How to Get Approved for A Business Loan Through Smartphone?

Applying for a business loan can seem daunting, but it doesn’t have to be! With some preparation and know-how, you can position yourself to get approved and get the financing you need to start or grow your business.

How to Get Approved for A Business Loan Through Smartphone?

In this guide, I’ll walk you through the entire process of applying for a small business loan from start to finish using your personal computer or smartphone.

Determine Your Financing Needs

Before applying for a loan, you need to have a clear idea of why you need the money and how much you need to borrow. Consider questions like:

• What will the loan be used for? Some common uses are:
  • Buying equipment
  • Funding working capital/operating expenses
  • Expanding facilities
  • Hiring employees
  • Marketing your business
  • Refinancing existing debt
• How much money do you need to borrow? Calculate the exact amount you need to fund your business goals right now and some extra to cover unexpected expenses. Most lenders will want to see that you’ve thoroughly estimated costs.
• What loan type makes sense? Loans come in different forms like term loans, SBA loans, lines of credit, and more. Each has pros and cons.

Doing this upfront analysis will help you determine the best lending options and loan amounts to cover your business needs.

Improve Your Eligibility to Apply for Business Loan:

To get approved, lenders need to see that your business can repay the loan. They’ll review factors like your personal and business finances, credit scores, collateral, and experience in your industry. Here are some tips for making your application as strong as possible:

Personal Finances

• Have a good personal credit score of over 700. Mistakes can drag down your score so check your credit reports and resolve any errors. If your score is lower, take steps to responsibly improve it prior to applying.
• Manage personal debt wisely by paying balances on time and keeping balances low compared to limits. High personal debt raises red flags with lenders.

Business Finances

• Build a strong business credit score by responsibly managing business accounts and lines of credit over time. New businesses can request credit builder accounts to start establishing a good business credit history.
• Show profitable financial performance for your business over time with consistent sales and revenue. Unprofitable businesses are riskier to lend to. If your business is new or losing money currently, be prepared to explain why it’s positioned for profitability with additional financing.
• Have an Emergency Fund with several months of operating expenses saved as a buffer just in case. These savings demonstrate good financial management practices.

Collateral

• Prepare valuable business assets like equipment, real estate, or savings that you can pledge as collateral to secure the loan if required. Not all loans require collateral, but being willing and able to put it up helps demonstrate you are invested in your business’ success. The stronger the collateral, the more it offsets lenders’ risk.

Industry Experience

• Highlight your business and management experience in your industry with specific achievements. More capable, seasoned business owners are seen as better bets for loan repayment. Formal education credentials related to business or your sector also help showcase your expertise.

By shoring up eligibility factors in advance, you’ll stand the best chance of loan approval.

Choose Lending Partners

With the background work done, it’s time to look at potential lending partners to fund your loan. Compare multiple lenders by researching online or asking for referrals from your local Small Business Association chapter or business network contacts.

Assess lenders based on:

• Types of small business loans offered.
• Loan amounts are typically funded.
• Rates and fees charged.
• Collateral requirements.
• Approval rates and funding speed.
• Customer service and application experience.

Once you’ve identified several promising options, you can narrow down the list by getting loan pre-approvals prior to formally applying.

Pre-approvals allow you to confirm likely eligibility, loan terms, and document requirements before having hard credit checks run which can temporarily lower your credit score.

Compile Application Documentation

To give your application the best possible chance for approval, meticulously gather the required documents and financial records related to your business. Common items requested include:

Personal Records

• Recent tax returns.
• W-2s and pay stubs.
• Bank account statements.
• Retirement and investment account statements.
• Mention of other personal assets like homes or vehicles.

Business Records

• Business plan and summary.
• Business formation documents like articles of incorporation.
• Several years of business tax returns.
• Recent profit and loss statements.
• Balance sheet.
• Accounts receivable/payable aging reports.
• Bank statements and canceled checks.
• Collateral details (if applicable) like property appraisals or equipment invoices.
• Existing commercial lease agreements (if applicable).

Having organized, high-quality copies of these documents handy to submit or reference will speed the application assessment process along.

