Applying for small business funding is an important first step in taking your business to the next level. Despite the value small business funding can provide, it’s important to understand the commitment you’re potentially entering, provided that your small business financial application is approved.
Here are five essential questions to ask before applying for small business funding:
1. Does your business meet the basic application criteria?
Applying for small business funding takes time to complete. Particularly, if you intend to secure financing through a financial provider that requires you to submit several years of business financial history, a business plan, and future sales projections.
Confirm that your business meets the provider’s basic requirements for potential approval, which can vary significantly based on the amount of small business financing you seek, your intended use for the funds, and your business’s history.At Lendr, we welcome your small business financing application, provided your business meets basic standards like:
Been in business at least 12 months
Has a credit score of at least 520
Has documented monthly sales of at least $10,000
2. How important is credit in the approval process?
If you don’t own business credit cards or merchant lines of business credit, or you’ve had some financial missteps that impacted your business credit, applying for small business funding may be futile with financial institutions that place a significant amount of their approval decisions on business credit history. At Lendr, we’re more concerned with your business’s present and future sales potential.
3. Do you understand the financing terms?
It’s important to understand the terms of any financing arrangement before you submit a small business financing application, including what you’ll pay to access funds if you are approved, and whether you are obligated to use all of those funds. Some financing agreements may require your business to use assets like inventory, accounts receivables or real estate owned as collateral for the financing agreement.
Lendr offers clients flexible funding options in amounts up to $250,000, rates as low as 1.25 percent per month, and terms starting at four months.
4. How much do you want to borrow?
A small business financing application for a few thousand dollars may cost a traditional financial institution as much in time and resources to process as one for several million dollars. Because of this, many financiers want to focus on clientele that offer the most profit potential.
Do you intend to borrow no more than a few thousand dollars? Or, do you simply want to know that you have access to financing should you need it? Providers that truly focus on serving the small business community may be more interested in considering your small business financing application than a major financial institution.
5. How long will it take to get cash, if approved?
Applying for small business funding is just the first step in a process that can take several weeks or months — depending on the provider. However, if your financing needs are driven by cash flow concerns or a once-in-a-lifetime business opportunity, you may not have the luxury of time. Once you’re approved as a Lendr client, you can access funds electronically in as little as two to three business days.
Ready to get started? Lendr’s application process leverages the latest advances in technology and initially takes about five minutes to complete.