How To Get Your Loan Request Approved Faster

You want financing. You know that your business is a people business. One of the main objectives of a people business should be to make it easy to do business with you. So let’s help you make it easy for your lender to do business with you by approving and funding your loan request.

We review loan requests and new projects daily for a direct lender and a private equity group. Did you know that you can avoid the pet peeves that many underwriters have? A real thorn in the side of the underwriter’s and lender is when a developer or borrower will virtually hide how much capital they want to raise. We often get an executive summary’s or copy’s of a business plan and are expected to hunt through pages and pages of fluff and non-essential information to find out how much money they want to borrow.

Remember, we are in the finance business. We are NOT in your business or industry. We may look to support your industry or class of business, but we are in the business of providing growth capital in one form or another.

Consequently, on page one, you should always be sure to prominently state how much money you need to borrow to accomplish your goal and how long you want to pay it back.

If you know what type of loan structure(s) you want to utilize, please add that as well. For instance, if you want to secure the loan with real estate, inventory, equipment, receivables, stocks, bonds, etc. or any combination thereof, say so. This can help you save lots of time and make it easier for the underwriter to move your loan request along to approval. If you make it hard for the underwriter or lender to find the information they need, then you will find it far more difficult to get what you want.

Second, don’t try to tell the lender what kind of rate you want. By doing so before they are truly interested, you will probably find your loan request rejected. Do NOT kid yourself thinking you will qualify for the same rate as Microsoft or IBM. It’s highly unlikely you will. However, once you do have some documented interest from a lender in the form of an LOI or term sheet, that’s when you can discuss better interest rates.

Third, when you provide your projections in a proforma or financial model, most underwriters prefer to see them in an Excel spreadsheet format as it is far easier to track line items over several months or years. Often we’ll get a proforma or financial model in a PDF and end up having to tell the developer/borrower to convert it to an Excel format. This can add several days to the approval and funding process. But, with just a little forethought, you can easily avoid such a delay.

Remember, your lender and their underwriters, can be critically important to the growth of your business. But, at the end of the day, they are just human. Try to make it easy for them to understand your vision. Try to make it easy for them to do business with you.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com