Submit Your Loan Application Through Smartphone or Laptop:

With your materials ready for review, it’s time to formally submit your loan request! Here’s a high-level overview of what to expect when going through the loan application process online or via smartphone:

1. Access your lender’s loan application online, either by requesting a link or logging into your account portal on their website. Applications can also be done using lenders’ smartphone apps downloaded from the Apple App Store (iOS devices) or Google Play Store (Android devices).
2. Answer preliminary questions about the type and amount of financing you need. You’ll share basic details about the intended loan purpose, ideal loan terms, business information, etc. to kick things off.
3. Input personal identification, contact, and background information required for credit checks and identification verification to be run. Fields will vary but expect items like your Social Security Number, birth date, phone number, email, home address, employer details, education credentials, and citizenship/immigration status if applicable.
4. Provide requested information and documentation related to your business’ finances and operations. You will likely need to submit tax paperwork, bank statements, collateral details, lease agreements, business formation documents, business plans/summaries, ownership structure breakdowns, customer details, supplier lists, etc. Documents are typically uploaded right to the application portal or via a smartphone camera.
5. List out personal assets and liabilities, including properties, vehicles, retirement accounts, expenses, incomes, credit lines, credit scores, investments, insurance policies, and anything else relevant to judging your financial position. Supporting statements and records will be required.
6. Carefully review loan terms and disclosures before electronically signing and dating applications. This legal agreement outlines items like fees, rate details, payment schedules, events triggering a default, lender rights in a default scenario, and other critical loan particulars. Know what you are getting into before proceeding!
7. Formally submit the finished application digitally to send to the lender for their underwriting review and approval decision.

And you’re done! The lending team will generally follow up within 1-3 weeks with loan decision updates or requests for supplemental materials. The more responsive you can be in providing additional details, the quicker turnaround times tend to be on final credit adjudication.

Following this process correctly positions you for the highest potential loan approval – allowing you to get access to the financing your business goals require. With money in hand, you can look forward to executing your plans to drive growth and success. Best of luck as you look to secure funding – your business future starts now!

Overcoming Common Loan Application Pitfalls

While the small business loan application process may seem straightforward on the surface, many entrepreneurs trip up on avoiding key mistakes. Being aware of these common pitfalls can help you steer clear of them:

Providing Incomplete Information

In a rush or find some documents tedious to locate? It’s tempting to submit applications with missing pieces simply to get it done. Don’t give in! Having to continually backtrack to supply more information drags out the underwriting timeline and can frustrate lending officers.

• Tip: Use the lender’s application checklist religiously to ensure no loose ends. Better to submit a fully complete application later than a partial one sooner.

Submitting Outdated or Inaccurate Data

In hopes of looking better “on paper”, some business owners fudge numbers or include older documents that don’t reflect current realities. Seems harmless but underwriters will catch this! Providing inaccurate estimations or outdated paperwork undermines credibility and trust built through the application process.

• Tip: Be transparent with current figures and context. Most lenders are interested in full honesty more than perfect profit sheets. Explain changes clearly without inflating or hiding anything.

Making Frequent Credit Inquiries

It’s wise to shop lenders against each other to find the best rates and terms. But each inquiry made where your credit is checked dings your personal score a bit. Too many in a short timeframe raises concerns.

• Tip: Comparison shop early using pre-approvals rather than hard application credit checks. This allows you to bench lenders without accumulating multiple inquiries until you are ready to formally apply with your top choice.

Providing Disorganized Applications

With so many moving pieces, application documents and figures can quickly become scattered chaos. Unorganized, scattered applications reflect poorly on a business’s operations. Frustrated loan officers are unlikely to go the extra mile for a messy applicant.

• Tip: Invest time compiling requested items into neatly organized, clearly labeled digital folders by category. Make accessing any specific document or report easy for reviewers. Table of contents sheets help too for quick navigation.

Lacking Experienced Support

Navigating the loan process for the first time without guidance can quickly lead you down the wrong path. Seeking wisdom from an accountant, lawyer, fellow business owner who has secured financing before, or consultant can pay huge dividends.

