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Unfortunately, some businesses may end up failing and closing their doors because they lack the funds to keep afloat. Loans are sometimes necessary to take care of expenses, employee wages, or expansion until the business turns a profit. An LLC can grow its business with business loans if it is properly structured so as to increase chances for approval.
Apply for a d-u-n-s number from Dun & Bradstreet. Dun & Bradstreet is a credit bureau for businesses It reports the payment history from your LLC to creditors. It also keeps accurate records of business information like the number of employees, yearly revenue, as well as the business location. Apply for your d-u-n-s number online. There is no cost, and the d-u-n-s number can be obtained in as little as 30 days.
Apply for a tax ID number. A tax ID number (also known as an employer identification number) is a nine-digit number provided by the IRS that is used to establish business credit, open business accounts, as well as hire employees. Banks may request your tax ID number for pulling your business' credit before extending a loan. Visit the IRS website to apply for a tax ID number online or contact the IRS over the phone at 1-800-829-1040.
Hire an accountant to draft a profit and loss statement and balance sheet for your LLC. A profit and loss statement shows how much income the business has, if any, as well as how much is profit. A balance sheet weighs the business' assets vs. its liabilities. The bank's underwriting department may need to see this information to see how much of a risk your LLC is in repaying the loan.
Draft a business plan for your LLC. The underwriting department may want to see your business plan to see what contingency plan you have in place for any challenges your business may face. Speak with business consultants from organizations like Score or use business plan templates available online.
Apply at your local bank or credit union for a business loan. Use resources like the Small Business Administration to apply for small-business loans. If your business credit is weak or the LLC has been in business for a short time, you may have to rely on your personal credit score to guarantee the loan. A score of 620 or above will increase your chances of approval.
Qyou Stoval holds a bachelor's degree in communications/media studies from Clayton State University and a MBA with a concentration in marketing from Ashford University. He has more than 10 years experience writing articles, poetry, novels, and stage and screen plays. His writing career started professionally in 1997. He is also proudly serving the United States Air Force.