As a small business owner in New Jersey, you may want to apply for business financing to expand your operations or ease cashflow issues. Applying for a loan is the easy part; deciding the loan type and which lender to choose is trickier because there are many factors to consider. Our loan agents in NJ will walk you through the process of applying for a business loan. Keep reading.
Step 1: Review Your Credit History
A major part of the business loan application process involves lenders evaluating your credit score and history. Some lenders even review your personal and business credit history. Before applying for a loan, make sure you see where you stand. To check your credit history, you can review the reports from your banks or ask a third party to generate a credit score for you.
A good personal credit score is 700 or above in the 300–850 range, and a business score of 75 or above is generally considered good in the 0–100 range. Your chances of securing a loan rely on your credit score. However, private lenders can accept your application at a lower score too depending on other circumstances.
Step 2: Decide Where to Apply for a Loan
Besides traditional banks, you have private money lenders, alternative online lenders, and other financial sources to apply for a loan. To decide on your lender, you have to consider a few things.
Bank loans offer the lowest interest rates but have strict qualification requirements. A business must have at least two years of experience and good credit to qualify. If you are new and don’t have a great credit history, your best bet would be a private money lender.
Private money lenders offer various business loans, including short-term loans, cash advance loans, etc. Factors like the type of funding you need and when you need it will help you decide the most suitable loan type.
Step 3: Gather Documents for the Application
Different lenders require different documents for their loan applications. Here is a list of things lenders usually ask for:
- Basic business information, such as name, address, tax ID, and business plan (explaining how you’ll use the loan)
- Personal and business financial statements
- Business owner(s) details, including addresses and social security numbers
- Collateral information (private lenders may not require this)
- Personal guarantee document
Step 4: Fill Out the Application and Review Everything
You’ll have to fill out an application that asks several questions. Make sure you answer everything accurately because you’ll have to sign a statement saying all information in the form is to the best of your knowledge.
Read the loan terms clearly to see if there are any discrepancies. Review everything twice before submitting the final application.
Step 5: Loan Approval
After assessing your application, documents, and credit history, the loan agent will tell you whether your application is approved or not. The time required for application approval and loan deposit depends on your lender. Banks and traditional lenders take weeks, whereas private lenders process the application and loan within days.
You can choose Whitestone Fund as your business loan lender for a smooth and seamless process. We bring years of experience to the table with the highest loan acceptance rate and convenient payment terms with no hidden fees.
From small business loans to merchant cash advances, with us, you get a wide range of customized loan services in New Jersey. Contact our loan agents now to get started.
