As a business owner, you need to be able to manage day-to-day operations effectively and ensure steady cash flow to run your company successfully. Access to working capital can help weather short-term revenue fluctuations and fuel business growth.
Forty-two percent of business owners plan on receiving debt financing, either through a loan or line of credit.1 Whether introducing a recently developed product or service, investing in new market segments, or pursuing an acquisition,1 you’ll need regular access to capital.
Following these four steps will help your loan application process run smoothly and secure financing quickly.
Develop strong lending relationships.
As owner, you’re the face of your company and directly responsible for making sure loans are repaid, so the trust you build with your banker is foundational. The more your lender understands about you and your business, the better your chances are of being approved for financing. Let your banker know about your potential funding needs before you need a loan. Your Truist relationship manager can help you prepare for the application process.
Update your financial statements.
Even if your business has a strong performance record, poorly documented or irregular financial statements can send red flags to lenders. Come prepared with income statements, balance sheets, cash flow reports, and your personal financial records that support your business plan. Review them with your banker to make sure they meet your lender’s standards.
Draft a written plan.
Roughly half of small businesses positioned for expansion use a written plan to meet their annual goals.1 Committing your business plan to paper helps articulate your mission, financial strengths, long-term plans, and how capital will stimulate your company’s growth. Be sure to include sales predictions and expense forecasts that prove you’ll have enough cash flow to make loan payments on time.
Want help writing your plan? There are many organizations that offer assistance to business owners like you. SCORE—a national network of volunteer, expert financial mentors—connects you with experienced counselors who can review your written plan and show you ways to make it stronger. Depending on your company’s ownership, you may be able to access additional resources like the Minority Business Development Agency, Women’s Business Centers, and Veterans Business Outreach Center for further advice and guidance.
Ask for help when necessary.
Finding capital on the best terms for your business can be serious work. Most loans require a great deal of documentation, which may take some time to collect. If you need it, don’t be afraid to ask for help assembling the right paperwork for your application.
Asking your banker for assistance with your loan request will help streamline the application process and allow you to focus your attention on running your company. Together you’ll build a strong relationship and improve your chances of success.