Having access to funding for your small business is very important. When you have the loan you need, you can pursue new business plans, afford payroll, and much more. However, if you’re utilized your small business loan and are nearing the end of your business loan’s term, you’ll be faced with some important decisions. Depending on your cash flow needs, you may want to consider applying for another business loan through your current lender.
Most small business lenders are happy to work with existing customers again, especially if you’ve responsibly repaid your term loan and made payments on-time. Before you apply for another loan, you need to evaluate your financing needs.
The following questions to ask yourself and your online lender will come in handy when you apply for a new business loan.
How to Apply for a Second Business Loan:
Can I pay off the remaining balance of my matured loan and still receive additional business funding?
If you don’t finish paying off your remaining balance first, you might not get offered a renewal on your business loan. This is because they want to ensure that you will fulfill your obligations before taking on another balance.
Consider focusing on paying off the balance before you apply for the next loan.
If I extend the loan, will I be able to pay it off?
If you have an unpaid balance, your provider might ask if you have considered extending the loan. However, this is not a good idea if you can’t pay off the loan regardless of time.
Are the new terms comparable to the current loan term?
If you’ve paid your loan off on-time, your new loan’s terms should be competitive and comparable to your current offer. If you’ve established a good relationship with your lender, you may be able to negotiate better terms for your new loan.
Can I send in my financial information early to renew the loan before it matures?
A financing provider will likely appreciate it if you do this – it shows that you’re organized, ahead of schedule, and ready to discuss the terms.
How can I strengthen my business loan application?
It’s best to discuss your application with your lender a few months before your loan matures. Make your intention to renew known, so that you can discuss preliminary details.
Does my business still require additional funding?
Maybe it’s been a while since you reviewed your finances, or perhaps you have an accountant or business partner that handles financial matters more than you do. Regardless, whenever you’re making decisions concerning your business’s finances, you should keep an eye on factors such as:
- Debt repayment
The Bottom Line
You are placing yourself in a highly favorable position with your financing provider if you reach out with financial information. If your relationship with your financing provider is going well due to consistent, on-time payments, receiving another loan can be valuable to your business’s future.
If you’re unsure of it, you require more business financing then you should take time to discuss your finances with your accountant or financial adviser. Receiving another business loan does not have to be hard or a long process. You can use your existing relationship with your lender to get cash for your business.