If you have your own entity or represent one, it is not a secret for you that every business demands a certain amount of investments and money to exist. Sometimes your company may have trouble, and you can find yourself in a position where you cannot keep working because you have no money and ability to render services, produce items you sell, pay to your staff, and so on. Even if the sum you seek is tiny, the consequences of not getting it may be dramatic.
In some situations, a credit issued to your business may help quickly. To request the credit, you should find a financial institution (a foundation or any other organization) that may help and create your own Business Credit Application. In this form, you will briefly tell about yourself, your entity, its bank accounts and existing loans (if it has any), and references that can provide additional info about your entity.
Highly likely, without such an application, your request will not be considered. Apart from the information that we have described, you might need to outline more. Scroll down to check the filling-out guidelines and some more hints on the topic.
The template consists of only one sheet, and this sheet is divided into four blocks a businessperson has to complete. They are a no-brainer: you will not have to provide anything extraordinary, just basic info on yourself, your entity, and your accounts.
However, if you feel unconfident about any of the form’s lines or have any questions and concerns, we strongly recommend asking for the help of your entity’s accountant or any other financial expert. It is much better to ask in advance and avoid mistakes than not to get credit because you have made something wrong.
We not only describe the template but also provide it. Our smart form-building software that generates almost all kinds of legal forms can issue the fillable Business Credit Application to you in seconds. Try it to make the procedure much easier.
Apart from the form itself, we suggest you read our instructions that tell how to complete each block. See the guide below.
The first block is about you and your basic data. You must enter your full name (last, then first, and middle initial), title, tax ID number. Then, write the details about the business you represent (or own): its name, address (with the city, state, and postal code), and the business’s valid phone number.
You have to tell more about the business for which you claim the credit. In the second block, you have to provide the business’s type and year when the entity was founded. Below, mark the box describing the business’s legal form (corporation, partnership, and so on).
If you represent a division or a subsidiary company, insert info about its parent company and indicate the foundation year as well.
Introduce the entity principal responsible for business operations and transactions. Add this person’s name, title, full address, and phone number. You can include two such people in this form. Then, move to the following block.
The next step is to include details about your bank references in the form. You should define the banks (or other financial institutions) responsible for your checking account, savings account, and loans.
Start with the checking account. Enter the bank’s or institution’s name, checking account number, address, and phone number.
In the middle, add the same items for the institution where your entity has a savings account. If it is the same place, duplicate the details you have written in the first column.
On the right, you have to introduce the bank or institution where your entity has the home equity loan (if any). Indicate the loan balance and give the same details about the bank (its name, address, and phone number).
The form’s fourth block is for adding your entity’s trade references. These references are other entities from which you purchase items and pay for services that help your business. Such entities can give you a certain credit and prolong it, but only if you are a trustworthy company, of course.
You can add up to three references in the template. Each reference requires providing the company name, contact person’s name, business’s address and phone number, the date when your entity’s account was opened, the credit limit, and current balance.
You should confirm that everything inserted in the template is true. You can do it by signing the document below all blocks on the left-hand side and writing the current date on the right.
As you may see, the template we have just described is very brief. Sometimes you will need to provide much more details (your business’s financial results, statistics about your customers, and other things).
You can still use this template to make the basis of your application and complement it with all the demanded details. For instance, you might be asked for an application with more info in case your company is new on the market, or you try lending a significant sum.
Among additional details you can insert to the template are financial results and ratios, profitability proof, cash flow statement, details about your debts, and other informative items. In many cases, the organization where you apply for credit can tell what data you need to provide.
We have developed a set of hints you can use when requesting credit for your entity. They are simple but can still be extremely helpful.
Prepare additional details
Yes, those we have just mentioned above. Sometimes a brief application, even if you were asked for it, is not enough, and you can have an interview where you will need to tell more. So, we suggest you gather financial details and prepare answers to all possible questions in advance.
Claim a Small Credit Before You Claim a Large Credit
It may sound weird, but we recommend doing so. Why? Because if you have zero paid credits, it can seem way too suspicious to your potential creditors. They want to see proof of your solvency, and the best way to show it is to have a history of successfully paid credits (without any delays and problems). So, start with smaller loans to get bigger credits in the future.
Formulate Your Aims Clearly
You should determine why you claim for a credit, what its purpose is, and where the money will go. This is a popular question that you can get from your potential lender. The fact that the lender wants to know details about where the money will be spent should not be a surprise for you; otherwise, how can they make decisions?
Have Your Documents at Hand
You should store all financial documents tied to your business in one secure place so you can easily access them if the creditor asks. Do not through away any receipts or records because one day you may unexpectedly need them.
Maintain Good Relationships with Your References
Do not postpone payments, be reasonable, and try to avoid conflicts. If you keep friendly relationships with your references, they will not let you down and give recommendations that will make it easier for you to get the credit.
Keep Your Credit Score in Good Shape
We are talking both about your business and personal scores. Both of them should be fine so the lender can be sure about your ability to pay. The way you treat your own finances also affects your business, so be careful with the funds you use for personal needs.
Re-check Everything in Your Application
Before you submit the application, you have to ensure that everything you have written is correct. Your possible lender should get the right info, and in some rare cases, the lender can check the info you have given by themselves.
Pay Attention to the Terms
Lastly, even if you have obtained the credit, do not hurry: you have to check all the conditions and ensure you will be able to pay on time. Discuss the terms with your creditor and clarify all questions (how much you get, when you have to cover the debt fully, what the interest rate is, and other unknown details). If something bothers you, do not afraid to ask questions: it would be much better than having massive problems later because you cannot pay as discussed.
Of course, lending money can be a huge risk, and you will probably try to find ways that will lessen this risk. If you are the one who should decide if an entity gets credit or not, here are two vital things you should do:
If the applicant provides you with a template’s short version that we have described above, the only way to get more essential details is to ask questions by yourself. You have to learn more about the business, its products or services, its activity throughout the last couple of years, info about its highs and lows, customers, loans, and so on.
Asking for statistics (numbers showing annual sales, signed contracts, new clients) is quite smart. It would also be useful to find out how often the business covers parts of its existing credits. All this info will help you to make the right decision and do not regret it in the future.
Even if the business representative claiming a credit tells you nothing but lies, you always have a chance to speak to the business’s trade references. This will help you to clarify shady things and dispel any doubts you may have.
You can ask about payment frequency, documents the entity provides (if there were any untruthful or suspicious papers), and the relationship between parties. Sometimes the characteristic given by references makes much more sense than an interview with the credit claimant.
Unfortunately, it is almost impossible to extract info about the claimer from banks or financial institutions where the claimer holds their accounts. This information is confidential most of the time. But we hope that you will manage to get as much data as needed from references and the claimant themselves.