It is always smart to be prepared. Whether you are studying for a test or growing your laundromat, the more knowledge you have, the better off you’ll be.
This certainly applies to financing. Owners of new laundromats can get ahead of themselves from time to time, focused more about the service rather than keeping the financial side of the business organized. If you skipped a few steps – but now want to pursue a loan – then you should go back and make sure your laundromat has its details in order.
“Don’t be unprepared when you apply for a loan.”
Here is what you can do to prepare for a loan application:
Decide what you need
Not all loans are created equal. If you want to get the best for your laundromat, you’ll have to first figure out what you need.
According to the U.S. Small Business Administration, you should ask yourself a couple of questions, including:
- Are you borrowing to mitigate risk or grow your business?
- What is your current loan history?
- What will you use the capital for?
- What is the current laundromat market?
- How successful is your business?
Asking these questions can help you narrow down the type of loan you want and whether or not you are a good candidate for this type of financing.
Gather all relevant materials
A prepared borrower is often considered more favorable in the eyes of lenders. If you want to have the best chance to get an ideal loan, you should consider taking a few preliminary steps.
For starters, you need to know your credit history. Any lender will check on their end, so look first for problems. If you find any issues, take the appropriate corrective measures. Then, you should gather any materials that highlight your laundromat’s history and indicate your ability to repay the loan. A profile of your business is helpful, as are related financial documents.
Here are a few items that are necessary to have prepared:
- Profit and Loss Statement for your laundromat business
- Utility Bills up to 12 months
- Business and personal tax returns (most recent)
- Business and personal bank statements (3 months)
- A copy of your premises lease or deed
Overall, your goal should be to position your laundromat as a strong, stable company and yourself as a responsible borrower.