In this video, Pursuit Vice President Paola Garcia reviews six steps every business owner should take when preparing for a loan application. Learn more about what you can do now to increase your chances of approval.
Step 1: Take time to prepare for the loan application
- Ensure your bookkeeping program is in order
- Make sure you’re up-to-date with your business and personal tax filings
- Check your personal credit report, and immediately report any errors
- Update the executive summary on your business plan
Step 2: Know your industry and competition
- Develop talking points on your business’s competition as well as your operations and business cycle
- You’ll instill confidence in your lender by demonstrating that you’re forward-thinking and prepared
Step 3: Tell a story with your financials
- Walk your lender through your business’s financials, and use the information on your tax returns to tell a story about your business.
Step 4: Get ready for your loan interview
- Treat an interview with a lender like a job interview
- Demonstrate your organizational skills and thorough knowledge of your business
- Be ready to address any critical or crisis periods that your business experienced, and discuss what happened and what you did to overcome it.
Step 5: Determine how much you need and why you’ll need it
- It’s a major red flag for lenders if you just say, “how much can you give me?”
- Do the work to show how you got the the amount you need, and tell them how you will use the loan
Step 6: Complete and review the loan application
- Submitting an incomplete or inaccurate application shows a lender that you’re disorganized
- Go through the application multiple times, and ask a trusted colleague to also review it