The companies that are most likely to be approved for small business loans are usually the most prepared for the application process. In addition to compiling the necessary documentation, they know how much capital to ask for, how they will use it, and how much debt they can afford to take on without impacting cash flow. But this isn’t the only type of preparation you must do before filing an application. In fact, there is a chance that you won’t be approved even if you do everything your business lender tells you to do.
This is because unless you go beyond the conventional steps of preparation, what you think you know about your business and business lender could very well be grossly incorrect. Here are 4 easy mistakes to make when applying for a small business loan:
1. Too much dependence on software/technology
Technology has made it much easier for small businesses to stay organized, especially when it comes to finances. There are countless tools available for tracking and managing revenue, profits, debt, expenses etc. This is information you need to know before applying for small business funding, and it must be 100% accurate if you don’t want to put your company in danger or have your application rejected. But no piece of technology is completely perfect, making every software tool vulnerable to glitches or misreporting data.
This is why applicants for small business loans are strongly advised to examine all of their numbers themselves and have an accountant take a second look to confirm it is correct. You cannot just trust that your software-generated materials will always give you the right calculations. Some online business lenders like Kabbage or PayPal use automated systems but companies like United Capital Source have living, breathing human beings approving and distributing funding, and would therefore prefer business owners who devote the same care to their own information.
2. No Experience In Formal Requests
Planning your formal request for funding feels a lot different than actually speaking to a business lender. You don’t know what kind of questions you might be asked or which types of business funding will be presented to you. First-time clients of United Capital Source are often caught-off guard by our genuine interest in your business. We strive to maintain long-term relationships with our clients and therefore want to know exactly how their businesses operate, what their goals are for the next few years, etc. Our business funding experts have years of experience dealing with dozens of industries, so we can tell when an applicant’s projections or financial records might seem unrealistic.
A great way to be prepared for your conversation with a business lender is to have a financial professional, ideally a friend of yours, test your knowledge of your business’s financial situation. This might prompt you to rethink your approach or obtain information you previously didn’t think was necessary. Applying for small business loans always makes you a better business owner because the research phase of your preparation gives you a firmer understanding of what your company needs to do to stay healthy.
3. Thinking You Shouldn’t Even Bother
The main reason it’s so easy to make a mistake when applying for small business loans is the abundance of inaccurate information about business funding circulating the web. Most relevant articles will tell you that credit score, your ability to provide collateral, and the size of your business will determine how much funding you can borrow as well as your terms. We have a message for you: Stop reading these articles!!!
At United Capital Source, we do not discriminate based on either of the aforementioned factors. We even offer specially-crafted bad credit business loans for borrowers with poor or little credit history. As for collateral, we know that younger or smaller businesses do not own property or expensive equipment, which is why most of our clients take out unsecured business loans that don’t come with the stress of knowing your car or house is on the line. Smaller businesses might have a harder time meeting regular expenses than larger competitors but we can customize working capital loans, credit card processing loans, and restaurant business loans to ensure that your terms will not make it more difficult to pay your bills or employees.
But The Most Misleading Rumor Of Them All…
Another thing you’ve probably heard about alternative business financing is that our programs are astronomically expensive. This is merely an attempt to downplay the rewards of working with a company like United Capital Source, which are far more valuable than a little more cash to play around with. Traditional business lenders offering cheaper small business loans have stringent, non-negotiable terms, require perfect credit scores, and make you wait months to receive funding. You won’t have to worry about any of these annoyances with UCS.
Any applicant may be eligible for multiple business funding programs (working capital loan, merchant cash advance, accounts receivable factoring, etc) and amounts much larger than those offered by PayPal or Kabbage. But perhaps our greatest advantage over our competitors is unbeatable customer service. You will never have to wait to hear from us, and we will walk you through every step of your investment and payment process.