Lender Secrets: How to Speed Up Your Business Loan Approval
Lender Secrets: How to Speed Up Your Business Loan Approval
One of the main reasons small business owners apply for loans from online lenders is speed. Based on McKinseyTraditionally, banks and lenders typically take 3 to 5 weeks to decide whether to finance a small business, while the average time to finance is around 3 months.
In contrast, online fintech financiers typically pre-approve in 5 minutes and can even fund in as little as 3 hours. The average time to funding with alternative financiers is 3 days. That is a difference.
While online lenders are inherently fast, there are ways to speed up your business lending process even more. In this article, we’ll look at some examples and insights from Lending Express to learn how you can speed up the process for yourself.
How does this business get money so fast?
Here is a recent example of a business owner who was successful in getting financing quickly. A Miami, Florida renovation company that applied for business funding through Lending Express in January of this year was approved for a line of credit from Fundbox within 15 minutes and received their funds in just three minutes. hours later. The business owner shared that he would use his line of credit to purchase new equipment for his business.
Here are some of the things this business owner did to get funding:
- He linked his bank account to the funding application, which provided the lender with an instant snapshot of his financial information.
- He is quick to respond to communication about his application.
- The business owner signed off on his loan offer right away.
Let’s dig deeper into how to speed up the process when you apply for a business loan:
1. Link your bank account
Instead of emailing or uploading your bank statement, when applying for funding online, you should look for an online loan marketplace or fintech that allows you to link your bank account directly to your bank account. your loan application.
This is possible when you apply for business funding through Lending Express. This is an example of “open banking,” which is a secure way to give third-party vendors or applications access to your banking data using technology. Linking your bank account is a good example of open a bank, a major trend in the financial industry that is likely to become significant in 2019.
When you apply for a business loan through a fintech company, you’ll usually have the option to securely link your bank account. For example, if you decide to apply for sponsorship with Lending Express, you can Securely link your bank account through their partnership with leading open banking API, Striped. Plaid acts as a bridge between your loan application and your bank account and is secured in the following important ways:
- Lenders on the platform receive Show me access
- Data that lenders see as information that you will share anyway, such as bank statements
- Your login details are not saved
- Data is fully encrypted
How can linking your bank account speed up your loan application process?
- Real-time data – lenders receive the latest information on the financial status of your business.
- Instant access – the second you link your bank account, the lender can see your business. There are no admin delays waiting for you to collect your data.
- A source of information – because lenders can access everything they need to evaluate your business from one source, there’s no wasted time gathering documents from different sources.
According to Jordan Ruas, Director of Sales at Lending Express, “33% of our customers in the US have linked their bank accounts to their loan applications,” as of January 2019.
“This results in a faster process for them and more accurate loan offers,” says Ruas. “We expect this number to grow.”
2. Instant feedback
Has a lot of potential benefits of digital lending. One of them is that you’ll often be notified as soon as you unlock a funding opportunity, so the quicker you respond and request offers, the quicker you’ll get your money back.
Lending Express cannot guarantee all digital lending institutions or platforms, but when applying for a business loan with the company, as soon as you request your loan offer, the lender will contact you for final approval and may request documentation (if necessary) within 24 hours. You will be notified via email that the lender or lenders will call you and also request documentation, if applicable.
No matter where you apply for funding, always be on the lookout for emails or calls from your lender. Remember to answer your phone and open their email, so you don’t miss any important information about your loan application.
3. Complete your application form correctly
There are really two parts to this point:
first. Complete your loan application
2. Okay exactly
If you do not answer every question requested, your funding may be delayed.
If you answer incorrectly or are dishonest, your funding may be delayed.
“A common problem we see over and over again is businesses not reporting their previous convictions, lawsuits or bankruptcy in their loan applications,” says Ruas. “Another issue that slows down this process is when someone claims to be a business owner, but it turns out they are not and are filing on behalf of someone else.”
This non-disclosure always annoys applicants by delaying their application process, as the lender can find this information anyway during application completion and during audits. credit check.
“Years of experience working with more than 110,000 business owners at Lending Express have taught us that being honest in your application is the best way to speed up your business lending process,” says Ruas. “The only way to get the best loan possible is if you are completely transparent about any issue.”
Common items about a business owner applying for a loan that might be enticed to conceal include:
- Default on previous loans or debts
- All loans available
- Low credit score or thin credit record
“If you get it right the first time,” explains Ruas, “there’s no going back and forth, wasting your and your lender’s time.”
All in all, transparency and communication are key. Simply being open and specific about what you want from your lender can speed progress. The same goes for lenders or finance companies. For any relationship to work, communication needs to be a two-way street.
While you can potentially get your business loan in days or even hours if you apply online, you can still speed it up even more by following these steps.
This guest post was contributed by Lending Express’s Nici Pellimer.
Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This document has been prepared for informational purposes only, is not intended to provide, and should not be relied upon as tax, legal or accounting advice. You should consult with tax, legal and accounting advisors before engaging in any transaction. Please consult a tax professional for information on tax laws and how they apply to your business.