9 Things you must do to maximize your chances of obtaining a small business loan

To get approval for your small business loan application, you must be able to meet the lending criteria established by the bank.  Some organizations are subject to more adverse risk than others, and will therefore have more stringent criteria. To vastly increase your chances of a successful funding application, you will need to be prepared to present the following information:

1. The reason for the loan.  The lender will be looking for something that fits within the normal range and expertise of your business.  The amount may cover a number of items, but a clear method of explaining the reason is needed.

2. The amount required, and the repayment term of the small business loan you want.  (e.g. $10,000 term 5 years, payable quarterly).

3. Details of how you will repay the amount borrowed. For example:- This loan is for the expansion and marketing of XYZ Services. We offer are a wholesaler for XYZ products.

4. Details of any collateral you are able to offer to the lender.  This will act as reassurance for the lender. If you're not prepared to put up some aspect of security, then why should they?

5. You will need to include your business plan which will serve to answer essential questions relating to management capabilities, information about the market you operate in.  What kind of business you are in etc.

6. 3 Years financial statements.  You will need to present quality financial information from your accounting software, preferably signed off by your accountant or tax advisor.

7. Latest Set of Management accounts. Again produced from your accounting software.

8. Accounts receivables (debtors) and payables (creditors) reports.

9. Principals financial statements - Particularly required if some form of collateral is necessary.

If you are a new company, the emphasis is going to be on your business plan , and collateral you or your business can provide against the loan. Lenders are still checking personal credit, they want to know what kind of payment history you have that indicates the likely hood you will repay the loan.

You must be able to present your case to the bank. Practice on your colleagues and family (you never know, they might be so impressed, they'll invest or lend!).  It may help to role play with a friend and come up with as many pointed questions as possible.  Anyone who may take an interest wants to know you are well versed in your business and can handle the expectation of growth. Work your plan and be diligent. Small Businesses are more successful now than ever.

Good luck!