Access to affordable capital is essential to running a small business. Still, the process of applying for a business loan can be daunting — and approval isn’t a sure thing, even if you have good credentials.
According to the Federal Reserve’s 2021 Small Business Credit Survey, 12% of businesses that needed financing but chose not to apply did so because they believed they would be turned down. It’s important to ensure that a business owner is looking in the right place, says Tony Giuliano, vice president of credit policy and underwriting at Accion Opportunity Fund, a nonprofit community development financial institution based in California.
“Perhaps the biggest mistake that business owners can avoid is submitting incorrect or stale items to the lender,” said David Tuyo in an email. Tuyo, the CEO of University Credit Union, which serves employees, students and alumni of several universities throughout California, added, “Borrowers need to ensure that everything they submit as part of the application process is entirely accurate and timely.
Magennis recommends using basic financial software, such as QuickBooks, to simplify organizing and quickly pull your financial numbers.3. Going through the process alone Whether you’re trying to get a business loan for the first time or you’ve been through the application process before, it can be overwhelming to manage all of the moving parts, especially while continuing to run your small business.