The majority of businesses experience, at least to some extent, an ebb and flow of successful, booming sales and a slow season. While this is perfectly normal, as supply and demand are constantly changing, the slower periods can be hard. Although your sales are going up and down as the seasons change, those few months of dry-spell can be challenging when utilities and payroll and other expenses, which pretty much remain a constant.
Seasonal business who experience difficulty during times of slower business can benefit greatly from applying for a small business loan. Taking a loan, even a small one, assures that your business has the funds it needs to make it through the slow period until your sales start to rise again. Any seasonal business owner who wants to apply for a small business loan must first complete these 3 steps to assure their loan approval.
1. Submit 12 Months of Bank Statements
If your business is even remotely seasonal, your paystubs throughout the year most likely vary greatly from month to month. Be sure to have at least one full year’s worth of bank statements available to that lender can understand the full picture of what your sales look like, and not just during certain periods of success or slowness.
2. Prepare an Accounts Receivable Report
If your business allows customers to pay with a credit card (which is practically a given in this day and age), you’ll need to have an Accounts Receivable Aging Report prepared to show the lender all of the sales that you may not have received yet in full, if at all. This will give the lender a good idea of what revenue is still yet to come, as well as an understanding of your customers’ payment behavior.
3. Submit Your Most Recent Tax Return
At the end of the day, business loan lenders want to make sure that they will be paid back within a reasonable amount of time. Your most recent tax return is probably the most important thing a lender will want to see before determining if you qualify for receiving business funding from them. They will be looking into your credit history to see if you have bad credit, big losses, or other activity that they might deem a red flag.
Taking out a small business loan during times of slower sales can be a great move for all sorts of business owners. Having working capital on-hand for any situation that comes up gives you peace of mind and a clear head to be able to use your time optimally and efficiently.
Ready to apply for your business loan? Check out Onebox Funding here for a free quote.