If you run or start your own business, you may need cash flow. Both large and small businesses use borrowed capital to help their companies run more smoothly. For new business owners, the process of obtaining a business loan can seem overwhelming. Then you need help! Lynn Wofford is the Brand Branch Manager for the Heritage Bank branch in downtown Olympia. She’s been in community banking for over 40 years, and her Mr. Wofford knows a thing or two about her business and how her loans work.
With the help of a banking industry expert, getting loan approval need not seem difficult. In fact, Wofford shares his 4 easy steps to get the business loan you need.
Step 1: Consider eligibility
You should consider your eligibility when taking out a business loan. Banks always look at historical data to determine if you are eligible for a loan.
Banks often prefer to:
your time in business. Traditional lenders often want to make sure they have been in business for at least two years. Some lenders offer him loans after a year, but this is less common.
your personal credit score. A person’s credit score plays an important role in their ability to obtain a business loan. This is especially true for new businesses that don’t have a lot of historical data to support loan requests.
Your credit score is important because before you can offer a loan, a lender needs to be confident that your payments are trustworthy based on your past payments. The higher your personal credit score, the more options you have for business loans.
your cash flow. Lenders need to know that the right amount is coming in to support loan payments. Your cash flow is a good indicator of your ability to support payments to lenders.
Traditional lenders often require collateral when providing business loans. You are more likely to get a business loan if you have a tangible item that can be offered as collateral, such as real estate or equipment.
Step 2: Determine the type of loan you need
There are so many different types of loans that it can become overwhelming. Lenders can help you find the type of loan that’s right for you, but it’s important to do your own research beforehand.
Heritage Bank offers a wide variety of loans to cover the needs of business people. These include commercial mortgages, term loans, lines of credit, equipment financing, and more.
A Heritage Business Express Loan is a classic example of a loan that is easy to obtain when starting a new business or business. Heritage Business Express loans are designed for small cash flow needs, but with loan options up to $750,000. A convenient, short-term application process helps businesses get the capital they need to succeed.
Step 3: Prepare Required Information and Documents
The best way to streamline the process of obtaining a loan is to be organized, keep good records, and have all the information and documents you need to guarantee your loan.
Some common things you will need when meeting with a lender include, but are not limited to:
- personal financial statement
- 2 or 3 year business and personal tax returns
- Interim financial statements including income statement and balance sheet for year-to-date picture
- Business and personal credit score
- legal contract
- License and registration
Step 4: Complete the application for review
Filling out a loan application can take some time. However, with the documentation listed in the last step, it’s pretty easy.
Once your application has been completed and submitted, expect to receive a decision from 24 hours to several weeks, depending on the type of loan you are applying for.
Thankfully, thanks to experienced and dedicated people like Wofford in the banking industry, applying for and receiving a business loan is almost stress-free. She will guide you through each of these steps and make sure you are doing your best to get the best possible chance of being approved.
Learn more about Heritage Bank’s different business loan types here. When you’re ready to apply, visit your local branch, book online, or call 800.455.6126.