We tapped the smarts of Maria Morris - a Regional Business Banking Representative (fancy term for “small business expert”) with Washington Mutual - to provide five recommendations for better success in getting a loan.
Recipe for small business loan success
- Review and clean up your personal credit report. Since many financial institutions review the business owner’s credit in addition to the business’ credit, it’s a good idea to make sure the information is accurate. Identity theft and unresolved errors can cause needless delays in your application process. Signing up for a credit score monitoring service or reviewing your credit report once a year may stop a problem from snowballing.
- Include all your assets. Many business owners don’t include all of their business and personal assets on a business application. Including all assets provides a clear picture to the lender. The stronger the balance sheet, the better the chance of getting approved.
- Be prepared. You’ll likely be asked to provide supporting financial documentation, especially for larger loans. Most financial institutions require at least two years of business and personal tax returns, along with an interim financial statement. Be proactive and gather these in advance or authorize a CPA to provide them to the financial institution. You’ll want to make sure that your tax returns include all schedules as well.
- Look for relationships. Establish a relationship with your bank. Many financial institutions provide relationship pricing based on the quality of long-standing relationships.
- Follow the retail lead. Enhance your personal banking relationship by doing your business banking at the same institution.
There’s your recipe for successfully streamlining your small business loan application process from your bank. Now the rest is up to you - so, get cookin’!