Obtaining a small business loan can be a vital step in growing your business or navigating challenging times. Whether you’re looking to fund a startup, expand your existing business, or manage day-to-day expenses, knowing how to navigate the loan application process is essential.  However, the loan application process can seem complex, especially if it is your first time attempting to apply for one. New Bridge Merchant Capital is here to walk you through the small business loan application process and help you make the right choice for your business.

Key takeaways:

• Understand your loan needs.

  Why do you need the loan? How much do you need? What will you use the funds for? Create a detailed plan to answer these questions.

• Assess your eligibility.
  

  Consider your credit score, business tenure, revenue, and cash flow to determine your eligibility for different types of loans.

• Research loan options.
  

  Compare loan offers from different lenders, including New Bridge Merchant Capital, online lenders, banks, and microlenders.

• Prepare necessary documentation.

  Gather all required documents, such as a business plan, financial statements, tax returns, and personal and business bank statements.

• Complete the loan application.

  Fill out the loan application thoroughly and accurately, providing detailed information about your business, personal financial history, and the purpose of the loan. Attach or upload the required documentation.

• Review loan terms.

  If your application is approved, carefully review the loan terms, including interest rates, repayment schedule, and any fees involved. Ensure you understand all aspects of the loan before accepting it.

• Use the funds wisely.

  Once you accept the loan, use the funds for their intended purpose. Maintain a clear record of how the money is spent.

• Repay the loan on time.

  Adhere to the repayment schedule established by the lender. Timely and consistent payments help you maintain good credit and foster a positive relationship with the lender.

By following these steps, you can increase your chances of securing the funding your small business needs to grow and succeed.

Step 1: Determine Your Loan Needs

Before you start the application, determine why you need the loan and how much you require. Create a detailed plan outlining how you’ll use the funds. Also, consider your options. For significant investments or expansion projects, traditional term loans with higher borrowing limits, such as SBA loans, may be the right choice. If you require funds for day-to-day operations like payroll or unexpected expenses, flexible business lines of credit can provide the necessary financial safety net.

Keep in mind that startups may find it challenging to secure traditional business loans, but personal business loans and business credit cards can be viable alternatives.

Step 2: Assess Your Eligibility

Business loan options abound, ranging from banks to online lenders and microlenders. To determine the most suitable lender for your needs, ask yourself these key questions:

• Credit Score:

  Lenders, especially banks, prefer borrowers with good to excellent credit scores (typically 690 and above). If your credit score falls below this threshold, consider exploring online lenders or specialized loans for borrowers with less-than-perfect credit.

• Business Tenure:

  Most online lenders require at least six months to one year of business history, while banks typically seek a minimum of two years.

• Revenue:

  Lenders often set minimum annual revenue requirements, which can vary widely. If your business doesn’t meet these thresholds, consider business credit cards or SBA microloans.

• Cash Flow:

  Assess your cash flow to ensure you can comfortably manage loan repayments. Your income should be at least 1.25 times your total expenses, including the new repayment amount.

Step 3: Research New Bridge Merchant Capital’s Loan Options

New Bridge Merchant Capital offers various types of loans, and each has its own eligibility criteria and terms. Research their offerings to find the loan that best matches your needs and qualifications.

There are also other lenders to consider, including:

• Online Lenders:

  These lenders typically provide fast access to loans, with approval rates higher than traditional banks. However, APRs can range from 6% to 99%.

• Banks:

  Traditional banks often offer lower APRs but may have stringent eligibility requirements, including a minimum business tenure of two years.

• Microlenders:

  Nonprofit microlenders offer short-term loans of less than $50,000, making them suitable for startups and smaller companies with limited operating history or collateral.

Step 4: Prepare Necessary Documentation

New Bridge Merchant Capital, like most lenders, requires specific documentation during the application process. Common documents include:

• Business plan

• Financial statements

• Tax returns

• Personal and business bank statements

• Legal documents (e.g., business licenses)

• Collateral information, if required

Gather these documents in advance to streamline the application process with New Bridge Merchant Capital.

Step 5: Complete the Loan Application

Once you’ve chosen your lender, complete the loan application thoroughly and accurately. Be prepared to provide detailed information about your business, personal financial history, and the purpose of the loan. Missing or inaccurate information can lead to delays in processing your application. Remember to attach or upload the required documentation (business plan, tax returns, etc.) alongside your application. Everything must be properly labeled.

Step 6: Wait for the Decision

After submitting your application, the lender will review your financials, credit history, and business plan. This process may take some time. Be prepared to provide additional information if requested.

Here is what happens while you are waiting to hear back from New Bridge Merchant Capital or another lender of your choice: they undergo a comprehensive evaluation of your application. The lender assesses your creditworthiness, the viability of your business plan, and your ability to repay the loan. This process may involve background checks and consultations with credit bureaus.

It’s crucial to remain patient during this nerve-wracking period and avoid unnecessary follow-ups, as this can potentially slow down the process. Most lenders aim to make a well-informed decision in a reasonable timeframe.

Step 7: Review Loan Terms with New Bridge Merchant Capital

If your application is approved by New Bridge Merchant Capital, carefully review the loan terms, including interest rates, repayment schedule, and any fees involved. Ensure you understand all aspects of the loan before accepting it.

If any terms or clauses in the agreement are unclear or require further explanation, don’t hesitate to reach out to the lender for clarification.

Step 8: Accept the Loan from New Bridge Merchant Capital and Use Funds Wisely

Once you accept the loan from New Bridge Merchant Capital, use the funds for their intended purpose. Maintain a clear record of how the money is spent, as some lenders may require this information.

Step 9: Repay the Loan to New Bridge Merchant Capital

Adhere to the repayment schedule established by the lender diligently. Timely and consistent payments not only help you maintain good credit but also foster a positive relationship with the lender. It demonstrates your financial responsibility and reliability.

Apply for a Small Business Loan with NBMCNJ Today

Navigating the small business loan application process with New Bridge Merchant Capital doesn’t have to be overwhelming. By understanding your needs, researching available loan options, and preparing the necessary documentation, you can increase your chances of securing the funding your business requires. Remember to use the loan wisely and make timely repayments to support your business’s financial health and growth. If you have any questions or need guidance, don’t hesitate to call New Bridge Merchant Capital at 844-228-0593. Our experts are here to assist you in your small business financing journey.