6 Expert Tips to Make Commercial Lending a Breeze In 2023

Securing a business loan for a regular business can be difficult even in the best of times. Trying to obtain a loan for a non-conventional business can be even harder. If you’re managing a church, school or non-profit organisation then you’ll know exactly what we’re talking about.

There could be many reasons why your church or school would require a large financial input. Upgrades or extensions to the existing buildings are among the top reasons schools or churches might have to resort to commercial lending from a bank or other financial institution. Here’s what you need to know before planning your next loan.

Commercial Lending—Can be Easier Than You Think

Despite the many loan adverts floating around, the process can be frustrating if you don’t know where to start—or if you don’t have the necessary documents. The good news is that securing a commercial loan doesn’t have to be difficult. Our experts have created a few user-friendly tips to make your loan applications considerably smoother.

1.Research Options

Getting ready to apply for a loan is just like making a purchase. You wouldn’t buy new equipment for your church, school or business without proper research into the product and the vendor you’re getting it from.

Choosing a lender for your next business loan is no different. Ideally, you want a lender that can offer you the best premiums at the lowest interest rates in the shortest period possible. Always compare loan options, lenders, and customer service reviews to ensure that you’ll be doing business with a reputable company or bank.

It’s a good idea to start with the bank, law firm or financial institution that you usually bank with. If they can’t offer a solution, branch out to establishments that claim to specialise in the type of loans you’re requesting.

2. Compile a Business Plan

The reason you’re opting for business lending may make it necessary to draw up a business plan. This is a professional and effective way to provide the lender with a detailed plan of how the requested money will be spent.

If you’re going to be renovating or adding onto an existing building, it’s an excellent idea to include the floor plans. Include any relevant documents and quotes that detail why you’re asking for the specified amount.

Quotes and estimates from contractors would also form part of this package. Be sure to include materials as well as any labour costs that will be paid for smaller, in-house jobs that you or community members will be doing to get the job done while keeping costs at a minimum.

3. Gather Supporting Financial Documents

The lender you’ll be approaching for a business loan will always have a list of financial documents that they require from you. These documents are needed to prove that your facility has the funds and means to repay the loan.

Some of the more common documents required include:

  • Profit and loss statements
  • Latest bank statements
  • Business registration and licensing documents
  • Income tax returns
  • Financial records showing expenses
  • Updated lists of assets and liabilities
  • Mortgage or lease agreements
  • Copies of other existing business loans—often loan consolidation streamlines the required premiums
  • Any other financial documents that show that your organisation has funds coming in on a regular basis

4. Prepare in Advance

Don’t wait until the day before building and renovations are scheduled to begin approaching lenders. While lenders may promise short turnaround times and instant approvals, it’s essential to keep in mind that this isn’t always the case.

Our experts advise that you start the process as soon as possible. In fact, a good time would be as soon as you have your quotes and required financial documents. Don’t make any commitments to vendors or contractors until your commercial loan has been approved.

5. Consider Affordability

In some instances, loans can be difficult to secure, especially if the applicant doesn’t have all the required documents. With that in mind, potential loan applicants often grab the first institution that gives them a ‘yes’ verdict on their application.

The problem with this is that it may be difficult to meet repayment conditions if the premiums are higher than anticipated. Therefore, it’s a good idea to review repayment amounts from a realistic point of view. In instances where premiums seem too high, consider requesting an extended repayment period. Speak to your accountant about what your institution can genuinely afford to pay, so you don’t over commit and run into financial trouble down the line.

6. Speak to Sponsors in the Community

Our experts also recommend speaking to potential sponsors in the community. If building materials or skills can be donated or sponsored, it may reduce the amount of money you need to borrow. If you reduce the capital required, you also increase the likelihood that you will qualify for a business loan.

Final Thoughts

The key to securing a business loan lies in the preparation you put into the application process. It’s always recommended to gather as many supporting documents as possible. Get several contractor quotes and make a list of the work that can be done by employees or staff members—do all you can to keep premiums low and prove you’re a trustworthy candidate for that loan!


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