Whether you apply for business funding from your local bank, an online lender or through Lending Express, it all comes down to the same thing – they’ll want to see your business bank account activity, including your bank statements and transaction history for at least the last few months.
A bank or traditional lender will generally ask for a whole lot more paperwork and financial information, so bear that in mind when you apply for a loan from an online lender – you’re getting off easy!
Why do lenders need to see bank statements?
So what do lenders look for on bank statements?
How does this help them assess your business?
Read on to find out why they need your bank statements.
Verify your business’s name
Lenders want to make sure that you are who you say you are, and what better way to do this than your bank statements? They use the information provided on your statements to verify your business’s registered name and trading name.
Your bank account activity over the past few months can give a good indication of your business health. Lenders usually ask for at least 3 months’ worth of bank statements.
Average daily balance
If your average daily balance remains more or less constant and is positive over a period of time, you are likely to get funding for your business.
Obviously, the more daily deposits you have, the better, as lenders can see that you’re bringing in revenue. They get this information from your bank statements.
Your bank statements prove to your lender that your deposits or revenue are more than your payments or expenses. Another tell-tale sign of a low-risk borrower.
Can I get a loan without showing bank statements?
Since your bank account mirrors your financial health, it is pretty much impossible to find a business lender that does not require some indication of your financial stability. A loan without bank statement does not exist! It’s like a sandwich without bread, or a leopard without spots.
You get the picture.
The closest thing you could get to a no doc business loan is a Merchant Cash Advance, but these lenders generally also ask you to link to your bank statements or credit card statements. So what exists, really, are low doc business loans, with bank statements being ‘low doc’ requirements.
Other low doc business loans include unsecured business loans, lines of credit, invoice financing and equipment/vehicle finance.
So do lenders check bank statements? Yes, they do.
And do lenders verify bank statements? Affirmative on this one too.
Which is part of the reason why banks take so long to assess loan applications – not only do they need to collect the documents, but then they still have to verify them.
Which brings us to…
A faster alternative to uploading bank statements
By now you’ve realized there’s no getting around providing your bank statements, so you might as well make it as simple for yourself as possible.
Instead of logging into your online banking, downloading your bank statements and uploading them to your loan application (sounds like a waste of time, right?), you can get this all done in one quick step.
In this digital age there’s a solution for all you time-deprived business owners.
Instead of providing your bank statements the old fashioned way, when you apply for a business loan through Lending Express you can now simply link your bank account to your loan application and you’ll unlock optimal funding options from the top lenders. This gives you better results, in a fraction of the time. Read on to learn more about the benefits of linking your bank account.
There’s also the added benefit of saving the lender from having to verify your bank statements, which means an even quicker approval for you.
At Lending Express, we use Plaid, one of the leading and most secure services available, to enable our customers to link their bank accounts to their loan applications. You don’t need to know the technicalities behind how Plaid works (unless you happen to be a techno-geek, in which case let us know and one of our techno-geeks will fill you in).
What will interest you though is that one in four Americans with a bank account now uses Plaid. In a country where 93.5% of people have bank accounts (based on 2017 data), this means that 81.4 million people in the US use Plaid.
Plaid works with top companies including Citi, American Express, Venmo and more. The company is rock-solid and growing and, according to Forbes, Plaid is now valued at $2.65 billion.
Is it safe to link your bank account?
Yes, it is completely safe to link your bank account to your Lending Express application.
- Your data is encrypted by the best technology, guaranteeing complete privacy and protection.
- Linking your bank account gives view-only access to your bank account.
- We only view information that you would share anyway, such as your bank statements and transaction history.
- We don’t store your bank login data.
How to link your bank account to your loan application
When you apply for a business loan through Lending Express, you can link your bank account to your loan application in one quick step.
Simply click Link Bank Account and then put in your bank login details. Remember we don’t store this information and your security is guaranteed!
Benefits of linking your bank account
We’ve already determined that linking your bank account is the fastest, easiest and most convenient way to provide your business financial history.
Another major benefit is that it provides real-time data. This enables you to get the best funding offers based on your current financial situation and allows you to constantly improve your funding terms.
How does this work?
At Lending Express, our algorithms continuously analyze your business health based on your most recent bank account activity. As your health improves, we automatically unlock new and improved funding opportunities for your business.
When applying for a business loan, linking your bank account to your loan application will help you get the best loan offers available. Your data is protected and your security is guaranteed.
Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.