• Tip: Identify professionals in your network to review your application plan. Their expertise can spot gaps and provide course corrections before submitting. Worth every penny for the experience!

Avoiding these common missteps will set you on the smoothest path toward getting funding approved. Let me know if you have any other application questions that arise along the way!

Deciphering Loan Denials and Next Steps

Despite your best efforts, there is always the chance your loan application gets rejected. Don’t panic! Denials don’t necessarily mean you won’t get funded. Understanding WHY you were denied allows you to address concerns and better your chances of reapplications or alternative financing options.

• Unpacking Common Denial Reasons

Some top reasons lenders cite for small business loan denials include:

• Insufficient Credit/Income

If your personal or business credit score is quite low, it raises default risk red flags making approval hard without a flawless application otherwise. Limited personal income or questionable business profit strength also falls in this critical category of not meeting minimum eligibility requirements.

• Limited Operating History

Startups and younger businesses often lack enough solid years of financial reports and tax returns for robust, reliable analysis – especially in higher-risk industries like restaurants or retail. And during recessions, even stable companies can look riskier. Applicants are expected to produce complete documentation.

• Excessive Existing Debt

Carrying sizeable current personal credit card balances, large outstanding business lines of credit, or hefty previous loan payments to earnings ratios all make underwriters nervous. Even with more collateral, high existing debt obligations reduce the appeal of taking on additional lending risk.

• Insufficient Collateral

Certain loan programs require hard assets like property, equipment, investments, or inventory to be pledged to secure the borrowed amount. If appraisals reveal that pledged collateral doesn’t adequately cover balances due, lenders may pass until security shortfalls are addressed.

• Infeasible Projections or Planning Gaps

Overly aggressive forecasts around uncertain business ventures generally raise eyebrows, even with promising markets. Similarly, sloppy financial records or gaps within operational plans signal underpreparedness. Savvy underwriters probe to assess business model validity and applicant capabilities before approving loans.

• Clear Rationales Bring Progress

While rejection explanations can range widely in detail levels, press lenders to expand on their communicated reasons before resubmitting. Even a simple “Limited or unacceptable credit history” denial code gives you something specific to start troubleshooting.

• Refine Retry Strategy

With denial specifics clarified, develop a game plan for strengthening your application then reapply:

• Boost personal/business credit scores.
• Build cash reserves.
• Increase revenue/profits.
• Secure a cosigner or investors.
• Add more collateral.
• Revise forecasts or plans.
• Change loan purpose or amount.

Persistence coupled with learning pays off. Each attempt brings you closer to getting that critical small business funding approval! Feel free to reach out if you want to brainstorm strategies for overcoming your unique denial situation.

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Conclusion: 

Getting approved for a small business loan can transform your entrepreneurial aspirations into reality. Yet securing financing is no simple task, requiring diligent preparation and persistence through the application process.

By following the step-by-step guidance outlined here, you can significantly increase your odds of getting your loan approved.

The keys are:

• 1) Clearly defining your funding needs and strengthening personal/business financials to improve eligibility,
• 2) Thoroughly assessing multiple lender options to find your best fit,
• 3) Meticulously compiling a complete set of organized application documents, and
• 4) Carefully reviewing all loan terms before signing your agreement. Mistakes happen, but avoiding common application pitfalls around incomplete data, poor planning, and disorganization will serve you well.

Even with excellent execution, loan denials can still occur for reasons like insufficient credit/income, limited operating history, excessive existing debt, inadequate collateral, or unrealistic projections.

Rather than giving up hope, dig into communicated denial rationales then refine your approach to address lender concerns for improved outcomes when reapplying. Enlisting experienced mentors to review your application offers a valuable troubleshooting perspective.

Navigating loans for your small business demands dedication through ups and downs. But funding provides the foundation for achieving your entrepreneurial dreams. Simplify success by methodically checking all boxes using the application best practices covered here. 

Faithfully work through each step, seek wisdom along the way, and persevere through obstacles. Before you know it, you could be holding loan approval allowing exciting new business growth horizons to unfold! You’ve got this.

Now boldly invest in building the robust enterprise just waiting to flourish on the other side of secured financing. The journey awaits.