Ready To Apply For Your First Commercial Construction Loan? 4 Things You Should Do Before You Go To The Bank
If you're just starting out in the construction business, and you're ready to go after your first commercial construction loan, don't go in unprepared. Trying to obtain commercial construction loans without the proper preparation could leave you looking a firm denial. That's the last thing you want when you're trying to get your business up and running. Luckily, with proper planning, you can walk out of the bank with an approval for the funds you need. Here are four steps you should take before you apply for a commercial construction loan:
Put Your Business Plan Together
If you don't have a business plan yet, you need to put one together before you apply for your loan. Most banks are going to require a well-documented business plan before they'll even consider approving a loan for new construction. Your business plan should provide details about your business, including how it's going to be run, and plans for future growth. It should also include details about the people who will be involved in the business, including licenses and experience each person possesses.
Include Your Earnings Projections
When putting your business plan together, it's important that you include a separate section for your earnings projections. This portion of the document should outline what your anticipated earnings will be for at least the next two years. You'll need to include a plan for how you expect to receive those earnings, as well. For instance, if you have additional contracts that are in the planning stage, include the earnings you anticipate receiving from those projects.
Obtain Your Contractors Estimates
If you're embarking on a commercial construction project, you're going to be working with many different contractors, including electricians, plumbers, and roofers. Each one of those contractors will require separate bids and estimates for costs. When you apply for your commercial construction loan, be sure to include those contractor estimates. They're an important part in determining the total cost of the construction project.
Gather Your Personal and Business Financial Records
If you're just starting out with your own business, your financial records might not go far enough back for the bank to approve a commercial loan. If that's the case, you'll also need to provide your personal financial records. To speed up the process, it's a good idea to anticipate that need. Before you apply for your loan, gather all your personal and business financial records. That way, you'll be prepared when the bank asks for those documents.