We get it. You’ve gone from bank to bank, and you get denied a loan every time. It has become frustrating, enough so that you start to believe that the odds have always been against you when applying for a business loan. Philippines, luckily, now has a wide range of financial solutions to offer through different agencies other than banks. Still, you would want to avoid getting declined even by a private lending company such as ANDA.LI.
There are ways to avoid getting declined a business loan, but before learning how, you must learn the reasons behind applications getting rejected.
Be ready answering questions like, “How capable are you in paying for your loan if the industry is not doing well these days?” As a business owner, you not only need to have a full grasp of your company’s operations and finances, but you too must be up-to-date with the current status of the industry and be able to withstand the adversities. Do your homework because external factors can greatly jeopardize your turning profits and therefore hurt your future loan application.
LACK OF BUSINESS DOCUMENTS
Lenders require business permits, valid IDs, and other supporting documents to validate the information of loan applicants. It is the responsiblity of entrepreneurs to register their businesses to gain certificates and clearances from the local and/or national government. Remember that business permits are not just for displaying. They have the power to project credibility and trustworthiness of a brand. Good thing though is that lending agencies like ANDA.LI require less from business owners.
POOR CREDIT SCORE
The inability to present a good credit record can be detrimental in getting approved for your desired loan amount, even more so, your entire loan application. This is where your personal credit history would also matter. That is why you must be mindful of borrowing money. You might want to rethink about maximizing your credit card and paying only the interest. Follow one of the golden rules of budgeting and that is to live within your means.
INSUFFICIENT CASH FLOW
Balancing your expenses related to your business is imperative. You should be able to cover vital expenses such as payroll, utility bills, and commercial unit rent. Having an inadequate cash flow is an indicator that you are not equipped to pay off a loan. A surefire way of building up emergency funds is to cut unnecessary expenses. Clearly, it all comes down to one’s decision-making skills.
Relative to having a positive credit score, maintaining a good reputation comes in handy. If you’re known for being a gambler, that is a red flag. It matters to keep a good personal and professional background because lenders will take them into account. It will help them conclude how reliable you can be as a borrower. If you’ve made financial mistakes in the past, fix it immediately. Otherwise, you can say goodbye to getting approved for a loan forever.
CHOICE OF LENDING COMPANY
Applying for a loan manually, where you have to submit loads of requirements can be a big hurdle. Although, it’s every business owners’ duty to complete their business papers, with an online loan application, it does not have to be a Catch-22. An important key is to find a loan agency that can guarantee approval for minimal requirements, a short amount of processing time, the right amount of loan, and a low interest rate. Having said that, best to avoid loan sharks.
Prepare while it’s still early, build your credit standing while you still can, and complete your business documents. Ready your business plan, bank statements, financial projections, and other legal documents.
For a worry-free loan application, click here. If you have questions and other loan-related concerns, feel free to contact us through these numbers: (02)8983889 and (0917)5358956.