Steve Curvey Shares His Views About Business Loans

By: Steve Curvey


Many persons who aspire to open their own trade or to grow their existing one require an support of financial capital at the beginning of a trade; as we all know, the essential source of venture capital for business persons is trade lending.

There are few accepted errors we make while applying for a trade loan or during the processing of the loan which can result in a rejected loan application. I will try to present a few of them which will help you know what you want to make certain that your next trade loan application will not be neglected or why yourprevious loan application was sidelined.

Absence of planning

Before applying for a trade loan you need to do some homework and derive methodologies about how you are going to request your lender and how you can make certain that your loan application won't be sidelined.

Do some homework -- Foremost of all you will have to decide the kind of credits you need then do a good study on the loan trade and find out which lenders are best suited for you. Make a list of them in the order of interest in the trade in which you are in. It will be helpful for you to conclude who is most interested in your trade and is wanting to help you achieve. After you find the correct banker or bank, make it sure that the banker accepts your trade and what you are aiming for.

Documentation Once the plans are accomplished the next step involved is gathering or arranging the required papers. This step also should be done with a cool headed approach so that you can make sure all the vital documents are ready.
Keep this in thought that all declarations in the application will need to have supporting documents so make sure together them all.
The following are some of the documents which you will find vital.

Creditreport -- A customer credit article is a authentic diary of an individual's credit payment history. Its main purpose is to help a lender shortly and squarely decide whether to accept you loan. If your record shows a blunder, get in touch with the credit reporting firm and appeal a correction. An account letter should be included with your loan application if your credit record shows legitimate late payments or bankruptcies, this can lower the contradictory impact of these black marks on you during the processing of your loan application.

A professional looking business proposal

Other than standard loan papers, a baker expects to see a written proposition when somebody applies for a trade credit. This is your chance to make known the most exciting and promising aspectsof your trade and to establish to your banker that you are a prime candidate for a loan. The proposition must include a explanation of your trade, the quantity of funds requested it should also include why you are searching for the funds and the quantity that you will donate. The proposition should tell how you are going to give back the money.
This is what is supposed to serve as a foundation for your loan application.

Tax returns and other financial papers.
It is required to be presented with your tax papers and other financial papers from the preceding two years - for both yourself and your trade so make sure you all of them ready before going ahead.

Application Form Errors. The next step in the process is making the application. It should me made sure that zero mistakes are there in this vital step. Some of the common mistakes are.

Imperfect, False Statements, Incomplete Financial Disclosure, Unsigned and Undated Application, Unreadable Writing, Handwritten loan papers and Lack of evidence for the statements in the application.

Interview Errors

Once your application is ready the next step will be the meeting with the loan officer of the bank. Once the meeting begins be prepared for these queries to be shot at you. These queries are common in most of the loan interviews.

1. Why do you require the money?
2. How much do you need?
3. How do you plan to repay it?

So prepare yourself to answer them correctly and in a way that will make the bank or the loan officer in the end say "Yes, your loan is granted".

You must be in readiness to elucidate to the loan officer about what are your methods to make the most out of the funds granted, it is also advised to carry all those papers which will clarify to the bank why it is not risky to grant your application. Try to convince the lender about how perpetual your business is and your proficiency to repay the loan.
Fine now let's number the common mistakes committed during the interview.

1. Obviously, not being ready enough to answer the above mentioned queries.
2. Not maintaining a healthy debt-to-equity ratio -- debt-to-equity ratio refers to the amount of cash you are seeking compared to the amount you have invested, if you are not in readinessto put in a large part of the money in your project it can make your project seem unbelieving.
3. Not being ready for the disagreement that the lender may raise-Answer all interrogations honestly and with sufficient documentation to support whatever statement you have made. do not have enough data about a issues raised by the banker immediately update him or her that you will submit them the required information soon as it is available to you and the banker back as soon as you are convinced that you can submit the required information.
4. Showing a low certainty level -- Get dressed professionally for the interview, make the lender feel like you are an business person who can and will pay back the loan if allowed. You may increase the portrait of your trade by giving extra points about your trade, this can be realised in the mode of essentials like handouts, writeups, press releases, testimonials, awards get etc.
5. Not discussing the risk contained in your trade -- All trade has a certain aggregate of danger involved, and if you do'nt consult it with the officer there is a great chance for him or her to think that you have not thought about the dangers involved with your trade. However it is advisable that you channelise more on the positive sides than the uncertain ones while speaking to the banker. Update the lender about the gambles constituted and explain why chances to meet with the dangers are minimal.

Other arguments for rejection

Improper money Utilisation

Financiers are all the time impressed with trade owners that manage their money very nicely. So if you are somebody with these qualities it is difficult to get your loan accepted:

- many bounced checks
- Small amount of bank balance
- Frequent overdrafts
- Delayed credit card repayments
- Have failure of repayment on previous loans
- Sued for non-payment or late payment by suppliers

Not asking for acknowledgement from the lender who did not allow your form previously

Whenever you meet with rejections of a loan form, ask the lender or investor to provide you with some acknowledgement or the explanations why he or she rejected it. This can help you in fixing those errors before you go to another lender.

So, next time you plan to apply for a trade loan make sure you device all the points in the operation properly and that you are not committing any of these errors. If you do so then your application will be processed out any problems and the acceptance without any delays or objections.


Steve Curvey is a business expert that specializes in business development through funding. You can read his newest book about getting a business loan here www.businessplanforbusinessloan.com/