When you apply for a business capital advance, there are a few items you must provide in order to get approved. One of the most important is your business bank statements. This way, your capital advance company can better understand the viability of your business and how you manage your company’s finances. Viewing your revenue and expenses will also help providers – like Wellen Capital – assess your ability to pay back an advance.
What needs to be in the statements?
- Statements must go back at least 3 months. Your business bank account must show its recent activity for lenders or advance companies to evaluate the health and consistency of your business.
- Bank logo and full business name must be included, along with the Account Reference number. Business advance providers want your financial institution to confirm the business bank account details. If they can’t, your application will most likely be denied.
- Personal bank statements will not be accepted. Remember, business lenders and advance companies are supporting your business, not you personally, so the statements need to reflect the financial state of your business.
Can you get an advance without showing bank statements?
It’s unlikely you’ll find any lender, be it a bank or private firm, that will approve a loan or advance without looking at bank statements. Think of it like purchasing a car without knowing its condition. If you do not have a business bank account, now is the time to open one! Having this banking history will be useful when you need to apply for an advance.
What are advance providers looking for in bank statements?
There are two key details that lenders need to examine in your statements.
- Positive Balances. Your average daily balance says a lot about your business. If you’re struggling to keep a positive daily balance, getting an advance may prove to be difficult. We don’t want you to sign a contract for something you can’t afford. And negative or low balances indicate your business may not be able to meet the minimum repayment amounts. If that’s the case, now is the time to think of other ways to improve your business’ daily cash flow.
- Daily Deposits. If the bank account is receiving deposits every day, or almost every day, it’s a good indicator that your business is doing well. However, if you haven’t received a deposit in some time, or deposit patterns are uneven, chances are you will not be approved for an advance because you may not have the funds to pay it back.
If your business is making enough to operate while paying expenses, then you may be considered a good candidate for a capital advance. And bank statements are the best way to show your business’ consistency and ability to turn a profit. This is incredibly important for lenders and advance providers to see because they want to ensure that your business is sustainable before extending capital.
Once you have everything you need to get started, submit a free application! You can include 3 months’ worth of statements with your application to expedite the process. Contact us at 888-963-6130 if you have any questions!