Today the possibilities to apply for small business loans for auto shop business financing are numerous: from state and local economic-development agencies to a number of various non-profit organizations. But regardless of the type of lender you choose for your auto shop business, you still need to be very well prepared for the application process to ensure that you receive the required financing right from the first time. In this article we tried to combine all the basic information about the whole small business loans application process as well as listed the main documents required.
Loan Application Form
When you apply for small business loans for auto shop business financing, all lenders are likely require you to provide pretty much the same information, however the form itself may vary. Be ready to answer the questions below:
- The reason for applying for small business loans
- How will your loan proceeds be used?
- Describe your assets to be purchased and also your suppliers
- Explain what business debt you already have (if any) and who your current lender is
- Personal Background
Be ready to describe your personal info, including previous names, addresses, criminal record details, education, etc.
Sometimes you might be asked to provide a resume, so it is better to have it in advance. It should include information about evidence of management or business experience, especially for small business loans used to start a business.
- Business Plan
You will always need to show a sound business plan. In the business plan small business loans experts advise to include complete set of projected financial statements, do not hide your losses but explain them, your cash flow and balance sheet.
- Business Credit Report
If you already have a business then be ready to show your credit report. Make sure that you have both your personal and business credit reports.
- Income Tax Returns
Most lenders of small business loans require business owners to submit their personal and business income tax returns for the three years.
- Financial Statements
A lot of current loan programs require small business owners to have more than a 20 percent stake in the business in order to submit their signed personal financial statements. Some lenders in the field of Auto Shop Business Financing also require projected financial statements which can also be a part of the business plan. It is not an obligatory thing to have, but highly advised to have it with you when applying.
- Accounts Receivable and Accounts Payable
You will also have to show your current financial position. So before you head to the lender’s office, make sure to have accounts receivable and payable.
This part varies significantly from lender to lender. Some loans programs do not even require any collateral. If you are applying for small business loans and you are of higher risk to lenders, then you will have to have substantial collateral. With strong business plans and financial statements you can avoid putting up collateral. Anyway, be ready for it in case it happens.
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