Posts tagged: commercial business loans

Spot Factoring Requirements

If you haven’t borrowed financial resources for your business, then better read up. Unlike personal, home or car loans, spot factoring have a thing or two unique to them specifically on the spot factoring requirements.

1. Financial capability to pay corporately and personally.

commercial business loansBanks and other financial institutions will not lend you anything not even a cent if they can ascertain that you have the inability to pay what you will borrow. Financing is still a business after all. Besides as businessmen you avoid extending credit to your customers who may not be able to pay you in the future. The same goes with commercial business loan providers. They will check on your company’s current financial standing. They will ascertain how much assets you have to be used as collateral. This can even extend up to your personal assets.

2. A good current and previous credit score.

They will also look into whether or not you have other borrowings at present. At the same time, they will inquire regarding your previous loans, how timely you pay them and whether you actually pay for your dues.

3. Up to date, timely and accurate financial statements.

Yes, your financial statements are another requirement. Banks may ask you to submit quarterly, semi-annual or annual income statements, balance sheets, cash flows and all that. There are others who specify in their terms that your business must have a positive cash flow or that the ratio of your profit versus your expenses be at a certain number. Depending on the amount of your loan, the terms, your industry and other related factors, this requirement can vary.

4. Reliable and organized documentation.

Some lenders require you to initially submit three to five years of income tax returns and financial statements. Other corporate documents may be required. Even the personal financial records of the company’s owners may even be asked. At the same time, other forms of documentation will be required of you. This makes it a must that you maintain a safe and reliable file of all your transactions. Preservation is a must so go and do it. Even if you are not getting a loan, such is still required and mandated by law.

5. The patience to wait.

Commercial business loans with all its requirements, those not in this list included, can take quite some time before it gets you the funds that you need. This makes it a must that you plan things beforehand so that everything falls into schedule. Otherwise, you might as well consider other financing methods.

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