Guide To Qualify for a Business Equipment Loan
Business Equipment Loan can offer the cash you need. Here are some guidelines from Small Business Administration (SBA) that will help you determine if you qualify for a small business loan/Business Equipment Loan.
CREDIT SCORE
Your credit score is the first factor that your lender will consider when making a decision. To have a better chance of qualifying for a loan, you must have a solid credit history or a credit score of 650 or higher with no bankruptcies in the last 10 years and no unresolved tax liens.
SOLID BUSINESS PLAN
Including information about your business plan in the application will help you stand out from others looking for a loan. You must present an organized and well-thought-out plan of action on how you intend to spend the loan amount productively in order to achieve your goals.
TIME IN BUSINESS
To qualify for a loan, your company must have been in operation for at least two years and be an active business entity with the secretary of state. If there are more than one owner, personal guarantees are required from all of them and always organize your tax returns.
MONTHLY REVENUE
A business must generate enough revenue to remain profitable and be able to repay the requested loan. You will need to provide the last 3 months of your business bank statements. Manage your bank accounts and avoid overdrawing your account, and set up overdraft protection.
COLLATERAL
There are various types of collateral that can be used to assist in obtaining a loan. The type of collateral you use will be determined by the type of loan you qualify for. A loan secured by collateral is generally easier to obtain; additionally, you may qualify for lower interest rates if you can back up the loan with valuable assets.
