How to Apply for a Personal or Business Loan

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No Credit Car Loans
Do you have no credit? Do you think getting approved for a car loan with no credit is not possible? Wrong! One of the best means of building a no credit history into a positive one is to apply for a car loan!

How can I get approved for a car loan with no credit history? It is not hard at all to get approved for auto loans with no credit. When you apply for a car loan with Premier Auto ... Read loans article



Why To Consolidate Student Loans
What is it?

When you consolidate student loans, you bundle all federal student loans that you receive to finance your college education into one. When a new loan is issued, the lender pays off the outstanding balances of the loans you consolidate. In short, it is a practical repayment management option for students.

Why Consolidate Student Loans?

People consolidate... Read loans article



How to Apply for a Personal or Business Loan
The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.

With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.

The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.

It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.

The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.

In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.

If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.

On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.

If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.

Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.

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Hard Money Lenders - What Do They Offer

What is a hard money lender? I have heard the term in internet advertisements and by word of mouth, but was not really sure what they were or how they work. I looked into it a little bit and found that they are actually just private individuals with a little extra money that they make available for investment. They will lend the money they have to real estate investors. The loan is usually short term and is generally used by the real estate investors to buy and repair certain properties.

So where does the name "hard money lender" come from then? The term is a common one used in the financial world. Soft money is money that has easy terms and a flexible payment schedule. Hard money, on the other hand, has stricter terms to it and the repayment schedule is rigid and completely outlined by the loaner. With private financing, the hard money term becomes even more harsh. The terms of a hard money lender are usually very strict and rigid.

Those rigid terms will likely vary from hard money lender to hard money lender. They will also likely be affected by experience of the investor requesting. However, there are some typical terms for hard money lenders. Usually the loan will be for around half to three quarters of the value of the home, post-repairs. The period is usually somewhere between 6 ad 60 months and will charge you 2-10 points on the loan as well. Again, though, there are going to be variations from lender to lender.

Hard money lenders are actually a great resource for you if you want to go into real estate investments. There are a couple of reasons. First of all, they give you money on hand so that you can make a purchase as soon as your offer is accepted. In some cases, these lenders will even lend you closing cost money. In addition, they are people, not institutions. You can talk to them on a personal level and build trust with them, which makes it something you can really work with. You will be able to laugh with, talk with, and even befriend your lender if you go the hard money lender route. Keep that in mind as you enter the field, but never forget that you do have a business relationship and that a lot of money can often times be at stake.

Though not always easy to find because of their private nature, hard money lenders can be a great resource for real estate investors. They offer quick money without all of the hassle of larger institutions. However, you must also be aware that terms and conditions of hard money lenders have little flexibility and are often tough. Because of that, you must make sure you establish a solid relationship and reputation with any hard money lenders you choose to work through. However, find the right one and you will have money available to you to make your real estate investment experience a successful one.

If you would like to view more of my personal articles on lending, please visit my finance site.


Top rated articles for loans

1. Why To Consolidate Student Loans
What is it?

When you consolidate student loans, you bundle all federal student loans that you receive to finance your college education into one. When a new loan is issued, the lender pays ... Read loans article

2. How to Apply for a Personal or Business Loan
The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that busine... Read loans article

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1. Why To Consolidate Student Loans
2. How to Apply for a Personal or Business Loan
3. New Home Construction Loans
4. Bad Credit Secured Loans - The Complete Guide
5. Buying a New Car - Should You Finance Through a Dealership
6. Online Payday Loans Website - Bad Credit Is Not A Problem
7. Student Guidelines for Recovery When You Cant Pay Your Loan
8. Bridging Loan
9. Payday Loans Advantages and Disadvantages
10. Home Loans For Buyers With Good Or Bad Credit

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How to Apply for a Personal or Business Loan
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