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Want To Get A Loan? Top Tips For A Successful Application

At Nextfin, we help hundreds of small businesses find and apply for loans from P2P platforms or other alternative providers. As such, we have a very good understanding of what is required if you want your application to run smoothly, be processed quickly and be successful. For businesses and entrepreneurs considering applying for a loan here’s a list of what you need to be loan ready:

Unsecured Loans

Lenders want to review the affordability of a loan. Therefore they are looking for evidence that shows that the business can make repayments even if things don’t go exactly to plan. Healthy profit margins and good money management are important and they will want to be aware of existing business loans or regular monthly payments and how these have been managed.

It is worth noting that generally lenders won’t loan more than a month’s turnover without additional security. So if you are seeking more than a month’s turnover applying for a secured loan would be a better option for you.

What you need:

  • Proof of turnover, revenue and profitability. That means having bank statements and unabbreviated accounts to hand and ready to send. You will need bank statements going back at least 12 months.
  • Trading history: the length of time that your business has been trading and details of the business including the sector that it is in.
  • Payment history: if you have any outstanding finance, late payments of CCJs make sure that you have the details available. It is always better to be upfront with loan providers about issues and explain the reasons behind them rather than fail to mention them – the loan provider will find out.
  • Director(s) information: the names, address and history of directors going back a minimum of 3 years. Include copies of ID – passport for instance.
  • The loan amount required: it sounds obvious but it does get missed so make sure you are clear about the amount that you need.
  • Details of how the funding will be used: This should include what it is used for and a breakdown of costs.
  • Requested repayment period: what period would you like to repay the loan over? Note that the loan provider may recommend a different period for repayment depending on the circumstances of your business.
  • Declare details of debts and/or any other loans and creditors. 

Secured loans

Affordability remains the key element of loan success; lenders want to see that even if things don’t go to plan repayments can be met.  But when seeking larger loans (relative to turnover) lenders look for security against assets held by the business or by an individual(s) within the business. Which means that if applying for a secured loan you need to have the full details of those assets; inclusive of value and any existing debt that uses the assets as security.

What you need:

  • Proof of turnover, revenue and profitability. That means have bank statements and unabbreviated accounts to hand and ready to send. You will need bank statements going back at least 12 months.

Trading history: the length of time that your business has been trading and details of the business including the sector that it is in.

  • Payment history: if you have any outstanding finance, late payments of CCJs make sure that you have the details available. It is always better to be upfront with loan providers about issues and explain the reasons behind them rather than fail to mention them – the loan provider will find out.
  • Director(s) information: the names, address and history of directors going back a minimum of 3 years. Include copies of ID – passport for instance.
  • The loan amount required: it sounds obvious but it does get missed so make sure you are clear about the amount that you need.
  • Details of how the funding will be used: This should include what it is used for and a breakdown of costs.
  • Requested repayment period: what period would you like to repay the loan over? Note that the loan provider may recommend a different period for repayment depending on the circumstances of your business.
  • Proof of security/ownership and valuation. 
  • Declare details of debts and/or any other loans and creditors.

Authors: Oliver Murphy & Sacha Bright

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.

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