Key Documents You Need to Secure a Business Expansion Loan

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By Mark Metzler posted 02-08-2021 05:42 PM

  

When business is good, it is really good and expansion might be just beyond the horizon. More often than not, though, you do not have quite enough money to afford an expansion when the time is right. 

There is more business coming in than you can handle, but there is also an expiry date on delivery. If you decline the business, they will go somewhere else, but if you take it on and cannot deliver, your reputation goes down the drain. 

The only thing that you can do is to secure a business expansion loan. Here is an explanation of the key documents that you need to secure that loan. 

An Equifax detailed credit report

Getting detailed credit reports is where you need to start. Anyone willing to give you a loan will want to know that you can repay the loan without much strain. Equifax business credit reports are extremely detailed and will give you the needed proof that your business is on solid ground. 

Everything from your business identity, risk dashboard, business description, payment, and legal filings summary is included. If there is a blemish on your record, these reports will quickly show it. 

On the other hand, it will also do miracles in pointing to the stability and projections of your company and reassure the bank that your company is good for the money. 

Proof of Collateral

In uncertain times, credit providers want to protect their investments and the only way that they can guarantee that protection is through collateral. You need to let them know that you are good for the money and that you are willing to put some of your assets on the line. IT shows that you have confidence in your plans and the future of your business.  

Details of other loans

When it comes to loans, the one thing that really makes a difference is honesty. To secure a loan, you need to be upfront about your other loans. 

The banks and credit providers will then take these amounts into consideration and evaluate the risk. Having more than one loan is not bad, seeing that banks can monitor your reports and see how diligent you are in paying your loans. 

Business documents

As with any major loan, the bank or whoever your credit provider is will want to know that you are who you say you are. This will require you to include your personal identification documents as well as those of the business. Your business licenses and permits, as well as proof of your business registration, are among the most important. Your tax returns and bank statements will be included in your credit reports, but having hard copies of these documents at hand is never a waste. Rather go prepared and show your credit provider that you mean business than now being able to produce the goods. 

Business plan

Lastly, your credit provider will want to see that your business is heading in the right direction. A detailed business expansion plan is essential. Financial reports and summaries are great in providing the numbers and projections, but these projections do not mean much if they cannot be linked with an expansion plan. 

This is your Hail Mary that proves that you have a vision and that you need to strike while the iron is hot. It might be the final vote of confidence that your credit provider needs to approve your loan. 

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