While different lenders tend to have different standards of requirements, many of them consider basic factors such as the debt-to-income ratio, income, and the credit score of a person. This article will talk about some of the steps that a person can consider if he wishes to obtain a business debt consolidation loan.
- Checking the credit score
Lenders generally require that a person has a score of more or about 650. However, several lenders specialize in providing bad credit loans which might work if a person has a credit score of around 500.
- Going through a consultation
Before getting a loan, a person will have to pass an interview process with a team that would help determine whether he is a good candidate for the loan.
- Submitting financial documents
A lender will most likely ask for:
- A list of debts and equipment
- Projection of sales in future
- Business and personal tax returns, balance sheets, and P/L statements of several years
- Personal financial statements
- Initial review
Upon turning in the documents, the lender reviews them. If a person passes, he receives a prequalification letter outlining the terms of the loan.
- Due diligence
Lenders authenticate the provided information and perform tax background research coupled with the presence of any previous lawsuits. Upon passing this stage, a person receives a commitment letter.
- Final steps
A lender will check documents involving asset titles and original loans with a 12-month history of payments.
- Closure
After completing these steps, a person can sign the final documents to obtain a business debt consolidation loan.
Conclusion
A business debt consolidation helps streamline interest rates, different payments, and due dates. With effective handling of payments, a person can easily track the amount he owes, and the time he is to pay it off.