Have you been waiting for a while now to see whether your business will be funded? If not, the chances are big that at some point you will be looking to apply for a business loan.
Using business financing will allow your business to take on new and bigger opportunities. It will fuel growth and improve overall business turnover.
Applying for a business loan from a bank is a long, tedious, and difficult process. On top of that, you will have no guarantee that your business loan application will be approved by the bank.
Let’s look at the stages of applying for a business loan from a bank:
- The business owner will have to request the application documentation from the bank;
- Thereafter, the voluminous application form will have to be completed by the business owner, together therewith the business owner will have to gather and provide all the relevant FICA and supporting financial documentation to accompany the application;
- After submitting the application and supporting information to the bank, the bank will attend to its due diligence and only after some time will the bank approve and/or underwrite or deny the business loan application;
- As soon as the bank approves the application, it will issue the business owner with a letter of commitment; and
- Finally, the bank will finalise the paperwork and close on the business loan application.
This might not seem like too many steps and a lengthy process, but the process involves a lot of back-and-forth and takes at least 3 to 4 months before the business loan is approved and the money is released into the business bank account. Bear in mind, that this will only be the case when there are no unforeseen delays, queries and/or problems in the application process.
Now, why would this process be so lengthy?
The paperwork is not only voluminous, but it is a tremendous amount of work for both the business owner and bank to peruse, complete, compile and process the application documentation. To ensure that the application information is accurate the banks will require the businesses’ most recent documentation, which usually causes a lot of back-and-forth, and if any of the information provided, is incorrect, it will result in even further delays and/or the blatant rejection of an application.
A common problem experienced by SMMEs is that banks can increase their profits, by focusing on larger monetary value loans, usually applied for by bigger business structures. Resulting in the banks prioritising the larger value applications, leaving the SMME’s applications unaddressed and pushed to the back of the line.
Not only are business bank loans difficult to qualify for, but they are also a lengthy and time-consuming process, causing SMMEs to miss out on high-yielding business opportunities. For SMMEs, there is no better saying than: “Time is money”, especially in today’s competitive business industry.
Therefore, it is often more viable for SMMEs to find financing from alternative financiers.
CorpFin is committed to expediting the application process and to working at the speed of lightning to ensure that SMMEs are provided with the necessary funds in no time! All of this is to assist the SMME to not lose out on any business opportunity.
Visit CorpFin for more information.