Understand How Long Is the Business Loan Application Process

If you have been wondering how long is the business loan application process, it can be a long and drawn out procedure. The longer you take to find a lender, the less likely you are to get the loan you need. Besides, getting the money, you need when you need it can be not very easy. So, while some lenders can help speed up the process, many of them will try to get you to sign something before they can do anything for you.

One way to start a business is by obtaining a business loan. Option for startup business loans with bad credit is also available. You can use this loan to purchase all of the materials and equipment that you need to start your business. This includes things like office furniture, supplies, computer software, and more. You can also get the loan for a startup costs. If you are going to be using a franchise, they can get you a business loan for as little as $500.

Payday Loan Concept

But, you should not apply for the loan until you have a plan for what you are going to do with the money you get.For instance, applicants need to gather all the required certifications and documentation, then meet up with lenders to hand over the said documentation. Once this process is done, files are going to be taken over by specific departments, the duty of who is to verify the veracity of the statements in the papers, and this can take a lot of time. And still, applicants may be required to file and complete some other documents, then wait for these documents to be verified too, then finally ready for the closure. 

It is a long process that, to be done correctly and perfectly has to requires time. Of course, the more accurate an applicant is with his statements and certifications, the less the approval may take in terms of time.

CHOOSING THE RIGHT LENDER IS ESSENTIAL

Despite what has just been said, and always considering how typically long the process of approval and lending of a loan is universal, there is not a determined unlimited length of time, as it changes depending on the lender itself. 

There are three best options for an applicant to choose in a matter of what lender to go to for applying to a loan: 

  • Traditional banks, which generally take up to three months before delivering the approval of the loan and, then, the loan itself;
  • Small Business Administration (SBA), which has similar times: you could have to wait for two months, but it could also take up to three months in this case;
  • Alternative and Online business lenders, which probably are the fastest ones, take three to at least five business days for the application to be reviewed, approved, and for the loan to be lent. It’s obvious, although the timing could sound perfect, we are always talking about higher interest rate loans, so it’s best to take the alternative and online business into consideration when there is the need for a loan to arrive quickly.

REASONS FOR SMALL LOAN APPROVAL PERIOD

Of course, the length of time a lender requires to approve the loan should not take more than three months. Depending on the reason for the loan application, waiting more than said time could cause some business owners to inevitably face problems such as missing opportunities, delaying payments, be unable to expand their company at the right, proficient time. 

In applying for a loan, it is always vital to take care of every little aspect and reason for it, so that the applicant can make the right decision regarding which lender to turn to. 

OTHER INFLUENCING FACTORS

Although it’s mostly the lender that makes the difference, that is not the only factor influencing the length of time in which a business loan will be approved and handed over. 

For instance, the type of business loan a suitor is applying for also is essential to determine how long it will take for it to be delivered. Usually, if an applicant is asking for a business loan for his small business company, he may need instant funds. 

Therefore, his best option will probably be the one approaching an alternative lender to see what alternative fast loans offer he may have. 

MORE INFLUENCING FACTORS

The information that the suitor provides is also a vital aspect in the length of time the process requires to be completed: for the process to be faster, the applicant must speed up his work of delivery of the required certifications: the quicker the documentation arrives, the sooner the process can be completed. 

Having all of the information checked out before handing them over is also a good thing to do to speed the process up: if an applicant makes sure the statements in his files are as accurate as possible, then the checking procedures can take away much less time than they usually do. 

Obviously, checking them himself does not count as complete checking: specific departments will have to run validation and cross-checked tests anyways so that they can be sure everything is okay. 

But, handing over an incomplete document, or a non-checked, therefore misspelled or wrongly made certification will lead to a delay in the entire process. 

So always check your paper!

INFLUENCING FACTORS CONTINUES!

Let’s also consider that the amount of time the process takes can very much be influenced by the actual, real efficiency of the lender himself: the way the channels work and connect, the number of files they have to work on, the number of applications that are waiting to be taken in the examination are essential aspects to take into account. 

Lastly, the weight of the loan is essential to determine how much it is going to take for a lender to approve it: the lighter the loan requested will be, the shorter the time for its approval will be as well. 

It can be concluded that though it might take a certain time for a business loan application to be processed, the duration can be drastically reduced by taking some personal steps and methods. And it is quite essential to consider all the above factors and take it into consideration to make the Loan granting duration shorter.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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