Steps
The following steps must be followed in order for an applicant to be approved for a loan. In addition to these steps, we expect to arrange at least one more in-person interview during the evaluation process.
- Fill out pre-qualification application.
- Those who are pre-qualified should schedule an appointment with a Loan Officer to pick up the loan application forms and go over the supporting documentation requirements.
- Fill out the loan application and gather supporting documentation. Return completed package to BiG loan officers.
- We'll process the application, filtering through the information you give us to produce a complete report for our loan review committee. In most cases, we'll be occasionally following up with you on specific items that require further explanation. This process typically takes us about 2 weeks to finish. During this time, BiGAUSTIN loan officers may decide to decline the loan before advancing it to committee.
- Once the report is finished, we present it to our loan review committee, made up of bankers and community representatives. The committee makes the final decision on accepting or declining a loan. Once the committee has decided, a loan officer will call to inform you of the decision.
- If approved, we will draw up the legal documentation and schedule a closing date. At closing, we'll present you with the check (actually, typically multiple checks made out to each vendor).
Pre-Qualification Application
The first step in applying for a loan with BiGAUSTIN is to fill out the pre-qualification application. This application is relatively short-two pages total-and gives us a picture of your current financial status and allows us to view your credit report. All guarantors or cosigners must fill this out, including everyone who owns 20% or more of the business.
Loan Application
The complete business loan application covers further details about the business and the intended use of funds, as well as providing us with a more complete picture of the personal finances of all signatories. Once a pre-qualified applicant submits the business loan application and the supporting documentation, we typically require 2 weeks to process all of the information and present it to our loan committee, who makes the final decisions.
Supporting Documentation
Pre-qualified loan applicants will need to fill out the Business Loan Application and submit the following supporting documentation:
- Personal financial statement;
- 3 years of income tax returns, both personal and business;
- The most recent business balance sheet;
- Detailed business asset list (schedule of collateral);
- Year-to-date profit and loss statement;
- 3 months of personal and business bank statements;
- Accounts receivable and accounts payable aging;
- 2 years of cash flow projections;
- Copy of business lease and/or bank notes (if applicable)
Guarantors and Cosigners
Guarantors and/or cosigners can often make the difference in whether or not your application is approved. All individuals who own 20% or more of a corporation or partnership are required to cosign on the note, as well as to serve as personal guarantors on the guaranty and security agreements. In the case of a corporation, this often means that the principal loan applicant will be signing twice-as the representative officer of the company, and as a personal guarantor.
We encourage applicants to include their spouses as guarantors. Oftentimes, the spouse's credit and/or income will actually increase the likelihood of being approved. In the state of Texas a spouse is legally responsible with or without their guaranty, so having them sign on makes everything transparent from the beginning.
Finally, one more word about guarantors: a strong guarantor is the best remedy for a lack of collateral. We will always want to have some collateral from the primary applicant, but in cases where there is little or marginal collateral, having a guarantor with a strong income and credit rating can mitigate the requirement.