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3 Useful Tips For Small Business Owners Looking for a Loan

By: Mathias Grez

Looking for and securing a small business loan can be a very difficult task if you’re not prepared for it. As Senior Associate of Partnership Sales here at Herio, I’ve seen what it takes for borrowers to go through this process smoothly – and the ways it can go badly. As long as you know going in what a lending institution looks for in a potential customer, you’ll have no problem submitting a great, approvable application.

Here are some tips to help you get the loan with complete ease:

  1. Tell your story
    Lenders want to help small businesses that have the highest probability of paying them back without a problem. Customers who come to us with a clear  purpose for the funds they’re requesting (“I am buying inventory for my busy season”) are more likely to be funded than those who give a vague response when asked (“I need working capital to pay some bills”).
  1. Put yourself in the lender’s shoes
    Getting a loan is just like going on a first date or an important job interview: first impressions are important. While our loan decisions are guided by Herio Insight, a proprietary algorithm that takes thousands of data points into consideration, numbers are only a small part of the overall picture. We pride ourselves on the human insight we bring to our work; our underwriters take into account personal, less quantifiable information when assessing a prospective borrower’s loan worthiness. If we don’t feel good about the impression an applicant gives us, we are more  likely to pass on the deal.Make sure you have your paperwork in order and that you don’t leave any important information outside of the application. Though lenders are very resourceful and can find ways to fill in the blanks on their own, it reflects well on you if your application is 100% complete – and it’ll speed up the approval process as a bonus.
  1. Consider using a brokerI know what you’re thinking: why should I pay a broker if I can find a lender myself?  Just like the real estate market, brokers can play a very important role in getting you the best deal. With the proper vetting, a broker can be a powerful ally while finding the best funding option for your business.A broker can guide you through the approval process, bringing your application to the partner they think best fits your needs. Their relationships are an undeniable asset in your search for funding. Finally, brokers know what every lender is looking for on a granular level (i.e., credit score, favorable industries, revenue) and they can save you a lot of time, money, and stress.Worried about fees? Most brokers receive compensation directly from the lenders, eliminating the potential burden of a finder’s fee on the borrower (just make sure to discuss any fees or rates with them up front).

Securing a small business loan is easily achievable for any responsible merchant looking to grow their business. All it takes is the right mindset and a bit of preparation.

Mathias Grez is a Senior Associate of Partnership Sales.

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