This post is part of a series dedicated to the ins and out of the financing process. This is the second post. Click here to see the first part of the process.
Part two – The Application
Last week, we covered the first part of the financing process – the Plan. So we can now assume that you’ve got a solid footing as to the type of equipment you need for your business and why. You’ve selected a financing partner you’re excited to work with and you’re ready to sit down and tackle the application. Easy, right? Maybe. Before you dive into the application with pen in hand, there are few things to remember:
Be accurate. The lender is going to want to learn a number of things from your application – most likely the length of time that you’ve been in business, your overall revenue, an average bank balance, and your credit score. It’s important to give the lender only and exactly what they ask for. If the lender wants to see bank statements from the last three months, don’t send bank statements for the entire last year, even if it might paint your business in a better light. This will only give the lender more paperwork to sift through and could confuse the process.
Be complete. This should be pretty obvious – if you submit your application, but withhold important information that could affect your eligibility as an applicant, this is going to raise some big red flags and the lender is likely going to have some big questions. If they ask for bank statements for John Doe’s Tasty Bakery, but you give them bank statements for your other operation, John Doe’s Bread Shop because both businesses will be using the new equipment, but you didn’t tell them about your second business in the first place, then you are going to slow down the process.
Be prompt. Remember, if you told your lender you need that financing tomorrow, they are likely trying to move mountains around the office so that you can get your money in time. If they send you the application, and you sit on it for four days before you send it back, you are slowing down the process for yourself. Be prepared to spend the time to sit down and fill out the application and to get the necessary paperwork in order and get the application back in a timely fashion.
Stay tuned for our next blog post in this series on the next step of the financing process – the financial documents.