Table of Contents:
- Choose an SBA-Preferred Lender
- Know What Collateral You Have Available
- Update Your Business Plan
- Keep Business and Personal Funds Separate
- Prepare Up-to-Date Financial Statements
- Get Documents Signed by Third Parties
- Have a Life Insurance Policy
- Make Yourself Available
Whether you need to purchase inventory, pay for new equipment, or hire employees, getting the money you need to make it happen can be a long and sometimes tedious process. The average small business loan process takes 30 to 90 days, but that timeframe can be shortened or lengthened depending on how prepared you are.
If you need help stabilizing your cash flow or purchasing new equipment to keep your small business running, you know how important it can be to move swiftly when needs arise.
That’s why we’re getting down to the details of obtaining a quick small business loan to keep your business growing and succeeding.
How to Get Your Small Business Funded Faster
There are several strategies you can implement to get fast business loans. The two most effective ways to expedite the process are to choose an agile and flexible lender and come to the table prepared.
You’ll need several documentation forms so your lender can fully understand your business and its current financial situation. If you organize your application information beforehand, the right lending institution can work quickly to assess your financing options to let you know if you qualify for the loan amount you need.
1. Choose an SBA-Preferred Lender for Quick Business Loan Processing
If you’re interested in an SBA loan, choosing an SBA-Preferred lender can make a big difference in the time it takes to approve your small business loan.
Only the cream of the crop earns the Preferred Lenders Program (PLP) delegation, which means they have a proven track record of complying with SBA regulations and can expedite the approval of small business loans.
By partnering with a Preferred Lender, you can trust that your loan will be structured, documented, and handled carefully.
A Community Development Financial Institution (CDFI) is perfect for small business owners who find the business lending process intimidating or if they’ve been turned down for funding by a traditional bank. CDFIs are considered alternative lenders that are committed to fostering economic development, job creation, and community revitalization by providing tailored financial solutions and support.
As a preferred lender for a government-secured loan, CDFIs often have teams with experience working with business owners who may need extra support during the loan process. They’re also more likely to have various financial products and more flexible underwriting requirements than traditional banks or credit unions.
2. Know What Collateral You Have Available
Different loans have varying collateral requirements. Generally, the amount and the loan term are the main factors determining the collateral needed.
Collateral options can include (but are not limited to):
• Real estate
• Outstanding invoices
• Certificates of Deposit
Collateral may only sometimes be necessary depending on the type of business loan you qualify for and if you have a strong business and personal credit score.
Community lenders like TEDC Creative Capital may be able to offer more flexible collateral requirements than traditional lending institutions like banks and credit unions.
3. Update Your Business Plan
If you’re applying for a business loan and want to get approved quickly, you’ll definitely need a business plan. This document is a great way to organize your business goals and help you obtain funding. A traditional business plan format consists of nine sections:
• Executive Summary
• Company Description
• Market Analysis
• Organization and Management
• Service or Product Line
• Marketing and Sales
• Financial Projections
By creating a solid business plan, you can clarify your current situation and give yourself a clear direction for the future. Plus, it shows lenders that you’re serious about your business and that the loan amount you’re requesting is a wise investment.
4. Keep Business and Personal Funds Separate
We all know how important it is to separate our personal and work lives.
The old saying, “Don’t mix business and pleasure,” has held true for generations for a reason.
The same goes for your finances. Keeping your personal and business finances separate is crucial to protecting your credit and assets from all angles, especially when applying for a loan.
Lenders want to see how your business acquires money and how you spend it. If your personal and business finances are mixed together, it can be almost impossible to analyze your true business performance.
Maintaining a clear distinction between the two makes the underwriting process swift and simple.
And as a bonus, separating your finances allows you to build business credit. This is a great way to establish your business as a separate entity.
Take the time to separate your personal and business finances with designated accounts and transparent payroll practices, and use your business credit card solely for business-related expenses to keep your finances on the up and up.
5. Prepare Up-to-Date Financial Statements
When you’re applying for any business loan, you must ensure your financials are up-to-date. Your personal and business financial statements should be current within the last 12 months.
If your financials need to be updated, your lender will ask you for your most recent documentation to comply with the SBA’s requirements. Nobody wants to create more work for themselves, especially regarding paperwork – using financial software like Quickbooks, or something similar, can help you keep track of your finances and simplify the process.
Provide a clear pro forma statement with your initial loan application. You can avoid having to gather and organize more paperwork later on to keep the process as efficient as possible.
Regularly take a few days to ensure your financials are current and ready to go. It can save you time and hassle in the long run and increase your chances of getting a loan approved.
6. Get Documents Signed by Third Parties
If you’re applying for a small business loan and leasing a location, ask your lender if there’s a landlord subordination form. They’ll likely have a specific form for you to fill out and provide to your landlord.
It’s important to get this done as soon as possible, so your landlord is aware of the situation and can sign the form if needed. If you still need to sign your lease, it might be a good idea to present the lease and the landlord subordination form together so everything is handled simultaneously.
A landlord subordination form is just one of many requirements when applying for a small business loan, but it’s essential. Remember to ask your lender about it early to provide your landlord time to review and sign the document.
7. Have a Life Insurance Policy
You may be wondering why you need life insurance when applying for a business loan. Life insurance is another form of collateral for a small business owner and is usually an SBA lending requirement.
It can also provide peace of mind for your family if you pass away. They can pay off debts without worrying about how they’ll manage financially. It’s not something we like to think about, but it’s essential to plan for all of life’s possibilities – and life insurance does just that.
8. Make Yourself Available
The loan approval period isn’t the time for taking on new time-consuming projects, going on vacations, or traveling out of the country.
Your lender may need you to provide additional documentation or be present for appraisals of your property, so it’s important to be available and responsive. Make sure you’re able to meet with your lender and have conversations when needed.
Being unavailable during the loan application process can delay your approval or lead to a denied application.
Remember, your lender is there to help you get the fast business loan you need in order to grow your business. Being available and responsive to their requests is a key part of making the loan as smooth and efficient as possible.
How Long Does it Take to Get a Loan Application Approved?
The length of time it takes to get your small business loan approved varies depending on several factors.
TEDC Creative Capital specializes in finding specific funding sources or combinations of loans that can support small businesses at varying levels of need – and that can take some time!
However, if your application is straightforward and you have all your documents in order, the process can be as short as a few weeks. If you need more guidance on how to be loan-ready or have special financial considerations, the TEDC Creative Capital team can support you at your pace to prepare for a business loan.
The loan process can generally go fairly swiftly if your loan application is well-prepared with all the necessary documentation and accurate information.
Apply for a Quick Business Loan with TEDC Creative Capital.
The application process with TEDC Creative Capital starts with filling out a Prospective Borrower Application on our website and attaching the required documents. A team member will reach out to you after submission.
We pride ourselves on making the loan application process as painless as possible and providing quick business loans for prepared entrepreneurs.
We offer various loan options, from inventory financing to working capital loans, and we’ll work with you to find the perfect fit for your unique needs.
If you need additional services to help prepare for your loan, we’ll connect you with our resources and community partners, who can provide expert guidance and support.
If you’re ready to take your business to the next level with a quick business loan, choose TEDC Creative Capital as your lending partner. We’re here to help you get your business the cash it needs.
THANK YOU TO OUR SPONSOR, OKLAHOMA BUSINESS INCUBATOR ASSOCIATION
The purpose of the Oklahoma Business Incubator Association (OKBIA) is to be a network that can help support and further the development of small business Incubators and other entrepreneurial support organizations in Oklahoma, whether for profit or not for profit. We advocate for, connect, and develop Incubators.