Business Loan Tips

Sooner or later most businesses need to borrow money. While every loan process may be different, there are several things you can do to improve your chance of success. Most importantly, remember that our Relationship Managers are looking at many things, not just your financial record. At Coastal Community Bank we focus on relationships and lending to people, not just the business. Follow these tips to help prepare you for business loan success.

Business plan

• Be prepared to describe your business and what makes it unique.
• Be ready to discuss major customers, suppliers, and key employees.
• Do you have a current marketing plan and are you following it?
• Have you identified your business’s strengths, weaknesses, opportunities, and threats?

Consider your options

• Does the term of the loan you want match up with the purpose and collateral?
• Does the amount of the loan you are seeking match up with your projected cash flow?

Documentation you will need

• Be ready to provide personal financial statements as well as business financial statements including balance sheets and profit and loss statements for a minimum of two to three years.
• Make sure your personal and business tax returns are up to date, as both will be reviewed as part of the loan process.
• Gather your business legal documents (e.g. Articles of Incorporation and By-Laws or Certificate of Formation and Operating Agreement).

Business best practices

• Does your accounting system adequately show the condition and results of the business?
• How current are your receivables? What is your accounts payable policy? Do you take advantage of any discounts for prompt payment?
• What type of insurance coverage do you have? Is there adequate insurance for liability and property damage?
• Do you have a succession or contingency plan in place if you lose a key employee?
• Review your personal credit report. Look for inaccuracies and be ready to explain late payments. You can obtain your free credit report/score online by visiting freecreditreport.com.

Taxes

• Are all your tax filings current (payroll, property, income)?
• Are your returns prepared by a qualified professional to ensure your tax benefits are maximized?

Applying for a loan does not have to be a stressful experience. Choose a banker that you feel comfortable working with. The banker’s job is to fully understand your business and help guide you through the loan application process. Being prepared can help make the process more efficient and improve your chances of getting your loan approved.

This blog is provided for general information purposes only. The information provided should be used at your own risk and not as a substitute for legal and other professional advice in your state.