The management of a small business is highly enthralling and exhausting touching on the realms of possibility, especially if a light breeze blows across cash. That is all about purchasing equipment or expanding operations. Though the aura of this big bank has absorbed many, Bank of America (B of A) was set up to offer assistances to small businesses in various loan formats. This will introduce you to the offerings and opportunities Bank of America provides for small business loans. We will discuss the types of loans, what is required for qualifying, the process of application, and finally tips that will increase your chances of approval.
Bank of America Small Business Loans Types
Bank of America has various types of loans available to business owners. Each loan is intended for specific purposes. It is wise to choose the one that most fits your needs.
Term Loans
A term loan is straightforward. You get a lump sum of cash, which you pay back in fixed installments plus interest during a specified timeframe. An example of its use would be for the purchase of equipment. For instance, ovens could be needed in the bakery; therefore, the term loan provides money for this large expense. The predictable payment scheme is what makes these kinds of loans attractive.
Lines of Credit
A line of credit is an umbrella in the rain. It allows your company access to funds when needed. You only pay interest on the amount utilized. It is a revolving credit, meaning it can be reused as you pay it down. Apply caution, though, in the way you manage your line of credit. Do not go on a spending spree; it benefits you in taking care of unforeseen expenses.
SBA Loans
SBA means Bank of America is an SBA lender. In turn, loans or advances by the SBA get partially guaranteed by the government. The less risk for the bank, more small businesses qualify. There are 7(a) and 504 loan programs. They are characterized by more appealing terms, and also lower down payments.
Eligibility Requirements for Bank of America Small Business Loans
Bank of America will assess numerous attributes: Are you genuinely a good risk? Credit score, business valuation, credit rating, and collateral would all be variable factors that could be favorable to you upon acceptance of your application. Get your chances of obtaining it increased to satisfy the set criteria.
Credit Score and History
The credit score describes the narrative about the credit history according to B of A. The lesser the credit rating, the greater the risk. Try to better your rating before consideration. Pay bills on time. Carry low balances. A good rating will help a lot.
Business Financials
They want to see all those financial documents. B of A wants to see your tax returns. They also want to see the transferring bank statements. They want to see profit and loss statements. Solid financials add weight to your loan application. You should stay on top of keeping accurate records.
Collateral
A collateral secures the loan. Collateral may either be property or equipment. The bank gets it in case of your inability to pay. Colateral reduces banks’ risk level. Better terms could follow with the inclusion of collateral.
A Step-By-Step Guide to Applying for A Bank of America Small Business Loan
The application process needs a lot of preparation. As a first step, begin collecting documents. Complete the application form carefully. Follow up after submitting.
Gathering Required Documents
Prepare all documents beforehand. Be aware that the bank statements will be needed. Tax returns should be kept. Financial statements are considered a must. This checklist definitely helps to expedite things.
Completing the Application Form
The whole form should be filled, and accuracy is of utmost importance. Do not leave anything unfilled. Double-check each and everything before submission.
Submitting and Following Up
Submit your application. Ask about the next stages. See that you follow up with regularity. Keeping your feet in touch shows recommendation for your interest.
Maximize Your Chances for Loan Approval
There are several things you can do to get approved. The strong business plan is important. Improvement in cash flow is also necessary. Taking a consultation from experts may also do nice to you.
Developing a Solid Business Plan
Business Plan is your roadmap. Write your goals in it. Your strategies must also find place here. Describe how the process will be carried out. Mention your market. Your preparedness shows.
Improvement of Cash flow
Improving cash flow means everything. Making everything available and speeding up receipt pays expenses carefully. You will prove ability to pay loan.
Seeking Expert Advice
Consult your financial advisor. Get a mentor who runs a small business. There, you can gain meaningful advice. They guide you throughout the journey.
Conclusion
Bank of America has a range of small business loans from which you can choose. Very critical, however, is an understanding of the kind of offer available, eligibility, and the application steps. Prepare. Improve your chances and seek help as often as you can. With some bit of planning, you will hit your funding targets.
