If your business has hit a financial low lately, acquiring a business loan is going to give it the much-needed acceleration. These loans can be taken from financial institutions traditionally or can be taken from private lenders. If you think that the overall process is a complex one, here are certain mistakes we have noted that can be easily avoided in the future.
No proper business plan
The business plan is still one of those top questions that any lender asks before processing the application. Besides this, they also can question you about the amount of money that you will need, how will you be using these funds, and when is it that you will repay the money. A business that is ideal and is running on the right tracks will be able to answer them correctly. The answer must also include pointers like operating costs, expenses, earnings and profit.
Past defaulter records
Past overdue of any business must not be overlooked as it affects the future loan approval processes. Any lender will scrutinise your past payment schedules and likewise calculate the associated risks with your business. To keep things moving on track, maintain a timely schedule of accounts receivables, credit card bills and invoices.
Borrowing more than your appetite
It is very much recommended to analyse your present business situation before applying for any loan. Understand the EMI that will be payable and how much of it can you pay or borrow to pay back.
Lower credit rating
The criteria for financial eligibility vary from lender to lender. But understanding your credit rating is one of such uniform criteria that every lender checks thoroughly. Any bad or rotten credit score can lead to the loan application getting rejected. If you have pretty larger credit ratings, you are even at times free to negotiate the interest rates too.
Ignoring fine print
This is the worst mistake made by most businesses. Once getting approved on the loan, do try to carefully read the documents. Do not place your signature on any legal document without clearly understanding the terms and statements. Try seeking professional helps to get a better understanding of the documentation.
You can go through every step quite meticulously before signing the loan papers from Accord Financial. If any queries arise, our team is always available to help you and get through the process with ease.