Top Tips for Applying for a Business Loan

This guide will help you increase your chances of securing business funding from Fleximize. It only takes five minutes to apply and with these simple steps, you could increase the strength of your business loan application.

Tip 1: Know your business inside out

When applying for a business loan, be prepared to answer straightforward questions about your business. From a lender’s point of view, it is a red flag if a business owner is not able to answer simple questions or provide a basic level of information. It’s like trying to sell someone a package holiday abroad without any flight details.

Similarly, you’re not just trying to sell us your product or service. Convincing a lender to invest in your business over a period of time is a harder task than an immediate purchase. You should feel comfortable to share information relating to your business including past performance, present challenges and future plans. Be prepared, be engaging and be yourself.

Tip 2: Keep your records up to date

When a lender assesses your business, you will expect to receive your latest records, such as bank statements, statutory and management accounts, proof of revenues, contracts, etc. Therefore, it’s essential that these can be provided quickly.

The best advice is to make sure your finances are in order so keep all your records current and readily available. That way, you don't have to compile everything at the last moment. Set strict deadlines on reporting, either weekly or monthly and stick to them – there’s nothing worse than trying to consolidate figures that aren't fresh in your mind. If you can’t keep up with your reporting, our best advice would be to hire a professional accountant to check your business accounts and credit report.

Tip 3: Have a plan and know the purpose

One of the most common purposes we hear for a business loan is to bridge a cash flow gap. So, as long as you know why your current cash flow is short, we can help you. It might be because you’ve had to pay out for some extra stock to get you through an increased sales period or pay overheads while waiting for a third party to settle an invoice.

Therefore, knowing and being able to present the details behind the purpose of the loan is important. Plan how much you want to borrow and what for, as having a clear plan will support your success in applying for a business loan.

Tip 4: Communicate honestly and openly

With our top tips above, your chances of success are greatly improved. So once you have submitted your application and are successful, treat ongoing communication with the Fleximize team as a top priority. We only say this because responding in a timely manner gives us confidence in your business and shows us a good impression of what to expect when managing your repayments.

But more importantly, be honest and always assume the person on the other end is trained to look for inconsistencies in your stories and numbers because that is true. No lender is likely to fund a business with questions floating around, so how you handle your application process shows us a lot about you, so make a good impression.

Tip 5: Don’t over-commit yourself

Many businesses tend to over-commit themselves financially very early on. This may cause problems later when trying to obtain further credit. Your chances of raising money aren't great when you’ve over-borrowed early on and can't keep up with the payments or if you've given away all the security in your business.

Our advice is to pace yourself and align your credit commitments with your business's long-term goals. Every time you take out finance, think about the long-term impact of the terms you agree to on your company and its assets and ensure they work with your future plans for developing and growing your business.

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Your common questions answered

How can I be successful in applying for a business loan?

To be successful in applying for a business loan, make sure you know your business inside out. Have a clear plan for how much you want to borrow and what you’ll use it for. Also, check your business credit report and ensure your finances are in order before applying.

What do banks check when applying for a business loan?

Banks will look at your business credit report, your financial records, and your business plan. They may also check your personal credit to assess how well you manage money.

Where is the best place to apply for a business loan?

The best place depends on your business needs. You can apply through traditional banks, online lenders, or alternative finance providers like Fleximize. Look for lenders who offer terms that suit your business and industry.

Can you get a business loan with no turnover?

It’s harder, but it may be possible to get a business loan without turnover, especially if you have a strong business plan and good personal credit. Some lenders may offer loans to new businesses that haven’t started earning yet.

Do business loans check personal credit?

Yes, many lenders will check your personal credit as part of the loan application process. It helps them see how well you manage money personally, which can influence their decision to lend to your business.

Can you get 100% business loan?

It’s rare to get a 100% business loan. Lenders usually expect you to invest some of your own money into the business to show commitment. However, there are some lenders who may offer close to 100% funding for the right business.

Is it worth getting a loan to start a business?

Getting a business loan can be worth it if you have a solid plan for how the money will help your business grow. However, it’s important to consider both time and financial costs and make sure the loan is something you can afford to repay.

How do I write a business plan for a cash loan?

To write a business plan for a cash loan, clearly explain your business idea, how much you want to borrow, and what the money will be used for. Include details about your business finances, growth plans, and how you’ll repay the loan.

What rules and regulations apply when applying for a business loan?

When applying for a business loan, you’ll need to follow the lender’s rules. This often includes providing financial records, proof of revenue, and checking your business accounts. Different lenders may have different requirements, so it’s important to be prepared.

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