10 Factors to Consider In Business Loans Application Process

How to Prepare Your Loan Application with the Banks

10 Factors to Consider In Business Loans Application Process

In today economy, getting a small business loan can be so important in growing your new business. However, below are key factors to consider in business loans application.

However, a lack of equity usually limits the debt financing available to most startup businesses in Africa and across the globe.

Lenders will generally require some equity cushion or security (collateral) before they can lend to small businesses.

Additionally, debt financing requires the ability to service the debt through current interest payments.

This also makes these funds unavailable to grow the business.

Although venture capital provides businesses a financial cushion, these equity providers have the last call against the company’s assets.

In view of the usual lack of a current pay requirement, they require a higher rate of return than lenders receive.

 

How Piggyvest Can Help!

Recommending PiggyBank as a Nigerian small saving platform is aimed to foster sustainable economic development within our communities.

This initiative will help you invest in sound business ventures though a saving plan that encourage startup individuals, business owners and organizations to finance their interesting projects. The platform can also let you get by with little upfront cash or business loans.

Nevertheless, Piggyvest will evaluate all investment applications proved to be a “win” for the entrepreneurs. Depending on your industry or location, the following is taken into account when you apply for a business loan in most banks or financial institutions:

 

10 Factors to Consider In Business Loans Application Process

  • Market potential and future economic viability of the business;
  • Local job creation opportunity;
  • Experience related to the venture;
  • Reasonable personal financial investment;
  • Ability to repay collected loans;
  • Adequate security for the business;
  • Creation of a business plan; and
  • The location of the business (within the Target Customer Area)
  • Good organizational structure;
  • Business financial statements and tax returns (if applicable)

 

How to Start Your Loans Application Process

  • First, contact our office for initial discussions concerning your application.
  • Develop a business plan, including financial projections (how the money will be used).
  • Complete the required loan application form and submit with the business plan to our office for analysis.
  • The business plan may be relatively simple or very complex depending upon the nature of the business.
  • You may be asked to supply additional information, depending upon your business projections.
  • Once your application has been received by our finance committee, you will be notified on the status of your Micro-Loan application within five business days.

 

The Art of Getting the Money

This starts by knowing what the lenders want.

A better way is to simply ask a friend, your business advisor or our professionals who can help you.

 

Related: 5 Tips on How to Prepare your Loan Repayment Plan

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