A business loan application is a stressful process. The key to making this seamless is preparation. So, here are some questions that lenders typically ask.
Who are you?
This is quite an obvious matter, but you need to ensure that you’re able to tell them who you are as well as your experience. Lenders want to validate your identity so you might have to provide your license or government-issued ID. This is needed when closing your loan. Check with your lender if they’re accepting other proof of identity if you don’t have any government-issued ID.
What is your business?
Lenders need to know more about your business. So, prepare an introduction that would convince them that your business is worth their money. Providing a comprehensive resume may be a good idea since this can give them information about your management background and business experience.
Who are your clients?
Lenders want information on who you’re doing business with, what kind of clients you have, if they are paying on time, and many more. You may prepare a list of your clients that includes relevant information such as their industry type, website, number of employees, etc. Show your lender that your business’ customer base is strong.
How are your finances?
The heart of your application is for your lender to confirm that you can afford the business loan that you’re applying for. They need assurance that they will be able to recover their money. Different lenders may ask for different documents. However, typically, they request bank statements for the past two years, balance sheet, income statement, and tax returns.
Did you have any issue with your previous loan?
Your answer to this question can make or break your application. The best reference for this is your business credit score. This will give them an idea of how you manage your previous business’ debt.
Do you have any other loan?
Lenders want to know any other payments you’re making. To answer this question, prepare your business debt schedule, rent or real estate schedule, landlord subordination form, and updated accounts payable statements.
