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5 Tips To Improve Your Chances Of Getting A Loan As A Small Business

Getting a loan as a small business can be quite challenging and requires a lot of hard work. You can’t wake up one morning and realize that your business needs funding and expect that you will procure a loan within a day or two. 

There are steps required to be taken by small business owners to enhance their chances of getting a loan. It is essential to self-examine whether an investor will be interested in loaning you based on the information on your application.  Here are 5 tips to help you improve your chances of getting a loan as a small business.

Business plan

A business plan is the summary of what a business is all about, and serves as a key point of reference to investors. A business plan, if well developed, sets you on the right path for access to funding that is required for your business operations and growth. It will also determine the future success of your business. 

Espact can help you with a professionally written business plan that will position your business well before the right set of clients and potential investors which will in turn bring about exponential business growth.

Talk to our experts on Whatsapp +2348081553042 or info@espact.com 

Research

There are varieties of loan available for small businesses, all you have to do is research to find the one that best suits your business. Know more  about the differences between some of the core small business loan types: long-term, short-term, working capital, and government-backed loans, and also get the basic informations needed.

Improve your credit score

A credit score is a projection of your credit conduct. It shows how likely you are to pay a loan back on time, based on information from your credit information. A good credit score builds trust with your potential investor. Some factors that determine your credit score are, the length of credit history, payment history, prompt payment of bill and expenses, and business size.

Proper documentation

Keeping proper documentation and having it ready makes business loan approval very speedy. It gives your lender the impression that you are well prepared to build your business. Some of the documents needed for application of loan are Sole Proprietorship Declaration, Certified True Copy of Memorandum and Articles of Association, identity and address proof, bank statement, proof of continuation, etc.

Application

Getting a feedback from a loan company takes quite a lot of time. The time between application and approval differs depending on the loan amount, loan type, and lender. Application forms for some conventional providers such as banks and credit unions are long and require extensive supporting paperwork. Give yourself enough time to apply, as the application timeline ranges from one to six months. Application forms for some conventional providers such as banks and credit unions are long and require extensive supporting paperwork.

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