When a company decides it would like to apply for a working capital loan, then it should follow the steps outlined below.
- Some lenders provide an opportunity to prequalify. This allows potential borrowers to share information about their financial needs, income and other details to learn what loan size, rate and repayment term they may be eligible to obtain. This process usually only necessitates a soft credit inquiry, which means there is no impact on the company’s credit rating.
- Decide how the business would like to receive its cash
- Businesses can receive funds through an upfront payment or via an as-needed basis. If the company wants to receive its funds in one lump sum, then it should target a term loan or SBA loan. However, if it would prefer to save money by only paying interest on funds as it needs them, then it should consider moving forward with a business line of credit.
- Run through the flexibility and repayment term
- Lenders can have their own repayment structure. Some financing options require monthly payments while others may require weekly or daily payments. Consider the term when selecting a lender.
- There are lenders that offer business loans that don’t contain any fees at all - e.g. no origination fee, late payment fee or prepayment penalty. That said, many lenders do have these types of fees. Businesses should be certain to include the fees when shopping for the best available terms.
- Run business and personal credit scores
- If a company has its own credit rating, lenders will evaluate both the business and personal credit scores. A business should check both scores to determine its chances of approval. It is required to have a personal FICO score of at least 550 to be eligible for a working capital loan, but a score over 660 will give a company a much better chance to get superior terms.
With Lendzero, applying for a working capital loan is easy.
Step 1: Click on the Get Approved button above and answer a few basic questions about your business. We will inform you about your best options and how many exist (this will set your expectations).
Step 2: After this is complete, you will be asked to create a username and password to begin your electronic loan application. This process normally takes about 6 – 7 minutes (if you have all your documents easily accessible and ready).
To complete the loan application, here is what you will need to have handy:
- Business TAX ID (federal tax id number, aka EIN/FEIN)
- Estimated business revenue and average bank balances
- Social security number for all applicants
- Last 3 months of business bank statements (download the PDF statements from your business bank account)
- Most recent years tax return in PDF format (all pages)
Step 3: Once the application process is complete, we will send you the completed loan application for you to review and sign. Once you have signed for your application, the process is complete. You have officially applied and started your journey to receiving pre-negotiated working capital loan funding offers. Your Lendzero funding specialist will reach out to you to guide you through the remaining steps of the process, and provide the necessary guidance and support needed with the goal of successfully obtaining the proper loan.
