The loan application process can be quite overwhelming, especially if you’re applying for a commercial loan with a bank. Their stringent rules and regulations make the process more time consuming and complex.
What lenders are trying to gauge by the documents and forms they have you fill is your ability to pay back the loan on time. Filling out a loan application is about proving these factors to the lender and convince them.
Here are some tips that should help improve your loan application:
Include a cover sheet
While this isn’t a necessary part of your loan application, it does add value to your application. A cover sheet includes the name of the person submitting the application and the business name and contact information. This makes it easier for agents to identify your loan application.
Also include a cover letter. The purpose of a cover letter is to request the agent to consider your loan application. It’s a more personal approach, rather than just submitting a form. Don’t forget to mention what type of business is being run, whether it’s a partnership, sole-proprietorship, or limited company. Once the introduction is done, summarize a few of the reasons why your business requires the funds.
About your business
With so many businesses in the industry, private lending agents won’t know about every single company on the market. Make sure you put in some details of the company, like how long it’s been in business, the products and services offered, and how much the business has grown over time. Be more detailed with this part of the loan application than in the cover letter.
Include a business plan that describes where the funds will be used
A lender needs to understand the business they are lending funds too and the use of those funds as well. This allows them to assess how profitable the project can be and if providing the funds would be a lucrative move for them.
Provide a detailed account of how the funds will be used for your project. Include quotes to back up the amount of money required for the project planned. Also include the potential cash flows expected once the project is complete. This helps convince lenders that you will be able to pay back the loan and interest payments.
Global Capital Partners Fund is a major private lending company that provides a variety of lending options to businesses in Norfolk, VA. From bridge financing to hard money loans, the company has helped many businesses over their 3 decades in the industry. Get in touch with their senior partners for more information about their commercial lending options.