Learn 7 Tips To Get Your Small Business Loan Approved
3. Lower Your Debt-to-Income Ratio
Reduce your debt-to-income ratio as much as feasible before asking for a loan, both professionally and personally. This is one of the most basic considerations for lenders. Lenders view excessive debt in relation to income as an indicator that you may fail to make payments.
4. Maintain the Highest Possible Daily Bank Balance
There are a few reasons why you should keep your daily bank balance as high as possible. Some loans are approved based on a business’s daily bank balance rather than its revenue. Lenders also want to know that you have enough cash on hand to meet your loan payments.
5. Increase Sales as Much as Possible Before Applying
Lenders are more inclined to accept loans for revenue-generating small enterprises. You won’t have any revenue to enhance if you’re just starting off. If you are currently in business, invest some time in increasing your sales as much as possible.
• Working with a professional marketing firm to develop a fresh campaign can help you increase income.
• Regularly running PPC advertisements and then retargeting
• Capturing emails and running an email marketing campaign to nurture prospects until they become paying customers
There is always something you can do to increase business revenue and demonstrate to lenders that you can repay a loan.
6. Understand Your Personal and Business Credit Scores
Knowing your personal and company credit ratings will help you get approved because if your score is low, you can clean up past due accounts and attempt to improve your score before applying for loans.
Business credit is assigned a score between 0 and 100. A business credit score of 75 or better is desirable. Don’t know what your score is? Experian or Dun & Bradstreet can provide it.
If you don’t have business credit, your personal credit will be considered when applying for a small business loan. In this situation, a personal score of at least 640 is required to qualify for most loans.
