What to Do If Your Business Loan is Approved

Your business loan is approved. Congratulations! It's one of the most exciting phone calls you can receive as a business owner. It means that your business has received the financing that you've desired for opening your new business or expanding your existing business. Obviously, a celebration is in order! However, before popping open that bottle of champagne and proposing a toast, remember a few key rules before signing on the dotted line and picking up your check.

- Thoroughly review all loan documents, and understand what they mean before you sign and accept the loan when your business loan is approved.

If you don't understand something on the loan documents when your business loan is approved, ask the lender to explain. If you feel that the explanation was not clear, ask for further explanation, or ask that you receive a copy of the paperwork to take with you so that you can review, read, and research. Consult your attorney or accountant if you have questions.

- Return all required documents to the lender on time when your business loan is approved.

When your business loan is approved, there will be a number of documents and required paperwork that the lender will need before you can close on the loan. Your proposal and ideas were obviously impressive enough to the lender for them to them to tell you that your business loan is approved. Keep up that good impression that the lender has of you by promptly responding to requests for additional documents, information, and credit references. Once your business loan is approved and your money is in your account, you're your time and review your business' situation with care.

- Turn to your business plan.

Review the goals and objectives of your business, and review the information that you gave to the lender. The lender was impressed enough to offer you the money for your business - impressed enough that your business loan was approved. Refresh your memory regarding your business. Read your business plan weekly to keep these ideas continuously in your mind so that you can stay focused. Remind yourself daily why your business loan is approved.

- Turn to your loan proposal.

Yes, turn to your loan proposal. It seems odd to consider the loan proposal now that your business loan is approved, and now that the money is in hand. However, recall the reasons why you wrote the loan proposal and why you applied for the loan. The loan proposal served the purpose of demonstrating to the lender that you are a trustworthy, business-minded, energetic, responsible individual with a great idea for your business. The proposal also stated the items that would be purchased with the money. Review the ideas behind obtaining the loan. Keep your self-esteem levels high, and work only to succeed. Purchase only the items listed in the loan proposal, and use the money for nothing else when your business loan is approved. To find business success, stick to your initial goals for the loan, and maintain financial control of the money. Remember, you have not won the lottery. This money needs to be repaid in a timely manner.

Additionally, lender communications are very important, and much appreciated by the lender, when your business loan is approved.

- Maintain close contact with the loan officer when your business loan is approved.

Before you close on the loan, keep in touch with the loan officer to let that person know of your progress in gathering your final information needed to close. After closing, check in periodically with the loan officer to fill him or her in on how things are going with your business. When your business loan is approved, the lender has a vested interest in both your personal and business success, and will appreciate your efforts in keeping communications open by offering current information about your business. Keeping the line of communication open will allow you to possibly take advantage of the lender's other services, which may be needed by your business down the road.

- Communicate any business problems to the lender immediately.

Lenders don't like surprises, particularly if it involves bad news. Be honest, and if you've run into a snag, inform the lender before anyone else. If you prosper, the bank will prosper. If you fail, the bank fails. By being open and honest if something doesn't work out after your business loan is approved, the lender may be able to offer solutions or assistance to help you resolve your problems and get back on track. Hiding the problems, or worse yet, ignoring the problems or becoming elusive will only make the lender leery of you and your business, and may jeopardize your credit scores, or worse, your reputation as a business owner.

What to Do If Your Business Loan is Not Approved

Words that all business owners dislike hearing from a lender are, "Sorry, we just can't approve your loan." It's frustrating when your business loan is not approved, and it may feel like your business ideas are now a hopeless venture. Rather than letting those feelings of despair overcome you because your business loan was not approved, though, step back and examine things carefully.

- Don't take it personally.

While some lenders can approve or decline a loan based on the business owner's character, there are other factors involved when your business loan is not approved, such as credit scores, income, debt ratio, and the risk of the business. When a business loan is not approved, it is most commonly due to one of these four reasons.

- Be gracious.

If your business loan is not approved, be sure to thank the lender for reviewing your loan application and proposal. Don't leave on bad terms. You never know what the future holds, and it could mean that you'll cross paths again, especially if your loan approval was considered "borderline." Just because the lender said "no" today, it doesn't mean that your business loan won't be approved in few years, or even a few months.

- Ask the lender to review the details as to why the business loan was not approved.

Without getting defensive, seek information from the lender stating why the business loan was not approved. This information will be one of your most valuable tools when applying for your next loan. The more details you can get from the lender, the more prepared you can be for the future. There may be instances where you can correct the loan proposal or application when your business loan is not approved, and eventually get approved for your business loan with that same lender.

In the instance that your business loan is not approved, it's time to not give up, but rather, to become resourceful. There's more than one way to get the money you need for your business.

Small Business Loan Proposal

Applying for a small business loan can be exciting and yet stressful at the same time. For the best results and to heighten your level of confidence, be prepared when you visit the lender you've chosen for your business loan interview. After you have your business plan prepared, start preparing for the loan by writing a loan proposal to present to the lender.

The loan proposal should state some crucial information, and many details, about both yourself and your business or business idea. It should state who you are, how much money you need and where the money will be spent, how you intend to repay the loan, and what you plan on doing in the even that you cannot repay the loan.

The following are key elements to include in your loan proposal.

1. Summary.

This should be listed first in your proposal, but will be written last. It should contain clear, concise, accurate, inviting information about your business or your business ideas. It should summarize how the proposed loan will be used, how it will be repaid, and how it will benefit your business. Remember your competition in the summary of your loan proposal, and point out features of your business that are different from your competitors.

2. Management Profiles.

The management profile section of the loan proposal should explain, most importantly, who you are. Be prepared to reveal everything about yourself and your experience. Have a current resumZ included as part of the loan proposal, as well as a summary of your skills, qualifications, and other credentials for yourself, as well as for all other owners and key members of your management team.

3. Business Description.

It's not necessary to state the same information mentioned in your business plan as in your loan proposal. However, you do need to present a solid description of the business. Include a brief history of the business in your loan proposal, and detail the current activities. If it's a new business, explain the details of the business that will be developed. Your goal will to be to clearly demonstrate that you fully understand your markets, your competitors, and the industry, including current trends or risks and how you plan to overcome those potential dilemmas. If the loan is for an existing business, include literature that details your products or services, such as current sales sheets, brochures, or catalogs. Include attachments to your loan proposal for this section, such as letters from suppliers, customers, or other business references. Demonstrate through these letters that you provide excellent customer service, and that you pay back your creditors.