Can Your Business Qualify for a Loan after Filing for Bankruptcy?

A person working on their finances Lenders do not consider hotel owners who have recently filed for bankruptcy as their most risky borrowers. A creditor like AFR Financial might still offer such a borrower a loan for the hotel business.

If you are such a borrower, you may have to shop around for a loan since many of the lenders will shy away from investing in your business. Also, you ought to have a solid explanation for your bankruptcy and will have to convince potential lenders if you are now financially stable.

Use the following tips to convince the lenders to invest in your business.

Have a Business Plan

Make sure that you have a solid business plan before approaching a lender for a loan. Your business might be considered to be risky as you might have already soiled your brand by filing for bankruptcy. A perfectly laid down business plan will, however, convince the lenders otherwise.

Low Debt

Filing for bankruptcy provides you with a new start. You have the choice of seeking financial aid from any lender or credit card company. However, it is wise to keep your debt level low after filing for bankruptcy so as to prove to the lenders that you have attained financial stability. Presenting statements of recently paid mortgages and car payments might also portray you as a responsible borrower.

Have Consistent Income

You will need to assure the lenders that you have the ability to pay the loan in the set amount at the end of an agreed upon financial period. A consistent source of income will, therefore, result in you attaining the loan. If you level of income is to fluctuate in the future, it should shift positively.

Lenders understand the suffering that you might be going through after bankruptcy. However, they will never let their emotions get in the way of their investments. It is, therefore, wise to use the above approach to get your desired loan.