While debt consolidation is one of the readily available funding solutions for small business owners, this process typically differs from other methods, with every company required to pass through various steps. If you need to refinance your loans, here are some things to keep in mind for successful approval.
Loan Consultation
The first step to getting debt consolidation will be a loan consultation that helps determine if you qualify for financing. For this, your lender will check if you have defaulted on any federal loan, had a corporate or personal bankruptcy, and if your credit is over 650. Lenders also need to determine if your company is profitable, how you intend to use your funds, if you need to buy additional equipment and whether your corporate and personal taxes are filed.
Deliver Your Documents
The next stage will be to ascertain that you have all the necessary documents, after which you will be required to deliver them to your lender. Examples of documents needed for debt consolidation are three years of your returns and your financial statements. Corporate items such as three years of corporate returns will also be required, along with previous and recent balance sheets and profit and loss statements. Last will be an equipment list, a projection of future sales, and a corporate debt schedule.
Initial Review of Documents
The documents delivered will be reviewed at this step, with a successful completion allowing businesses to get a prequalification letter. This gives you a preview of the terms your debt consolidation will feature, even though it may not be a guarantee of final funding.
Formal Due Diligence
Here, your lender reviews all information submitted. If you need to purchase any equipment or real estate, these will be ordered at this stage. Any past tax hindrances and lawsuits are also reviewed at this juncture, with successful reviews allowing you to get a commitment letter.
Provide Final Documents
This step is the last bit of your verification process. Lenders verify asset titles, with borrowers required to provide original loan documents accompanied by 12-month payment history.
Schedule the Closing Date
The last step will be scheduling the closing date, allowing the parties to sign the documents. The lender then releases the money to the borrower, allowing for disbursement of funds as required.
If you need a partner to help with your debt consolidation, Monterey Commercial Capital is the partner you need. Call us today for help with your debt refinancing.