BLI

BLI 10 tips for starting your business
There’s more to starting a business than having a great idea.

10. Submit Your ApplicationOnce you choose a lender, familiarize yourself with its application process and make sure you...
23/02/2022

10. Submit Your Application
Once you choose a lender, familiarize yourself with its application process and make sure you compiled the correct documentation. Application and underwriting processes tend to vary by lender, so look into whether you can apply online or via telephone—or if you’ll need to visit a branch. After you submit your application, a lender representative may contact you to request additional documentation such as proof of collateral or further financial records.

9. Research and Compare LendersDepending on your personal and business qualifications, you may qualify for a startup loa...
23/02/2022

9. Research and Compare Lenders
Depending on your personal and business qualifications, you may qualify for a startup loan through multiple lenders. To identify the best startup business loans for your needs, consider these factors when comparing lenders:

Annual percentage rates. In general, business loan APRs start around 9%, but rates may be higher for startup business loans, and they can even be lower for the most qualified applicants. Visit each lender’s website or contact a customer support representative to determine available APRs.
Fees and other costs. Business lenders often charge origination fees ranging from 3% to 5% of the total loan amount to cover the costs of handling paperwork and verifying application information. Others also charge prepayment penalties for borrowers who pay off their loans early or late payment fees for those who miss their due date. These fees can increase the overall cost of borrowing, and some lenders eliminate them to remain competitive.
Lender reputation. Even if a lender looks good on paper, take time to read online reviews to evaluate its reputation among current and past borrowers. Likewise, reach out to other members of your business community to learn about others’ experiences with the financial institution. Consider choosing another lender if your research reveals any red flags, like negative customer support experiences.

8.Gather and Prepare Required DocumentsThe exact documents required to get a business loan vary by lender. However, ther...
23/02/2022

8.Gather and Prepare Required Documents
The exact documents required to get a business loan vary by lender. However, there are some documents that most lenders use to assess and verify an applicant’s identity and a business’ existence. For example, lenders often request tax returns going back at least two years, as well as financial records like bank statements, accounts receivable, credit card sales and outstanding invoices from the past four months—at a minimum.

As a startup founder, you can also improve your approval odds by drafting a comprehensive business plan. This can demonstrate to lenders that the business is financially stable enough to repay its debts based on future revenue and expense projections. Lenders also may request copies of business licenses and registrations applicable to your business or industry, as well as banking information for direct deposit.

7.Check Your Business and Personal Credit ScoresLenders evaluate an applicant’s credit score to gauge the amount of risk...
23/02/2022

7.Check Your Business and Personal Credit Scores
Lenders evaluate an applicant’s credit score to gauge the amount of risk they pose. Applicants with a higher credit score are more likely to make on-time payments and, therefore, have higher approval odds. Business credit scores are typically available after six months to one year of operations, so new businesses may not have one, especially if the startup is brand new.

That said, loans are often personally guaranteed—meaning the borrower legally agrees to repay the debt with their personal funds if the business fails to repay—so lenders also look at the applicant/business owner’s personal credit score.

Prepare for the application process and gauge your approval odds by requesting copies of your business credit reports and checking your personal credit score before applying for a loan.

6. Evaluate What Kind of Loan You NeedMany small business owners opt for financing through traditional banks and credit ...
23/02/2022

6. Evaluate What Kind of Loan You Need
Many small business owners opt for financing through traditional banks and credit unions. However, there are several types of business financing that can help startups get off the ground. Common types of startup business loans include:

5.If the formula for keeping your credit scores up is fairly simple, one of the challenges is that it can take several m...
21/02/2022

5.If the formula for keeping your credit scores up is fairly simple, one of the challenges is that it can take several months or longer to build up enough payment history to achieve a good credit score or to get your payment habits back on track to recover from a poor credit score. Another potential wrinkle in your plan to improve your credit score: Even if you have a perfect record of on-time payments, not every type of bill automatically shows up in your credit report. Depending on the credit reporting agency, the report may include only credit accounts like credit cards, retail store accounts, installment accounts and finance company accounts.

4.Ninety percent of top lenders use FICO® Scores. FICO assigns credit scores ranging from 300 to 850, ranking them accor...
21/02/2022

4.Ninety percent of top lenders use FICO® Scores. FICO assigns credit scores ranging from 300 to 850, ranking them according to the following scale:

Exceptional: 800 to 850
Very Good: 740 to 799
Good: 670 to 739
Fair: 580 to 669
Poor: 300 to 579

3.When you’re ready to apply for a loan or credit card, your credit scores will impact whether you’re approved and what ...
21/02/2022

3.When you’re ready to apply for a loan or credit card, your credit scores will impact whether you’re approved and what interest rate you’ll pay if you are. A high credit score not only increases your chances of obtaining credit with favorable terms, it may also make a landlord more willing to rent you an apartment or an insurance company more likely to offer you a premium discount.

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