on a business loan at 1(855)-568-4372