When it comes to home loans and business loans, a lot of people are under the impression that a bank will approve almost anyone who has good credit and intends to pay them back. Although this is sometimes the case with bank financing, Trinity business owners should be aware that there are many reasons why someone would not be approved for a loan from the bank. More people do not get approved for a financial loan than they do get approved, and most of the time it is because they do not adequately justify why they are looking for a loan, or what they intend to do with that money once they get it.

Telling the Bank Why you Need a Loan

It might sound a little redundant to state that when a business owner applies for a bank loan, they have to tell the bank why they seek out bank financing! Trinity business owners who are trying to get approved for a loan to purchase more real estate for their business to expand should state that as their reasoning. Often times people get rejected for a bank loan pretty quickly because they do not explicitly say why they are applying for a finance loan in the first place.

Showing How you Will use that Loan Money

Continuing with the example of expanding a business with purchasing more property, it is not enough to simply tell the bank what you intend to do with that money. With bank financing, Trinity residents should also know how important it is to create a plan of how you are going to use the money given to them in a loan. Bank wants to see that someone at least has a sense of direction of how they are going to apply that loan to their life. Saying you want to purchase a property for your business is not the same as actually creating a plan and sticking to it.

*Disclaimer: The views expressed here are those of the authors and do not necessarily represent or reflect the views of Suncoast CPA Group*

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