Understand How Long Is the Business Loan Application Process
If you have been
wondering how long is the business loan application process, it can be a long
and drawn out procedure. The longer you take to find a lender, the less likely
you are to get the loan you need. Besides, getting the money, you need when you
need it can be not very easy. So, while some lenders can help speed up the
process, many of them will try to get you to sign something before they can do
anything for you.
One way to start
a business is by obtaining a business loan. You can use this loan to purchase
all of the materials and equipment that you need to start your business. This
includes things like office furniture, supplies, computer software, and more.
You can also get the loan for a startup costs. If you are going to be using a
franchise, they can get you a business loan for as little as $500.
But, you should
not apply for the loan until you have a plan for what you are going to do with
the money you get.For instance, applicants need to
gather all the required certifications and documentation, then meet up with
lenders to hand over the said documentation. Once this process is done, files
are going to be taken over by specific departments, the duty of who is to
verify the veracity of the statements in the papers, and this can take a lot of
time. And still, applicants may be required to file and complete some other
documents, then wait for these documents to be verified too, then finally ready
for the closure.
It is a long process that, to be done correctly and
perfectly has to requires time. Of course, the more accurate an applicant is
with his statements and certifications, the less the approval may take in terms
of time.
CHOOSING THE RIGHT LENDER IS ESSENTIAL
Despite what has just been said, and always considering
how typically long the process of approval and lending of a loan is universal,
there is not a determined unlimited length of time, as it changes depending on
the lender itself.
There are three best options for an applicant to choose in
a matter of what lender to go to for applying to a loan:
Traditional banks, which generally take up to three months before delivering the approval of the loan and, then, the loan itself; Small Business Administration (SBA), which has similar times: you could have to wait for two months, but it could also take up to three months in this case; Alternative and Online business lenders, which probably are the fastest ones, take three to at least five business days for the application to be reviewed, approved, and for the loan to be lent. It’s obvious, although the timing could sound perfect, we are always talking about higher interest rate loans, so it’s best to take the alternative and online business into consideration when there is the need for a loan to arrive quickly.
REASONS FOR SMALL LOAN APPROVAL PERIOD
Of course, the length of time a lender requires to
approve the loan should not take more than three months. Depending on the
reason for the loan application, waiting more than said time could cause some
business owners to inevitably face problems such as missing opportunities,
delaying payments, be unable to expand their company at the right, proficient
time.
In applying for a loan, it is always vital to take care
of every little aspect and reason for it, so that the applicant can make the right
decision regarding which lender to turn to.
OTHER INFLUENCING FACTORS
Although it’s mostly the lender that makes the
difference, that is not the only factor influencing the length of time in which
a business loan will be approved and handed over.
For instance, the type of business loan a suitor is applying for also is essential to determine how long it will take for it to be delivered. Usually, if an applicant is asking for a business loan for his small business company, he may need instant funds.
Therefore, his best option will probably be the one
approaching an alternative lender to see what alternative fast loans offer he
may have.
MORE INFLUENCING FACTORS
The information that the suitor provides is also a vital
aspect in the length of time the process requires to be completed: for the
process to be faster, the applicant must speed up his work of delivery of the
required certifications: the quicker the documentation arrives, the sooner the
process can be completed.
Having all of the information checked out before handing
them over is also a good thing to do to speed the process up: if an applicant
makes sure the statements in his files are as accurate as possible, then the
checking procedures can take away much less time than they usually do.
Obviously, checking them himself does not count as
complete checking: specific departments will have to run validation and
cross-checked tests anyways so that they can be sure everything is okay.
But, handing over an incomplete document, or a
non-checked, therefore misspelled or wrongly made certification will lead to a
delay in the entire process.
So always check your paper!
INFLUENCING FACTORS CONTINUES!
Let’s also consider that the amount of time the process
takes can very much be influenced by the actual, real efficiency of the lender
himself: the way the channels work and connect, the number of files they have
to work on, the number of applications that are waiting to be taken in the examination
are essential aspects to take into account.
Lastly, the weight of the loan is essential to determine
how much it is going to take for a lender to approve it: the lighter the loan
requested will be, the shorter the time for its approval will be as well.
It can be concluded that though it might take a certain
time for a business loan application to be processed, the duration can be
drastically reduced by taking some personal steps and methods. And it is quite
essential to consider all the above factors and take it into consideration to
make the Loan granting duration shorter.
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