As a business owner, having access to funds is crucial for your firm’s growth and sustainability. But not paying enough attention to your loan application can cause unnecessary hassles and in some cases, even rejection.
In this article, we will explore some of the common mistakes that applicants make and simple ways to avoid them.
1. Not meeting the eligibility criteria:
One of the most important things to do before applying for our business loan is to check if you meet the eligibility criteria. We have specific criteria that we use to evaluate loan eligibility. These include your age, your business's age, annual turnover and credit score. Failing to meet these criteria can result in your loan application being rejected.
2. Not having your financial records in order:
Your financial records play a critical role in determining whether you are eligible for our business loan. Before applying, ensure that your business’s financial documents, such as balance sheet, profit and loss statement and tax returns, are up-to-date and accurate. Failing to do so can raise red flags, which in turn could lead to rejection of your application.
3. Having a low credit score:
Your credit score is one of the essential factors that we consider when deciding whether to approve a loan application. A credit score that is lower than 685 indicates higher risk. Before you apply, improve your credit score by paying off your current loans and credit cards in a timely manner.
4. Applying for too many loans simultaneously:
Applying for multiple loans at one time, especially from multiple lenders, indicates that you are in a desperate need for funds. This can raise possible concerns about the long-term financial health of your business. Additionally, if these applications get rejected, your credit score will take a hit, thus lowering your chances of approval even further.
Applying for a business loan requires careful planning and preparation. And avoiding these common mistakes can increase your chances of getting approval to get the funds you need.
