Business Loan Application Form Mistakes to Avoid

The business loan application form can often improve or decrease your chances of getting a loan. A well-prepared form is a plus. A sloppy, incomplete form may hinder your chances. Completing the form can be time consuming.

Therefore, some applicants do not spend enough time completing this form. They often fail to realize that the application represents their company. The first impression is often a lasting one. Therefore, it is sometimes difficult to overcome an initial negative impression. It is worth your time to complete the application accurately. Here are some simple things you can do to submit a good application and avoid creating a bad impression.

INCOMPLETENESS

Omitting important details can be a critical mistake. You may be leaving out details which might qualify you for a loan. You cannot always depend on the lender to follow up with you for missing information. A loan officer finding missing information in your loan application might get the impression that you are similarly careless in your business.

This might also be an indication about pursuing the loan. The borrower who takes the time to complete application accurately shows professionalism and their desire to get the loan approved. The application needs to be completed in its entirety. All blanks should be filled out. All of the requested information should be attached. Avoid supplying information on a piecemeal basis. This again shows a lack of professionalism.

VAGUENESS

The loan purpose section can be one of the most important parts of the application. Many borrowers do not realize that lenders expect them to spell out in detail exactly why the loan is needed. The borrower should have a specific agenda for how the loan will benefit the business and should be able to write them down clearly on paper. The applicant should also explain how they determined the amount of the request. The loan amount should be justifiable. The ability of the borrower to present a reasonable request is a critical factor for lenders in their decision making process.

ERRORS

The application should be free of errors. Financial information needs to be complete and accurate. Generally you will need three years of financial statements. If you lack the expertise to complete this section, enlist help from your accountant. Misspelled words and erroneous information are a reflection on your professionalism and competence. If the lender feels an omission was deliberate, this could also be interpreted as reflection of your integrity as well. Many loans are denied because the lender lacks confidence in the borrowers ability to operate the business. Your goal is to project an image of competence and character.

TARDINESS

When the application has been submitted the lender may request additional information. Responding to the lenders request in a timely manner is important. You and your application are being judged. It is important to realize than an evaluation of how you conduct business is part of the approval process.

Ref : www.loan.com