Traits Commercial Money Lenders See In Their Clients

Convincing a financial firm that you are eligible for a large sum of money is not an easy task. They fist through tens of candidates and evaluate their financial standing before granting them funds. So, you need to be at the top of your game to be in their good books, any book for that matter.

If your papers are in order, you can qualify for a business loan at commercial money lenders in Tacoma WA with acceptable terms and conditions.

In this post, we will go through some of the traits that lenders see in their prospective clients before granting commercial money to them. So, if you are an up and comping entrepreneur, this can help you in improving your odds.

Credit History

Credit history is one of the main tools that lenders employ to check the credibility of borrowers. This is predominantly a record of the borrower’s past financial obligations. If there are any violations to the terms, such as late payments and such, there are fewer chances the seeker would get a loan.

For a given commercial loan, the seeker entity must have a credit score above 700 to stand a chance. If you are a little bit higher, at 720, this is the informal yardstick; a higher score has more chances to qualify and a lower one has slim odds.

For those businesses whose credit score is not stellar, it is best to follow these tips before applying for a loan;

• Check if all the information is accurate
• Get rid of any small loan that you can
• Get personal finances in order

There is no need to rush if your credit score is subpar. First, sort out all the kinks in your application before moving forward.

Scarce Cash Flow

One of the primary things lenders check in your application is cash flow. It shows how much cash you have in hand to pay for the loan. Even the best hard money lenders in Tacoma WA cannot overlook this parameter. It is best to check for yourself whether you can afford to ask for a loan based on the cash flow health of your business.

If your cash flow does not match the potential of the lenders, you can tweak some changes in your financial process to get some slack. For instance, try to calculate your cash flow quarterly because it will optimize your books.

For those who are not sure about the health of the cash flow of their business, sit down with a financial consultant and discuss all the details. He can help with coming up on an angle that can improve your odds.

Business Plan

Everyone can come up with a business plan but there is no financial security without sticking to one. That is why lenders need sincere effort and non-spontaneity from business owners to be able to get a loan.

A well-oiled and detailed business plan will allow lenders to see the potential that you are seeing. All you need to do is put in the time and effort to ensure they do so. Small businesses often come short when it comes to proper documentation of plans and ideas. That is why they are rejected and need to go through the same applications several times with multiple lenders before they can secure funding.

Well-Thought Out Loan Application

It is only natural to think that you can improve your odds of getting a commercial loan if you apply at multiple institutions. In reality, it can harm your application because lenders run thorough background checks and scour financial history before making a decision.

Applying for too many loans at the same time can raise red flags over your application and makes the lenders spooky about your venture.

Expert Advice

Lenders expect seekers to seek guidance from experts before applying for a commercial loan. Without consulting professionals, businesses can be left in dark on many aspects of the whole process of securing and paying the debt.

For small businesses, accountants serve multiple posts, from bookkeepers to financial consultants. But if they are adept in what they do, they can steer the whole process in a seamless manner.

Experts believe that companies should not rely on internal opinion alone and seek third-party word on their financial health before moving forward with their loan application. This commentary can come from competitor funding agencies, other businesses, consulting agencies, etc.

Organization

Before approaching lenders, it is best for enterprises to have their houses in order. It starts from the loan application itself and then other aspects of business documentation, payments, paperwork, etc.

Keep in mind half-cooked reports and statements can only get you so far. Again, you can assign all the work to the accountant and give it time to come through, or you can hire a consultant that can help you with the heavy lifting.