Thousands of directors, owners and new entrepreneurs apply for instant business loans every month here in the UK.
For one reason or another though, many don't get the funds they need to take their businesses to the next level.
Whether you're thinking of applying for a loan now, in the near future or are just curious as to how you would get approved if the time ever arose, we've written out a guide below on how to get approved for a business loan - instant or not.
Listed below are four of the key things to bear in mind when it comes to business loans.
1. Know your business inside out
When taking out a business loan, you're effectively asking someone to invest in your business for a set period of time.
The application process won't involve anything near as stressful as standing up in front of Deborah Meaden and friends on Dragons Den, but you do need to know your business inside out if you expect someone to agree to invest and put the money into your account.
Of course, any business owner worth their salt will know most aspects of their business like the back of their hand, but as many hire accountants to do the books, the financial side of the business can often be the bit most business owners are most in the dark about.
Before applying for any type of financial injection, be sure you at least know the basics about your business; many instant business loans are applied for online, but you may still receive a phone call to clarify information.
2. Keep up-to-date finance records
As a small business owner, it's a given that you're busy all the time.
That however isn't an acceptable answer to give when a lender asks you for your latest financial records.
If there's one thing you need to ensure you stay on top of, it's your finances, not just in the eyes of the tax office, but also when it comes to dealing with potential lenders.
Make sure you stay well on top of your financial statements and the application process will be a breeze.
Set yourself some strict days each month to update your records to ensure there's no rush during the application process to find old information.
3. Improve your credit score
This one's pretty key.
A solid credit score is one of the biggest factors finance brokers (or at least, their automation software) looks at when deciding if you should be leant money.
A great credit score will improve not just your chances of receiving the yes you desire, but also of getting better rates and terms with many companies.
To improve your credit score:
- Purchase credit cards, use them and pay it off immediately
- Fix errors on your credit report
- Pay all of your bills going forward on time (even if you've been slack on them in the past)
- Reduce your current loan and credit card debt
4. Be open and honest about your history
"Honesty is the best policy" might be a bit of a cliche, but when it comes to applications for business loans, it's definitely true.
If your potential lender finds big inaccuracies in your application - whether you can rectify them or not - they will cast a huge shadow over your application in general.
Even if you've got a few things on your application you don't think will help, it's better to be honest about them than to cover them over and get found out further down the line; odds are you will.
There's also a big chance that something that you think won't look good will actually be standard to most applications and ticked off as fine by your potential lender.
Applying for instant business finance can be as simple or stressful as you make it.
Your best chance of being accepted is to know your business back-to-front and be honest in your application.
Umming and arring over the finer details and having to go back on cover ups will significantly reduce your chances of securing the finance your business needs.
Ready to apply for finance today? Click here to apply for an instant business loan today (our applications don't affect your credit score!)