Lenders check your bank statement before giving you a business loan for a number of reasons. Here are some of the main reasons:
Assessing your creditworthiness: Your bank statement can provide lenders with an overview of your financial health and history, including your income, expenses, savings, and debt. This information helps them to determine whether you are a responsible borrower who is likely to repay the loan on time.
Verifying your income: Lenders need to verify your income to determine whether you can afford to repay the loan. They will check your bank statement to see your regular income deposits and the consistency of your income.
Checking your cash flow: Lenders want to see that you have enough cash flow to make loan payments. They will check your bank statement to see how much money is coming in and going out of your account on a regular basis. They will also check to see if you have enough money saved up to cover unexpected expenses or downturns in your business.
Detecting fraud: Lenders will carefully review your bank statement to ensure that there are no unusual or suspicious transactions. This helps them to detect any fraudulent activity or misrepresentation of financial information.
Assessing risk: Lenders use your bank statement to assess the risk of lending money to you. They will look at your past financial behavior, such as any overdrafts or bounced checks, to determine how likely you are to default on the loan.
What next with Lendigo.
WHAT NEXT TO DO?
- Bring your calculator and put your business projections to paper.
- Confirm how much credit your business can access with the Lendigo App.
- Speak to your Lendigo portfolio manager to help you pick the best loan options for your unique business type.