Great Applications of Short Term Funding
Loans (Photo credit: zingbot)
As a business owner, you’ve probably heard about short term funding. Term loans are very common, and aside from the short term, you can also find commercial banks offering intermediate and long term funding. During the application process, you need to create great applications so that your proposal can receive funding.
Qualifying for the Short Term Funding
Before your business receives short term funding, it is important that you qualify first. Great applications consist of comprehensive documentation that is presented to the bank, mutual bank, credit union, or any other lender type.
Your application should include all the essential information about your business. In most cases, lenders will ask for the following:
- Payment history for previous loans, and this may also include the cash flow history and accounts payables (history on suppliers)
- Income statement
- Properly filled application form, if the lender provided a form
Depending on your qualifications, you may be given an unsecured loan or a secured loan that requires collateral.
A great application to short term funding is necessary to obtain lower rates. If you can convince the lender that your business is not too risky, you can get a favorable interest rate. The calculation of the rate of interest will vary among lenders. It would be an advantage if you know the prime interest rate in your region. That way, you can negotiate for a better rate.
Funding for Start-Up
It is easier to obtain funding for an existing business. However, in the case of start-ups, it can be a bit complicated. If you are working on your application for short term funding, you have to make sure that everything is prepared. Extensive documentation is usually required even for short term funding because you have to prove to the lender that your new business is less risky.
In most cases, the application must be submitted together with projected financial statements (e.g. cash flow, income, etc.). Once you are face to face with the lender, you have to explain where all revenues come from and how you’re going to pay your financial obligations. Usually, the short term funding for a start-up business will require collateral.
You have to pay attention to the contents of a great application for short term funding. Otherwise, you will not be able to close the deal and get the needed funding. If you don’t know much about loan applications, you can always use the available templates online. However, you have to make sure that your application is in the professional format. It is important that you deal with lenders on a professional level to get their trust and confidence.
As you can see, making a great application for short term funding is not as hard as you think. As long as you know the documentations to present, and you meet up with the lenders on a professional level, your business has a chance to receive funding. Make it a point to prepare everything you need in advance, and it is also vital that you know the contents of the application. That way, you can present the application with confidence.
Author Bio:
John Lewis is marketing lead at Noblefunding.com.au. Noble Financial Group is a medium between lenders and borrowers. Noble Financial Group helps over thousands of Australians each year with our short term finance.
Share this:
Category: Loans
