You obviously need capital to start your dream venture. You may decide to apply for a business loan in order to acquire the necessary financials. However, you may be unaware of a few pre-requisites. These documents are important to assure the lenders that you are able to pay back the money that you owe after your business takes off. With this in mind, we have enumerated a few loan requirements for you to take note of:
1. The Business Plan
Lenders need to know what your business is all about. What products or services are you going to offer? How many people are going to manage it? How do you intend to grow? Where are you planning to open up? These important questions should be answered within your business plan. This way, not only would lenders know of your good intentions towards the amount that they’re going to provide, but they’d also have a fair idea of the amount that they should lend you.
2. Disclosure of other Debts
Much like when you’re applying for a credit card, lenders need to know whether or not you have other unpaid debts. This isn’t much about your business goals, but more of your ability to pay them back later on. If you have other unpaid debts even before you’ve applied for a business loan, chances are, lenders would have second thoughts in approving your claim. Not being diligent in paying past debts is a sign that you are unfit to pursue further financial responsibilities.
3. Collateral
As with all loans, there are times when the borrower would not be able to pay up on time. In such case, the lending institution may require collateral, something that they may get in return for the unpaid borrowed amount. Signing a loan contract puts you in a commitment to pay back what you owe, and not being able to do so would hurt the lenders much more than you, hence, the policy of acquiring collateral for the loaned amount. Take note that collaterals may come in different forms, may it be your car, your indoor belongings, or even your house.
4. Bank Statements
One of the main things that lenders are looking out for is your financial responsibility. Of course, the main reason why you’re applying for a business loan is because you do not have the right amount for your capital. However, loaning institutions would still require this in order to evaluate how healthy your business’ cash flow is. Are you the type who saves and spends responsibly, or are you the type of person who withdraws cash from his account and jeopardizes the business’ financial health? Your financial habits and reputation would precede you, overall.
5. Business Licenses and Permits
This is one way to show the lenders that you’re really serious about your dream venture. It doesn’t matter if you’re opening up a spa or a net café, as long as the local government knows about it and is cleared to operate within your chosen location, then it’s a solid proof for the loaning institution that your business would exist once they approve your loan.
When you’re ready to give it another try, get a jumpstart on your business venture with a trusted name that offers only the best service possible. Our network of more than 2,200 Cebuana Lhuillier branches and online presence give customers unlimited access and utter convenience in applying for a loan. Our five-point application to disbursement process ensures services are delivered on time. So what are you waiting for? Visit your nearest Cebuana Lhuillier branch now – we assure a fast, easy and secure transaction.
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