We use cookies to improve your experience on this site. By viewing our pages, you give us consent to use cookies. Find out more.

Alternative Finance blog


Tips for loan application success

Tips for loan application success

3 months ago


At businessagent.com we help 100s of small businesses find and apply for loans from P2P platforms or other alternative providers every month. This means we have a very good understanding of what is required if you want your application to run smoothly, be processed quickly and be successful. For businesses and entrepreneurs considering applying for a loan here’s a list of what you need:

 

Unsecured Loans

Lenders want to review the affordability of a loan. Therefore they are looking for evidence that shows that the business can make repayments even if things don’t go exactly to plan. Healthy profit margins and good money management are important and they will want to be aware of existing business loans or regular monthly payments and how these have been managed.

It is worth noting that generally lenders won’t loan more than a month’s turnover without additional security. So if you are seeking more than a month’s turnover applying for a secured loan would be a better option for you.

What you need:

  • Proof of turnover, revenue and profitability. That means have bank statements and unabbreviated accounts to hand and ready to send. You will need bank statements going back at least 12 months.
  • Trading history: the length of time that your business has been trading and details of the business including the sector that it is in.
  • Payment history: if you have any outstanding finance, late payments of CCJs make sure that you have the details available. It is always better to be upfront with loan providers about issues and explain the reasons behind them rather than fail to mention them – the loan provider will find out.
  • Director(s) information: the names, address and history of directors going back a minimum of 3 years. Include copies of ID – passport for instance.
  • The loan amount required: it sounds obvious but it does get missed so make sure you are clear about the amount that you need.
  • Details of how the funding will be used: This should include what it is used for and a breakdown of costs.
  • Requested repayment period: what period would you like to repay the loan over? Note that the loan provider may recommend a different period for repayment depending on the circumstances of your business.

 

Secured loans

Affordability remains the key element of loan success; lenders want to see that even if things don’t go to plan repayments can be met.  But when seeking larger loans (relative to turnover) lenders look for security against assets held by the business or by an individual(s) within the business. Which means that if applying for a secured loan you need to have the full details of those assets; inclusive of value and any existing debt that uses the assets as security.

 

 What you need:

  • Proof of turnover, revenue and profitability. That means have bank statements and unabbreviated accounts to hand and ready to send. You will need bank statements going back at least 12 months.
  • Trading history: the length of time that your business has been trading and details of the business including the sector that it is in.
  • Payment history: if you have any outstanding finance, late payments of CCJs make sure that you have the details available. It is always better to be upfront with loan providers about issues and explain the reasons behind them rather than fail to mention them – the loan provider will find out.
  • Director(s) information: the names, address and history of directors going back a minimum of 3 years. Include copies of ID – passport for instance.
  • The loan amount required: it sounds obvious but it does get missed so make sure you are clear about the amount that you need.
  • Details of how the funding will be used: This should include what it is used for and a breakdown of costs.

Requested repayment period: what period would you like to repay the loan over? Note that the loan provider may recommend a different period for repayment depending on the circumstances of your business.

Tagged: alternative finance business loan unsecured secured small businesses sme entrepreneurs




  • Internet Business Awards Category Award Winner 2015
  • Hertfordshire Business Awards Finalist 2014

As seen in:

  • The Guardian
  • Financial Times
  • Yahoo! Finance
  • The Times
  • The Daily Telegraph