6 Signs You’re Ready to Apply for a Loan for Your Business in CNMI

Many of the local businesses in the Commonwealth of the Northern Mariana Islands (CNMI) are currently thriving. Much of this success leads back to the ingenuity, hard work, and dedication of CNMI business owners, plus to some of the support that comes their way. According to the Northern Mariana Islands Investment and Business Guide of 2017, CNMI received $13.2 million from the US Department of Treasury’s State Small Business Credit Initiative. Indeed, local business owners can tap into federal funding like this—or into private financing from banks and loan companies—to bolster their available capital and improve their operations.

If you own a business in the Northern Marianas, why not consider applying for a business loan? Contrary to what many may still believe, it is neither difficult nor risky to borrow money for your business—provided you do things right. A business loan will help you fill gaps in your capital, improve your cash flow, and even address day-to-day expenses with ease. And if your business anticipates major growth in the near future, it can be more easily sustained with the financial security provided by a loan.

Perhaps, a better question to ask is if the timing is ripe for you to apply for a business loan. There are several requirements you will need to check off on, and you will have to be responsible about paying your interest on time. But if the six indicators below describe your present situation, then perhaps it’s time look up banks or loan companies in CNMI. You may be poised to make one of the best decisions yet for your business!

You’ve Got All the Paperwork Ready

Most loan application processes are streamlined, and it takes less time now for a business loan to be approved than it did before. Still, whoever it is that you will approach for your business loan will need several important documents from you. Documents that you should have ready include the following:

  • Your loan application form
  • Your business license from the CNMI Department of Commerce
  • Your company’s financial statements
  • Descriptions of your business collateral
  • Your company’s income tax returns
  • Other documents that a lender may request from you

Don’t apply for a business loan until someone in your company can get started on fulfilling these documentary requirements. Once you’ve collected all the documents you need, you’ll have cleared a good chunk of the loan application process.

You Have a Solid Business Plan

Another thing your lender may ask from you is your business plan. This will give them insight on whether it’s a good idea for them to lend you money. If you have a rock-solid business plan that you truly believe in, you may have a good chance of securing a loan. Show it to the lending institution for a strong impression of what you can do. The business plan that accompanies your loan application may consist of the following items:

  • An overview of what goods and services your company provides
  • A market analysis
  • A management and operations plan which includes production and distribution methods, a list of suppliers, and billing and record-keeping policies
  • Financial plans, which include monthly operation costs, business forecasting, and risk analysis
  • Other recommended supporting documents

Your business plan should give your lenders clear-cut perspective on what your business is about and whether it’s viable to support you. Start applying for your loan when you’ve got all these details hammered out.

You’ve Got a Sterling Business Credit History

When you apply for personal credit, the bank usually looks at your credit score to determine how creditworthy you are. If you’re deemed to be financially responsible, you’ll likely be eligible for a wider range of financial benefits. The same principle applies to business loans. It works in your favor if your lender sees that you can be trusted with the money you are borrowing.

Prove to them that you are a competent manager of your company’s funds and resources. Show them that you pay your business bills on time, and that you won’t have difficulty paying interest during the loan period. If your business has a good debt-to-income ratio—meaning it’s bringing in a lot more money in comparison to how much it already owes—that’s even better.

Your Demand Has Outgrown Your Supply

An upsurge in customer demand is a dream come true for most business owners. However, you won’t be able to meet your obligations if you don’t have the cash or resources to address it.

If your business activity has surged and your current funds can’t keep up with it, maybe it’s time to apply for a business loan. Whether you need to purchase more products to fill your inventory or you have to hire more people to sustain your business processes, you’ll be able to access the financial resources you need to keep your customers happy.

You Need the Extra Cash for the Off-Season

On the flip side, it may also be good to apply for a loan when you anticipate less activity than usual. If you experience peaks only during a particular season—like summer, for example—then you may be worried about your cash situation for the rest of the year.

If that’s the case, then you may have to borrow money from a bank or a loan company just to tide things over. The loan can help you achieve peace of mind about your finances all year round.

You’re Scaling Up

Lastly, a business loan may be the right decision for you if you’re about to check off on a major business milestone. This includes opening a new branch, signing on a new high-profile client, or cementing a new business partnership.

What you should demonstrate to your lender is that these new opportunities have a likelihood of strengthening and growing your business. If they see the logic behind your optimism, they are likely to approve the loan for you.

There’s a healthy business landscape being nurtured in the CNMI, and it’s wonderful that you are part of it. Capitalize on your momentum by applying for a business loan today. It’s a short-term engagement that can result in long-term prosperity for your enterprise!