There are multiple reasons why a business owner may need to take out a business loan. Whether it’s for general business needs, growth and expansion, or loan consolidation, here are some things to keep in mind during the application and repayment process:
The Application Process
- Before applying for a loan, you should know exactly what you’ll use the funding for and when you will need the financing by. Being able to articulate a plan is important as well as applying early.
- It’s important to keep accurate financial records for both yourself and your business; otherwise, the bank will be relying on inaccurate information, which could lead to the loan not being approved.
- Apply early, before there’s an immediate need for the funding. Business loans may take longer than a typical consumer loan or credit card application. The process can take two weeks to one month, or even longer depending on the type of loan.
- Ever wonder what lenders are looking for? Among the most important: a history of business profitability; how long you’ve been in business; how well you’ve retained profits; consistency paying suppliers and collecting from customers. If you’re a startup business with no history, it’s especially important to establish a strong relationship with your lender to ensure they can help in the right way.
The Repayment Process
- Loans are granted based on the business’s capacity to repay. The process usually entails monthly payments, and you can talk with your lender to establish fixed or variable payments.
- You will want to establish a repayment budget to ensure that loan payments will fit into your overall business strategy.
- If you run into problems with making payments, it’s important to communicate that with your lender. Often they’ll be able to work with you to set up a new repayment schedule.
Whether you run a longstanding business or a startup, a big corporation or small shop, it’s important to establish a history with your lender. At Associated Bank, we value the relationships we have with customers and place a premium on customers with good relationships.
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