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Applying for a Business Loan

Before applying for a business loan, you need to have a cohesive business plan ready which covers your company’s history and an outline of its long term goals and objectives. Banks also need to know your company’s plans for future expansion, as well as an exit strategy that describes how the loan will be paid for should the business for some reason lose its profitability and hence be forced to close.

In addition to this, your company’s credit history and record of trading will also be evaluated in order to determine the size of the loan that can be offered. In the case of new businesses, the applicant’s own personal credit history will be considered as the applicant’s property will be put up as security for the loan. This involves a full credit check to determine the level of risk for the lender. The property’s value is assessed by the lender so it may lengthen the amount of time normally required to process a loan application.

Business Link or the Citizens Advice Bureau in your area can provide you with useful, unbiased advice regarding taking out a business loan. If you need further assistance, you can also consider membership in your local Chamber of Commerce.