One of the most common places we look at when it comes to financing options for our business, are banks, lenders or commercial financiers.  All these guys are in turn looking for profitable clients. Anyone new to the process can find applying for a business loan quite daunting.

Although the steps can vary between lenders and businesses, the loan application follows a basic sequence. Being equipped with the right information will help alleviate the overwhelming feeling you get when it comes to business loans.

To bring more clarity to the process we have included an outline below of the basic steps involved when applying for a business loan

1. Speak with a legitimate Finance Broker

A finance broker is basically someone who is an expert in the industry who will take the guesswork out of finding the mortgage product that will suit you and your needs.  It will also save you a lot of time and energy on research. With a broad choice of lending businesses, finance brokers can propose a specific lender based on the funding scenario suitable to you and help the borrower estimate the time it would take to attain funding.

2. Apply for a loan or lease

Once again it is recommended this is done with the aid of your finance broker, who can be of assistance with your loan or lease application.  They will also be able to assist with the verification of documents which includes a business profile containing information such as: the type of business, the company’s annual sales, the total number of employees, a profit and loss statement, personal financial statements, available business financial statements, information regarding the length of time the company has been in business and details about recent ownership history. A business plan should also be available especially for a start-up company. Eventually when the loan is already locked in, information about the collateral offered must also be provided and this includes personal real estate, property, business equipment, accounts receivable, inventory and supplies, or business real estate.

3. Wait for the lender to assess documentation.

Assessing documentation includes verifying the authenticity and taking a closer look at the client’s credit file, credit rating and background and also the financial history of your business. It is important to note that those with a good credit rating and a great financial history or projection have a great chance of success with their application.

4. Receive loan approval or otherwise.

After everything has been evaluated, a decision will be made whether your loan application will be approved or not. In relation to the length of time that a business loan would take to get approved would differ depending on the lender and the business’ unique circumstance.  This can be anything from a few days to several months. You may also seek the aid of your finance broker to give you a rough estimate of how long it may take for your loan to be approved once the application process starts. Once approved, the borrower and lender will then sign all the relevant documents, after which funds are disbursed or loans are settled if a property purchase is concerned.

When everything has been settled and your loan approved, business loans are usually payable from one to fifteen years which again depends from various lenders and the amount of money borrowed. A business loan backed up with residential property security can have a term as long as thirty years. Relatively, a loan can also be patterned on an interest only basis.  Be mindful though that the principal amount would still be owed at the maturity of the loan.

For more information on any of the above do not hesitate to contact Mark Connolly on 07 3512 8866 or