If you once happen to ask an owner of small business what is his biggest problem in getting a bank loan, most of them will tell you about the snail’s pace of the bank procedures, those connected with review and approval of the applications they got.
Banks are known for the long-lasting process of a loan application and it may take several weeks to complete the formalities in full. Even taking into consideration the present economy recovery, the process has become even more complicated as the banks now put more demands for the borrowers and are more selective as to the candidates.
Loan application related:
- Check the sample loan application form.
- Learn how to find free applications for federal aid for students.
- Business loan application tips.
Applicants are the Ones to Blame for the Delays
The employees of the loan-brokerage firms often hear that the borrowers have problems with bank-loan processing. Still, the deeper investigation often shows that the applicants are often the ones to blame for the delays rather than the bank.
It’s often the borrower himself the primary person responsible for wrongdoing. Small-business owners are able to make the process faster if they provide the submission of the financial and tax-return information on time and communicate with the bank loan authorities openly. The ones to suffer most are often applicants with outdated financial reports or poor communication skills.
The main problem of business owners often lies in the fact that they are so busy with the daily routine and operations of their company that following the bank statements is often shifted down the “to do” list and often delayed for the undefined period. It’s usually the beginners who do it.
Tips for Business Owners Getting a Bank Loan
Nevertheless, in case you are looking for a loan, staying current with your accounting, financial statements and balance guarantees you the acceleration in the bank loan process of application — the side effect is relieving yourself and bank loan officer of a lot of headaches entailed by the formalities.
To be up to date with your accounting, you may follow the two simple tips – to hire a part-time bookkeeper and to meet your accountant on a regular basis, at least once a quarter. It will help you to be more aware of the issue and create certain checkpoints for yourself to follow. Besides, a part-time bookkeeper will make the process of reconciling your bank accounts easier and will bring your balance sheets to order, even if hired for a month or so.
The above-mentioned measures will not only make you a more attractive candidate for approval by the loan authorities but will also help you as a business owner know where your means are and where they are spent.
Personal Money Service does not want to say that it’s only the borrowers responsible for speeding up the process, banks are still extremely bureaucratic nowadays, but as the practice goes about the 2/3 of the cases are really slowed down by the applicants themselves. By the way, check 5 ways you can get small business loans for young people.
Pros and Cons Of Applying to the Alternative Lenders
There are many of the business owners are pushed out of the bank-loan market. As a result, they set their eyes upon a higher-priced area of the alternative small loans online that are famous for their speedy approval and loan processing. The same happens to the borrowers with bad credit, not enough collateral or problems with taxes.
Still, every borrow should take into consideration the fact that quick loans, though processing with minimum paperwork cost much more for the individuals taking them, while the bank loans can be obtained at extremely cheap rates, it’ll take the applicant to wait a few weeks before getting the needed amount into his disposal.