Congratulations on making it this far! The world of commercial lending can be an intimidating place, so the fact that a borrow starts to get their ducks in a row to apply for a loan is a huge step in the right direction, and is a giant leap forward in making business dreams come true.
But how does a potential borrower get started with a commercial loan? The first thing is to understand that the process does not happen overnight. It is going to take some time and that is okay. So just be patient. A borrower is going to spend a great deal of time organizing, gathering and sorting various financial documents.
So get organized. If you are not a numbers person, you might want to become one. If you have a professional accountant, now would be the time to begin to understand what exactly they do. If, however, you already have your nose in the books, then you are going to be just fine. If you understand how all of your accounts work, and how to access all of the information, you are already ahead of the game and will simply need to organize the information to present to a potential commercial loan application. In addition to this, know exactly how you will be using the loan and how it will benefit your business. This goes beyond simply crunching the numbers. A solid business plan, that is updated to include the expansion that will be possible with the commercial lending, might not be required by a lender, but it most certainly will not hurt to have in place before beginning the application process.
Also, pay attention to detail. It is far better to provide too much information than not enough. The SBA and the lender are going to determine if you are financially competent enough to not only be responsible with their money, but also if you are going to pay it back. If they have to pull information out of you, it does not bode well for you being fiscally capable of handling significant debt on your own. That is not an impression that you want to leave with potential lenders.
Finally, keep your financial records up to date. Not only does this apply to the application process, but also as the loan is current. You should try to fall no further behind than 60 days. If you are detail oriented and organized, this should not be a problem at all. No lender, who is looking to grant you a commercial loan, is going to make a decision based on financial information that is outdated.
Plan to devote a great deal of time to this process. If you must, seek help, whether that be mentors or other small business owners who have gone through the process. Remember, you do not have to do this alone. There are plenty of others who have successfully obtained a commercial loan, but it does not come without a great deal effort.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.