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What’s Involved - Business Loans

In the section “Need a Loan, Business Loans”, we covered some key things to know about applying for a business loan.

Here we will cover key aspects of what is involved in actually applying for a Business Loan and what the applicant needs to know.

Preparation

It's essential ahead of time to prepare a number of documents about the business or the proposed venture not only to determine yourself if there is a capacity to pay but to convince the lender as well. Documents needed may include;

  • detailed business plan;
  • cash flows for a period at least equal to the term of the loan;
  • set up costs; and
  • past history of the business (tax returns).

Loan security

Loans can be secured or unsecured by various types of assets, including property or business assets. As a rule, the less security you provide or non-property security will result in a higher the interest rate for the loan.

Seeking advice

Depending on the business type or the age of the business (new or existing) there will likely be a need for you to contact your accountant or business adviser to discuss the loan application and the need for the preparation of some supporting documentation.

It is critical that yuo ahve a good understanding of whta yuo are doing and that it is a viable proposition. It is YOU the aplicant who needs to be capable of convincing everyoen around you, especially the lender that you knwo what you are doing and have thought it well through.If you have any dounts, that will only reflect in the application (through lack of descritpion and comments) and subsequently the lenders assessment of the dealing will diminish.

Supporting Documents

The following is a guide to key supporting documents lenders may request when assessing a business Loan application;

  • business tax returns;
  • personal tax returns;
  • cash flow forecasts;
  • BAS statements (last 12 months);
  • detailed business plan;
  • business bank statement;
  • personal bank statements;
  • set up costs;
  • expansion costs;
  • past business history;
  • details of current debtors and creditors; and
  • details of current assets, including stock lists

Our team will happily work with you throughout this process to prepare a properly documented and well supported and justified Business Loan Application.

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