The application process for an unsecured business loan is generally very fast. In most cases, you can complete the process in a matter of minutes using an online form.
However, this speed doesn’t mean that you don’t have to consider lender criteria. Most unsecured lenders will want to see certain proofs from you before they approve your application. If you fail to provide those proofs, the business loan application may fail.
This can be a problem as too many failed applications may show up on your credit report.
Thus, it’s important that you get it right the first time.
How can you secure an online business loan? Apply using these tips so that you truly benefit from the speed of the application process.
Tip #1 – Check the Lender’s Criteria Before Applying
Each unsecured business loan vendor has its own criteria to consider before you apply. For example, most will ask you to provide a New Zealand Business Number (NZBN) as part of the process.
They may also ask for several documents. Some lenders wish to see several months of bank statements. Others may only lend to companies that have been in business for a certain number of years.
It’s important to keep these criteria in mind before applying. Ideally, you’ll confirm that you meet all of them before sending your business loan application. If you don’t, there’s a possibility that you’ll get a refusal.
And if that happens, you may make it harder to get a business loan with future applications.
On top of having their own criteria, each lender reacts to loan-related issues in different ways. Some may also have terms buried in fine print that you may not notice until later on.
Such was the case for one retail store.
The borrower has enjoyed rapid business growth over the course of 12 months. This caused some cash flow issues as the company tried to manage this growth.
They’d already taken out several loans with different lenders. However, they’d failed to fully read the fine print and didn’t realise how unfavourable the terms were.
With the help of an unsecured business loan, they consolidated those loans and achieved better terms. Plus, they had faster access to financing as a result.
Remember that it’s not just the business loan application process that you need to consider. You also need to know that the loan suits your circumstances before you apply. Failing to check the fine print could lead to you applying for a loan that doesn’t suit you. This could lead to financial issues later on.
Most lenders will examine your credit score as part of your business loan application. They all have different tolerances in terms of what score they’ll accept. The key is that there’s usually a minimum that you need to meet unless you’re specifically applying for a bad credit loan.
A poor credit score can lead to your application getting refused.
If you know that you have a bad credit score, there are several actions that you can take to boost it. These include:
- Paying off as many debts as you can.
- Spending at least three months building up a track record of on-time repayments for existing loans.
- Avoiding applying for any types of credit prior to your business loan application.
- Checking your credit score and contesting any black marks that shouldn’t be on it.
- Keeping your credit card balance as low as you can.
The stronger your credit score, the more likely the approval.
You may need quick access to funds and don’t have time to improve your credit score.
The good news is that you may still be able to get an unsecured business loan. Apply with a co-signer and you can improve lender confidence in your ability to make repayments.
A co-signer is a person who makes the loan application with you. They agree to make repayments on the loan should you default. This means the lender now has two people servicing the loan, which makes them more confident.
A good co-signer is somebody who has a strong credit history and who trusts you to make repayments. Many opt to rely on friends and family members for this. Of course, the co-signer needs to understand the risks before they get involved.
Don’t think of lenders as faceless and unapproachable organisations. They’re willing to help you along with the application process. However, many business owners just don’t ask them any questions. Instead, they go right into the application process without having a good idea of if they’ll succeed.
Contact any lenders that you consider working with before applying. Create a list of important questions that you need answering and discuss any concerns you may have about the application process. Also, discuss any issues that you think may prevent your application from getting accepted.
In many cases, the lender will be able to provide specific advice related to your circumstances. They may also be able to indicate if now is a good time for you to lodge your business loan application.
There are many benefits to unsecured business loans. The speed of the application process is perhaps the largest of them. You can complete your application in a matter of minutes. And most unsecured loan vendors will let you know if the application’s successful within a day or two.
However, that speed does not mean that you don’t have to meet certain criteria.
Do all of the above before you apply for an unsecured business loan. This ensures that you’re in the best possible position to benefit from the speed of the application process.
Unsecured Finance New Zealand can help you.
And when you’re ready, apply online for an unsecured business loan. The process only takes five minutes!