Before the hard hit of the Great Recession, it was a lot easier to get business insurances. You must meet certain requirements before the lender can grant you the insurance. Here are 7 steps you may want to follow when applying for business insurances. Read on.
Develop a relationship with the lender
Before you need the insurance, you may want to develop a relationship with the lender. Key people should get to know your business. Keep in mind that lenders like to deal with trustworthy people. So, let them know as much as possible about your business.
purpose of money
You may wish to specify the purpose for which you are applying for the insurance. Make sure you get a insurance for a good purpose. For example, you can take out a insurance to purchase equipment, property, or software. However, it is not a good idea to take out a insurance to finance losses or acquire unimportant business assets.
You may want to make an assessment of how much money your business needs. If you have a small business, you may not want to apply for a large insurance. However, make sure you don’t underestimate the money you need to keep your business going. Both underestimation and overestimation can cause problems down the road.
Usually, lenders take into account a businessman’s personal credit before granting a insurance. So, make sure you have a good credit rating. If your rating is bad, be sure to work on it to make it stand out.
Find a Lender
You may want to read about the type of lender that best suits your business needs. For conventional insurances, you can go to commercial banks. However, their standards are strict. Non-bank lenders is another option you may consider. Then there are region-specific lenders, which include banks and other institutions interested in economic development in those regions. Finally, you can check out crowdfunding sites especially if your capital needs are no more than $10,000. For folks, you can also check out peer-to-peer websites, such as The Lending Club and Prosper.
insurance application package
You may want to have your insurance application package ready. This includes the documents submitted to apply for a business insurance. Generally, it includes a business plan, profit and loss statements, balance sheets, and cash flow statements, to name a few. You may want to keep in mind that lenders may also check your social media pages while doing their research.
Once you submit the required documents, you may have to wait 15 to 30 days to get a response from the lender. You can check in on a weekly basis to get an update. Usually, lenders may request additional documentation before granting a insurance.
Therefore, if you are thinking of applying for a business insurance, we suggest that you follow the steps outlined in this article.