What does the loan application process involve?
Applying for any loan involves three general phases. First, the applicant will take the time to collect and submit the information requested on the application form.
When the lender receives this data, they will perform initial background checks and decide whether the application is worth pursuing.
If the application looks good, the lender will then request additional information along with an in-person meeting. During this stage, both parties will do further research to check for unusual risks or a mismatch in lending priorities.
Finally, if the lender believes the loan is a good investment, they will make an offer that includes a loan amount and repayment terms. At this point, the applicant can choose to accept or decline the offer.
What are the benefits of online business loan application forms?
Using an online business loan application form as the first step of the application process provides a number of benefits for lenders.
These online forms give lenders the opportunity to collect relevant applicant information and documentation in one place. This process helps them filter potential clients upfront without wasting time and lower costs by reducing the need to print and store paper.
Meanwhile, they can transfer information into databases easily and reduce time and effort spent creating new forms.
Any financial institution that plans to offer business loan services will need to collect applicant information. Using custom online business loan application forms is the simplest way to do so.
What should a business loan application form include?
Loan application forms gather the basic information lenders need to judge whether a business loan applicant is a good fit. The information lenders use includes:
- Applicant contact information: The applicant’s name, address, phone number, email address, and any other information the lender may need.
- The amount of the loan: How much money the business wants to borrow.
- The reason for the loan: What the applicant will use the loan for, such as new equipment.
- A description of the business and its history: What the business does, how it functions, and any relevant events in its history.
- The management team for the business and their responsibilities: The names of the senior decision-makers in the company and their roles.
- The business’s financial history: Revenue, expenses, and cash flow the business has seen in the past.
- The financial projections demonstrating how the loan will be paid off: The company’s plan for paying off the loan while still covering other expenses.
- Any collateral for the loan: Property the business may use to secure the loan, like buildings or equipment.
- A signature field to ensure that the application is legally sound: The business owner’s signature, confirming the application is complete and honest.
SBA (Small Business Administration) loan applications may also collect the personal financial information of the business owner and a personal guarantee by the business owner.
Is a business loan application form the same as a commercial loan application form?
There are several types of business loans, one of which is a commercial loan. Any loan to a company is considered a business loan, but there are several types of loans that businesses can be offered.
There are two main categories of business loans: commercial loans and SBA loans. An SBA loan is backed in part by the federal government.
Lenders offering SBA loans face less risk because the government has guaranteed that they will receive a certain amount back no matter what.
On the other hand, a commercial loan is not backed by the government. Businesses do not need to meet SBA requirements to get a commercial loan. Still, they will face stricter terms and eligibility requirements from the lender.
What is a business loan application form?
Business loan application forms are documents used by lenders, such as banks and credit unions, to collect information from potential loan applicants.
An interested business will fill out the form with information related to their request and submit it to the lender.
Lending organizations can then use that information to screen potential loan candidates and begin a more extensive application process.
What is a business loan application form used for?
Companies often use loans to cover the cost of new equipment or large projects instead of draining their cash reserves. Business loans are specifically designed to help businesses achieve their objectives while keeping cash on hand.
When companies decide to pursue a loan, they use a business loan application to connect with lenders.
Each lending institution will post its own loan application form, collecting the information needed to judge the creditworthiness of business loan applicants.
Should you use a template to create a business loan application form?
If your organization regularly issues business loan application forms, you will likely benefit from using a template.
Whenever you need to create a new document, you can use a template to guarantee you’ve included all the essential sections while maintaining robust legal language.
By removing the need to create new forms from scratch, you save time, effort, and money.
Download the free template from PandaDoc to get started. It’s fully customizable, free, and can serve as the basis for your business loan forms going forward.
What are the documents required for a business loan?
Generally speaking, to get a business loan you’ll need the following documents: credit report, income statement, tax returns, bank account statements, business plan, business licenses, and proof of address. Check specific requirements with your lender, as you might also need additional sets of documents to obtain a business loan.
How do I write an application for a business loan?
A business loan application should include details such as your name, mobile phone number, address, business plan, and a short description of why you need the loan. Also make sure to carry other important documents such as income statements, credit reports, etc., when applying for a loan.