My Working Capital
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You can’t sugar coat it. Applying for business finane is tedious and painful, so here is how to nail your application for a working capital loan.
The trick is to have everything in place before you start. Patchy paperwork raises questions about your business and your competence to run it.
It begins with the application form.
A lender wants to get personal and will ask for details such as your age, marital status, where you live, the location of your work place and your contact details.
You will be asked to provide photo identification – a driver’s licence and/or a passport. Preferably both.
Many lenders will want a Statement of Financial Position. This details what you have in the bank account, what you own and what you owe. This is really about demonstrating your credentials as a solid citizen who won’t, as the song goes, take the money and run.
The lender will conduct a company credit check. Poor credit history will make things difficult, but won’t necessarily rule you out. Most finance companies understand that the occasional credit blemish happens to the best of us.
Many finance companies will require security for a working capital loan and want to place a charge over the assets of the business, so they will check the Personal Property Securities Register (PPSR) to see who else you owe money to.
Lenders are looking for a positive picture of you and your business. Your financial documents will go a long way to provide that.
Yes, pulling all that stuff together is a headache, but it ensures you quickly get the funds you need at the best rates available. Ask your accountant or book keeper to help and give thanks for the invention of online accounting software!
If you want to raise finance against your receivables, it is important to provide evidence that you have delivered the goods or services to you customers.
The following documents will help.
Your application for a working capital loan will have the inside track if you are able to provide the information described above.
If credit insurance, personal guarantee insurance or a performance bond is involved it may take a little longer.
Finance companies are sensible enough to understand that not all their boxes will be ticked, but that might not rule you out – especially if you have given them a positive impression.
It’s a competitive world and lenders are in business to do business
The important thing is to create the impression of a strong business with strong and capable management.