Helping small companies navigate the loan process
New Jersey entrepreneurs know that it's tough being a small business. Most of them are run by one or two people and raising funds can be cumbersome. It takes a lot of money to not only start a business but keep it afloat during the first few years. Many small companies resort to applying for a loan from a bank - but getting approved for one is may be harder than they think.
With the current state of the economy, banks may be hesitant to lend money to small companies. Although lending is starting to slowly increase, getting approved for a loan is still not an easy task. However, business owners are often to blame for loan denials and keeping a few things in mind when applying may make the process easier.
Many business owners come to the bank unprepared. They know nothing about their credit history and they have no formal written business plan. Business owners should contact credit reporting agencies such and ask to see their business file. This will help them prepare for the loan process and help them see where they can improve their credit.
Another thing small companies need to do is research. Many apply at multiple banks, hoping to get approved. However, each time a business owner applies for a loan, that inquiry goes onto the credit report, which often has negative effects. Instead, it is better to research each bank and its requirements. Not all banks are the same; some make it easier to get a loan than others and thorough research main lead New Jersey to those banks.
Source: Daily Herald, " How small businesses can avoid loan rejection," Jeff Stibel, June 9, 2013