Qualifying for a loan and getting approval from commercial lenders isn’t always an easy task. There are many factors that can get in your way and will penalize your chances of approval. But there are a number of things you can do to increase your chance of approval.
When it comes to getting approved for any loan, credit obviously plays a huge role. Commercial lenders require that you show that you have excellent credit to even be considered in the running, meaning you need to have a credit score of at least 680, which will almost always guarantee approval. But keep in mind that it is ideal to aim at having a credit score of around 700 for any chances of not being denied. This is a way for your business to that you can responsibly manage your finances. But this isn’t the only factor when it comes to gaining approval. If you are struggling with reaching a decent credit score, you can always start out with applying for a small loan to help build your credit history. Getting approved for smaller loans and making on-time payments will help build your credit effectively for larger loans needed in the future.
A good record of your cash flow is also going to play a role in getting your loan approved. Proving that you are making enough revenue to pay back the loan is crucial and something that all commercial lenders are going to highly take into consideration. A good way to successfully prove this is by showing consistent sales along with great bookkeeping and records.
Collateral isn’t always a breaking point when it comes to a loan approval, but it is still something that play a role. These certain assets that a business owner pledges to the lender if they cannot make the repayment, like real estate or equipment, can really add value to your loan since failure to make payments will guarantee some type of collateral in return.
There are benefits to applying for various loans from commercial lenders
It is extremely important not get discouraged right away if you don’t have all of these factors securely under your belt. There is still a good chance of getting approved for some type of loan, you just need to do plenty of research and find out which commercial lenders not have such strict requirements for loan approval. There are various places that may reject you, but with so many options out there, there are also a number of places that will approve your application.
Commercial lenders are there to provide a helping hand with the right requirements
As long as you can prove that your business is stable and that you are showing increasing sales, then you shouldn’t be worried about not getting approved for extra financing. You need to prove that you are worthy of getting a loan and that you know how to manage your money, sales and overall company, which are the main factors that are going to be taken into consideration.
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.