Visit Our Learning Center - Understand The Process Before Borrowing

After Choosing a Lender

The Lender Calls...Answer The Phone

Make yourself available for the phone call with the lender. Being "too busy" and not taking the call will basically put the entire process on ice. Expect the phone call to come in soon after being introduced to the lender (using A Funding Place for the intro!) It's important that you do the simple process of ANSWERING the phone. Lenders are busy and you could literally lose an entire day if you ignore the phone. The call is where you will go over everything with the lender about (a) how much money you need (and why), (b) how long you have been in business, (c) your monthly revenues, (d) the overall shape of your credit (nothing private just a ballpark statement like "good" or "excellent" etc) and (e), what you need the funding for. Those questions will quickly steer the call in the direction needed to determine if you are a good fit for each other.

Completing The Application

If you both decide that it's worth moving to the next step, you will very likely be given the loan or funding application. It may be online or in print. If online, make SURE the URL starts with https:// and not http:// (https is secure, http is not.) Answer all the questions fully and truthfully (fibs don't go over well in lending) and make sure you have a copy of everything you submit. Print the screen if you must, just make sure you have a copy of everything you submit. BEFORE YOU SUBMIT, make sure you ask the lender if they are going to do a "hard or soft pull" on your credit report. Most non-bank lenders will initially do a soft pull and if all looks good it ends there, no hard pull. If your application is from a bank then you will very likely have a hard pull of your credit report. It's good to know which it will be.

Sending in Documentation

These days almost everything is done online and with that in mind you need to pay attention to security. Always (really, always) make sure the URL of the website you are submitting documentation to starts with https:// and not just http:// This is important because you will be asked to send in your financial statements, bank statements, etc and that is sensitive information. It is your responsibility to ask the lender about their privacy and security practices. Make sure you feel comfortable before submitting your paperwork online. You only get one shot at security so always pay attention to the privacy and security policies of the lender and don't submit anything if you are not sure. And always check for https:// on the URL.

Now You Wait During Review

This can be a tense time for some business owners because the "not knowing" stage can make your nervous. Just relax and know that the bank or non-bank you are dealing with wants to do business with you as much as you with them. They have procedures and policies in place and they follow them. You may get a phone call asking for some additional documentation, just give them what they need and only if you feel comfortable with the request. Non-bank lenders usually come back same-day or next-day with a firm commitment/approval while banks may come back with a conditional approval until the review team takes a look. Just follow the steps the bank or non-bank outlines and let them run this part of the show, it's all them right now.

Did You Get Approved? Congratulations!

Assuming you received an approval the next step is pretty simple. You will likely receive electronic documents to sign (via DocuSign usually, but not always) which basically shows the terms of the lending deal including the daily/weekly/monthly payment, where it is deducted from, fees, etc. Everything that matters should be in that document. READ IT OVER CAREFULLY because sometimes there are things in there that may be show-stoppers to you. Understand that if the acronym "UCC" is in the paperwork you should ask the lender for complete details as that will tie your assets up legally basically placing a lien on your assets until the loan is repaid. Some banks also issue UCC's so read your documentation carefully BEFORE signing anything. Read it twice. Consult with an attorney if you feel it is necessary.

The Funding Day

Provided that everything looked good in the funding documents, and you signed all the signature blocks, the next step is receiving the money. Your lender will ask you where you want the funds wired or if you are using a bank they may ask if you want the funds placed in your account, or if it's a line-of-credit you may be given a credit card that is ready to use. You will likely get a phone call from the person you spoke with during the process as a formality to thank you and to make sure everything went smoothly. There is nothing more to do - if the funds have arrived the process is now complete. Congratulations!

Important Note

The information above in no way covers all of the nuances of borrowing money for your business. It's a general outline of what happens before, during, and after the process. All banks and non-banks are different and each has their own set of rules, policies, and guidelines. It is your job, and your job alone to read all of their documentation carefully as we make no guarantees, warranties, assurances, promises, or otherwise that your experience will be the same as above. Remember: Always read the paperwork presented to you and hire a business attorney who can help you through the process.