Using financing to get ahead is one of the key components to growing a small business in practically any industry, but getting approval for loan financing is not always easy. Between the variety of instruments you have to choose from and the differing requirements for each, it can be easy to get lost. What you should keep in mind is that there are a few easy ways to make the most of your application so you have the best possible chance to get approved. Here are a few secrets to making your applications more effective when you are seeking small business loans.

1. Demonstrate Adequate Collateral for the Loan Type

Whether you are seeking loans from banks or going into the private market, collateral is the key to cost-effective financing. Securing the debt with an asset holds down your costs and it also makes your credit history less of an issue, no matter what it looks like. That is because lenders who can sell an asset to recover losses in the event of a default are more likely to go ahead and approve loans for those with less than perfect credit. They also often lower the cost of loans to those with great credit.

You need to show you have assets to offer as collateral that meet the terms of the loan. That means if the financing company offers 70% LTV, you need to show that your asset is worth enough to have 30% equity in it after the cost of the loan.

2. Make Your Income and Financial Projections Clear

While collateral does a lot for your loan approval, you still need to show you have the income to meet all your current obligations and the new loan payments. That means showing income from the past while you make credible predictions about future income. Use your sales and marketing data, frequency of orders from your most regular customers, and data from past years to show what the next three to nine months should look like if your business keeps thriving as it has been. Avoid being too optimistic, but don’t undersell your business either.

3. Apply for the Right Loan

Small business loans are not all the same. They are built to suit specific purposes, so you need to find the one that fits your current situation. Working capital loans, for example, have different interest rates, LTVs, and payment terms than asset acquisition loans. Finding the right program means finding the criteria that suit your business’s finances and current financial needs.

Here at Brightview Commercial Capital, we offer a variety of commercial finance solutions to all types of businesses—including startups and established businesses. We invite you to consult with us to see if any of our business loans can meet your company’s needs.