As an accountant, you have the perfect platform to help your clients work through the business loan application process. With the record showing that 82 % of small business loan applications get denied by the bank, while 14 million small businesses don’t get the funding they need each year, this is a golden opportunity for you as your client's accountant-with your years of financial knowledge and expertise-to give them a better chance of getting that business loan they need.
The Federal Reserve reports that small business borrowers spend an average of 25 hours searching for loans and preparing paperwork. Look at the time you could save your client, and as we all know, time is money.
Ways to Help Clients with the Loan Application Process
1. Introduce All Loan Options--In spite of the above dismal statistics concerning bank loans, banks do still providing the lowest cost of capital. A bank should be their first try at a small business loan is they have good credit, great revenue history and profits, as well as a spotless financial record.
However, if you know your client has some financial weaknesses, or the bank has already denied them, an important role you can play in the process is helping your client understand their options outside of the bank. With bank lending on the decline, online or “alternative,” lenders have emerged to help fill the void left by the banks.
Research the different products that can be found online, especially those that are more unique in form, such as short-term loans. Take the time to research various lenders and read their reviews, identifying those that have superior customer service and lower rates. This way, when a bank isn’t an option for your client, you’ll know exactly where they should start their loan application.
2. Help Prepare Application--With your involvement, a client can drastically reduce the time it takes to apply for a loan. Not only do you have most of their financial information,you also most likely have many of the documents lenders need already prepared, and if not, you’re able to prepare them much more quickly than your clients can. Offering to help prepare your clients’ loan application not only saves them a ton of time, your assistance will help them submit a much more organized application.
3. Explain Loan Offers in Detail--As you’re advising your client through the loan process, you need to make sure they understand the value of applying to a few different lenders. This increases their chances of getting approved, and if they are approved by all or some of the lenders they apply to, they will have a few offers to compare. If your client receives multiple offers, help the to compare various loan products. At first glance, one offer may seem best because the interest is lower, but if this lender charges a 3% origination fee, another lender whose interest rate is only 1% higher but has no fees may be the better option.
Every small business needs working capital to succeed. When your client is at a point where new capital could change the course of their business for the better, it is important that you step in to make sure the process of securing this capital is as easy and successful as possible.
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