Bankruptcy can affect your business devastatingly, but it does not mean that you cannot make a fresh start. But before you think of getting a loan, always think through the consequences i.e. you will personally be responsible to pay debts if your business fails again and as well you will not be eligible to file a bankruptcy again. So it is always wise to access the reasons that have caused financial downfall in the past in order to avoid them in future. Here are some tips by following which you can improvise your chances of getting a loan after Bankruptcy:-
- Rather than contacting influential and distinguished banks, contact community banks as the authoritative banks through their automatic screening process will deny you immediately after considering your credit score.
- Try to establish contact with the banks which specialize in small business lending or you can also negotiate with regional non-profit investment funds through the personnel of economic development department, as these agencies grant loans to small businesses in low-income areas.
- Before you contact any of the potential lenders, make sure that you have a streamlined and well-defined business plan for presenting them.
- Your chance of getting a loan increases, if you are able to show your lenders that your debts are running minimum since bankruptcy. Show them the evidence in form of statements; showing your mortage or rent payments, vehicle instalments etc.
- In order to get your loan approved; show your lender that you have consistent income since bankruptcy and with this income you will able to repay the debt.
- Attach a brief explanation of the reason that leads to the bankruptcy with your loan proposal i.e. whether it is a divorce, auto accident, chronic illness or major trauma injury. This information may help the lender to determine your eligibility for the loan.
- Try to locate lenders who specialize in small business loans and seek information about their terms and conditions. Your local chamber of commerce may also suggest you the names of lenders who provide such loans.
- Seek the help of a friend, colleague or a family member with good credit score. If they agree to co-sign a loan guarantee for you; it is definitely going to enhance your chances.
- Ask for a smaller loan amount initially and gradually work your way up to a larger sum i.e. after you have made positive and consistent earning records.
- While filing a business loan application with a bank; always present a viable business plan along with it. Because your business plan is the most crucial element for the bank to choose you as a viable candidate.
If you have any queries regarding filing bankruptcy and its pros and cons; Contact to Wani & Associates P.C. Our compassionate and acknowledged attorneys through their incessant services and efforts will assist you to resolve any of your bankruptcy related issues.