Applying for Working Capital From a Lender | Fora Financial Blog
What You Should Know When Applying for Working Capital from a Lender
December 19, 2016

What You Should Know When Applying for Working Capital from a Lender

Receiving financing from a working capital lender can be an advantageous way to improve your business’s operations. Before you start thinking about ways to grow your business with additional working capital, you’ll need to know what to submit with your small business loan application.

In this post, we’ll include the documents and other preparations you’ll need to make during the small business loan application process. Many of the best small business lenders will require these various components, so make sure you’re prepared!

1. Bank Statements

In order to provide your small business with funding, a working capital lender will need to review some of your recent bank statements. When applying for a merchant cash advance, the lender will want to see frequent and small ticket transactions in your credit card statements. These qualifications will ensure that you’re able to handle the process of remitting your advance.

2. Your Credit Score

Most likely, the working capital lender you’re applying to will take your credit score into consideration when reviewing your application. Having a low credit score won’t necessarily hinder you from receiving working capital, but it might affect the amount of money you receive. Although the lender will probably run your credit at some point during the funding process, it is good to be aware of your credit score

3. Existing Loans or Other Outstanding Debt

Be upfront if you have already taken out a loan with a different lender. Most lenders will be weary of stacking loans, as this can be detrimental to them, the original lender and your small business. In addition, having other debt may affect how much money you qualify for, so be forthcoming about this as well.

4. How You Plan to Use the Working Capital

Depending on your needs, your business may be a good fit for a prepayment discount. If you’ll be using your working capital short-term, and the lender has prepayment options, this may be a good fit. On the other side, if you know that you’ll be using the money over a long period of time for something like an expansion project, a prepayment discount wouldn’t be beneficial.

If you’re applying for capital from one of the best small business lenders, it is likely that you’ll be asked to provide these documents when applying for additional working capital. Receiving financing from a working capital lender is a responsible way to attain funds for your business, so make sure you’re organized throughout the application process!

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].
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