Small business lending: A guide to applying for a loan

UMBF

The truth about bankers is that we love nothing more than helping people turn their dreams into reality. We entered this line of work to help others reach their financial goals and find their individual path to success. For many, that means opening and running a successful business.

For business owners who are ready to take their company to the next level, we've provided some insights into how to prepare for a business loan, including an overview of the process and what to expect during each step of the way.

Preparation is pivotal

Lenders want to know how strong your small business is financially. This determines if they feel comfortable extending credit to you. There are policies and guidelines in place to help guide their decision. By educating yourself and preparing, you have a better chance of a loan approval.

In most cases when applying for a business loan, you will be asked for a variety of figures and documents from your business. And, banks will also want information about your personal finances to ensure you are financially stable and able to cover any losses your business may incur.

Small business lenders will look at:

The one-on-one conversation

Now that you have a better understanding of what is needed for a small business loan, you should have an in-depth conversation with your lender about your loan request. Every business is different as is every business loan. Your lender can evaluate your business and financial goals and help you determine what is the appropriate loan structure to meet your needs. You will then complete an application and provide the necessary financial documentation. Your lender will also want to visit your business to see the operations, real estate and inner workings of your company.

Once you have met with your lender and your application is submitted, the bank will pull your credit for a thorough review and begin the underwriting process. Typically, you will need to wait 7-10 business days for a decision. Once you have the lender's decision, your lender will guide you through the process as funding can take up to 30-45 days depending on the type of loan, so be prepared to give additional documentation.

While this overview does not cover every detail of applying for a loan, it serves as a good foundation for what to expect. By understanding your lender's expectations at the start of the process, you are already ahead of the game and laying the foundation to take your business to the next level.

Our small business specialists are ready to help you with your small business financial needs through guidance, support and service. We also offer a series of online tutorials to help your business succeed. We're always adding new topics that we believe can help you build and manage your business. Explore our small business courses.

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Disclaimer

UMB Financial Corporation published this content on 13 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 January 2022 20:01:06 UTC.