Demystifying the Business Loan Approval Process

The following 18 red flags will help to maximize chances at receiving a denial of a business loan applications:

1. No Budget
2. Minimal Understanding of Your Numbers
3. Poor Credit Score or Credit References
4. Interest Rate is Your Primary Concern
5. Excessive Dependencies
6. Instability, High Variability
7. Poor Communication
8. Turnover Ratios Lengthening
9. No Skin in the Game
10. Responding Piecemeal to Financial Requests
11. Growth and Expansion That is Too Fast
12. Overall Cash Flow
13. No Management Team
14. Overly Complicated Ownership Structure
15. Tax Income is Different than Book Income
16. Slow to Provide Timely Financial Information
17. Fighting or Unrest Between Management, Partners, or Family Members
18. No Estate Plan

Although basic financial criteria must be met, overall impression, work style, and the ability for the bank and business owner to develop a trust-based relationship matter.

If you would like to speak to an attorney regarding a business matter, call our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.