How to apply for a business loan
Starting your own business is no small task. But once you have your business plan in order, it’s time to start thinking about your finances. That’s where a business loan could help.
A business loan is a simple way to fund a new business venture. It can be used to set up the premises, pay staff wages or to buy new equipment.
It could enable you to cover the startup costs of your company without borrowing money from an investor who might want to own a portion of the business.
When putting your business plan together, you’ll need to work out your budget for startup and ongoing expenses. Use our business calculator to help you work out the additional costs of setting up and running your business. This includes, but is not limited to:
– Business name registration fees
– Legal services
– Accounting and bank fees
– Council fees
– Rent or mortgage payments
– Office furniture and equipment
– Strata fees
– Staff salaries
Here’s how to take out a business loan
1. Compare your options
Like any other financial commitment, you need to do your research first. Once you know how much you're looking for, you can start to compare business loans to find a product that suits your financial needs. Simply imput in the amount you'll need to borrow to get an idea of how different factors, such as the interest rate, will impact your repayments.
You’ll also want to consider what type of business loan will fit your situation.
2. Apply for the loan
Once you’ve chosen a product, you need to apply for the loan you want. To simplify the process, you can do this online by clicking ‘Go to site' from our comparison table, which will take you directly to the product application. You’ll be asked to provide as much information as possible, including:
· Proof of identification
· Proof of income (or expected income)
· Financial statements
· Cashflow projections
· Your business plan
· A lease agreement
Your lender will want as much information as you can provide in order to assess how much you can afford to repay and the risk of lending you money.
3. Application approval
Next, your lender will evaluate your application. They will verify your identity and consider your credit score before making any final decisions. To avoid delays, ensure you provide all your documentation when applying for the loan. This should help avoid the lender having to chase you up.
4. Draw down the loan
Once your application is approved, you’ll be able to withdraw up to the approved amount. Remember, you’ll only pay interest on the amount of money you borrow. You’ll also be required to start making regular repayments.
Applying for a business loan doesn’t need to be complicated. The trick is to do your research and to be prepared.
Let InfoChoice help find a business loan that works for you.