Have you ever applied for a business loan and been turned down? Or maybe you were offered a loan, but at a higher rate than expected?
There are many reasons why the loan approval and underwriting process can be different for every business.
However, according to Henry Gonzalez, president of Beach Bank’s Tampa Bay Market, there are a few easy ways to make sure your business gets the best loan possible.
Collateral and loan repayment capacity are key, but bankers also want loan demand to match the specific capital strengths of the business.
In other words, Gonzalez suggests, “Don’t fund equipment that could be obsolete in two years for 20 years. A good community banker will help you structure the loan so that the term of the loan and the purpose of the loan match.
Additionally, a bank will ask for your personal and business income tax returns for the past two years, as well as any IRS schedules. “They’ll also want to take a look at the person standing behind the business,” Gonzalez said.
The bank will also likely want to see a current income statement, a list of accounts receivable and payable, and their due dates. If your business is a distributor of products, your banker will also want to verify the age of your inventory.
Banks like to see accounts with stable and average balances. A constant turnover of cash, even in large quantities, does not carry the same weight when underwriters review a loan application. “There’s a huge difference between having $ 3 million in your accounts and having an average balance of $ 3 million,” Gonzalez says.
When you have your finances in order and are ready to apply for a loan, Beach Bank can be a resource. It offers commercial and industrial loans that can be used for real estate and owner-occupied properties. According to Gonzalez, “Banks love to do this. ”
Other options include lines of credit to provide working capital and loans for the purchase of equipment and the acquisition of another business. SBA loans are a good option for new businesses that don’t have a lot of collateral to offer, but the trade-off is higher fees.
From expanding facilities to purchasing equipment and everything in between, Beach Bank has loan options to help your business grow.