Help Your Business Qualify for a Loan Before You Even Apply

July 9, 2019

Whether you’re expanding the reach of your services, upgrading equipment, or buying new vehicles, there are many reasons to secure a loan for your business. In this article, we will discuss ways that you can strengthen your chances for loan approval at terms that your business cash flow can handle.

Whether you’re expanding the reach of your services, upgrading equipment, or buying new vehicles, there are many reasons to secure a loan for your business. In this article, we will discuss ways that you can strengthen your chances for loan approval at terms that your business cash flow can handle.

Ask for Guidance From Your CPA or Accountant

Business owners must understand what cash they have coming in and going out when applying for a business loan, and the more knowledge you have, the better your chances of qualifying for favorable loan terms.

Building a long-term financial plan will help make you a secure loan candidate. Work with your CPA to build a portfolio of financial statements and projections for your business. Gather the same information for any business owners.  You can now work towards a manageable debt-to-income ratio, so you are as stable as your business.

Engage Your Banker as a Trusted Advisor

What does it take to make your business bankable? What is your bank looking for in a prime lending candidate? Build a relationship with your banker so you can ask questions like these to get a better understanding of the loan application process.

At Texas Gulf Bank, N.A., one of our experienced commercial loan officers will talk you through all of your loan options, review our competitive rates and payment plans with you, and help build a loan plan that’s right for your business.

Create a Loan Proposal That Puts Lenders at Ease

Lenders have detailed methods for evaluating existing companies to determine whether they are good candidates for commercial loans. A well-designed, well-written proposal shows lenders that your business is a solid investment likely to generate stable returns.

The best candidates for business loans will prepare an extensive Loan Proposal that explains how their business generates sufficient cash flow to cover loan payments, demonstrates a track record of meeting financial obligations, shows proof of financial reserves to withstand unexpected setbacks, and lists available collateral (business or personal assets).

It is also important to answer questions, like:

Why is your company a reliable candidate for a loan?
How much money is your company seeking?
How will your company use the loan?
How will your business repay the loan?
What are the terms you would like to receive (interest rate, length of term)?

It is also good to show how you will meet the payment schedule based on sales and cash flow projections. Click to read our tips for understanding the cash flow of your business!

Don’t Wait for Desperate Times to Secure a Loan

Business owners often turn to commercial loans in times of hardship but hesitate to seek funding when business is good. Consider applying for a loan when your market sector or industry is booming because lenders will be more confident about your potential success when your area of commerce is currently thriving. Plus, it makes your case for business expansion even stronger!

Each of our small business loans and commercial loans offer competitive rates of interest and payment schedules that are designed to meet the differing needs of our customers. We also provide the flexibility your business needs for short-term expenses like payroll, inventory purchases, or working capital.

All Loans Subject to Credit Approval.