Blog

Success in business happens neither overnight, nor by accident. It takes your unique ideas and dedication to your business. Business loans can help jumpstart new businesses, or help existing businesses grow and expand. If you are new to commercial lending, you will find that the process differs from personal lending. Here’s what to expect before diving into the loan application process.

Understanding the Purpose of Business Loans

Business loans help organizations move forward. The first step is to find a commercial lender. A commercial lender will want to understand the vision behind the loan, and how it will contribute to growth. This is a different process than home or auto loans, which focus more on credit ratings and ability to repay. Some common growth-based reasons for business loans include:

• Purchasing new equipment or vehicles that help expand production
• Buying commercial real estate for new business locations and/or to save in rent costs
• Using lines of credit for short-term working capital, such as inventory purchases

Preparing for a Business Loan

Taking a few steps upfront can make the loan application process easier and more efficient.

New Businesses: A business plan is key for new business loans. An outline of business strategy, target market, operations, and financial projections will help the lender assess the viability of a new loan.

Established Businesses: An established business can speed up the loan process by getting its documentation in order. Gather financial statements, tax returns, and personal credit history. It is also important to spell out reasons for the loan, and the expected benefits and financial projections the loan can provide.

Getting Support for a Business Loan

There are resources across the community to help businesses manage plans and projections.

Community Resources: SCORE offers free mentorship, guidance, and advice to small businesses, and can help with business plans and growth projections. Their mentors are experienced subject matter experts who volunteer their time and talent.

Lender Resources: Commercial lenders can guide businesses through the process and help them gather the right information. The right lender will work to develop a comprehensive solution fit for your specific business.

Ongoing Resources: Business loans are not “one and done” and are meant for ongoing operations. Choose a loan provider that is committed to working with businesses before, during, and after the loan application process.

Park Bank is a relationship-based bank. Our business services team helps clients with day-to-day management, and our commercial lending team takes a partnership approach to working with business loan clients. We’re happy to answer any questions about business loans and commercial banking. Reach out to our Business Team today!