When it comes to small business loans, several alternatives aim to provide assistance. These loans help in business expansions, as well as new research and development. They are also ideal if you are exploring new territories or planning to improve your marketing and sales efforts, including the recruitment process.
It is important to note that among the most significant steps in acquiring a small business loan in Ogden is knowing the major concepts about the view of the lenders in terms of the credit and risk profile. Lenders decide whether to approve a small business loan based on the borrower’s credit and risk profile.
As such, borrowers must take note of each factor when applying for a loan.
Lenders will examine the borrower’s credit report and score, including a background of making scheduled payments under loans, vendor contracts, and credit cards.
Current Loans and Cash Flow
Most lenders review the current loans and debts to find out if the cash flow of the borrower will be enough to pay the existing financial obligations and the new loan he is applying for.
Lenders need to know about your business assets, such as cash and accounts receivables to find a good base of assets to go in case of a loan default.
The accounting records and financial statements, including the gross margin, cash flow, accounts payable and receivable, EBITDA, and debt-to-equity ratio, among others, will also be reviewed.
While lenders prefer having financial statements audited by a CPA, a number of small businesses do not want to incur the expenses of a professional. This is why there is an option of having the financial statements examined by a CPA professional, although some lenders may not need either the examined or audited financial statements.