Multiple Owners Here’s how you should Prepare your Business Loan Application

Multiple Owners? Here’s how you
should Prepare your Business Loan
Application
When you are not a sole proprietor of your business and there are others too
with whom you share the ownership of your business, it is called a business
with multiple owners. The need of money in any kind of business can arise at
any point of time and your business may be in need of some extra fund.
Abusiness loan is undoubtedly the best and most convenient way to raise fund
for your business. But when the ownership is shared by multiple persons then
the owners have to take some additional consideration while submitting the
business loan application. The next 3 minute read will give an insight into the
type of business loan application which will make you get a positive response
from the lender.
The Kind of Partnership
A partnership of business can be an affordable way to start a business. Sharing
financial responsibility and clubbing the credit scores of all partners to
complement each other can become a strong point to make your loan
application go sanctioned. But before you apply for a business loan, one must
know the type of partnership business you are having. There are three kinds of
partnership in general.

General Partnerships
A general partnership is the kind of partnership where all the partners are
equally liable for management, decisions profits and losses. Sometimes the
ownership can be unequal too provided the definition of each partner’s
responsibility needs to be determined before the partnership is formed.
Limited Partnerships
The limited partnership is when the ownership of the partners depends on their
share of the business. Such kind of partnership makes partners have less liability
and less management input as most of the times such partnerships are done for
an investment purpose.
Joint Ventures
Joint ventures are a kind of partnership which lasts for a small duration may be
for one project or two. Such partnership lasts for a limited time where a starting
and an end date is prefixed.
How to Apply For A Business Loan With Multiple Owners?
There are some key points which one should take into consideration while
submitting a first time business loan application.
All the partners of the business must have a good credit score. Any
of them with a low credit score can result in facing rejection. The
partners much check everyone’s credit score before submitting the
loan application.
Each partner must keep some of their valuables for the security of the
loan. Every applicant must possess such asset which is valuable
enough to act as collateral of the loan. Failing to do so by any of the
partners can make the lenders reject the application.
As mentioned above, the ownership of a company can be distributed
equally or unequally. If any of the partners have a ownership of 20
percent or more, the rules say that this small business must produce a
personal guarantee while applying for a business loan. such
guarantees are taken by the lenders to be assured that in the cases like

defaulting, the person himself will be liable to repay the loan. It is
experienced by many business loan defaulters that their personal
assets like property or home are auctioned by the lender to recover
the lent money.
Before applying for a business loan application, it is better to clear
all Credit cards, student loans, mortgages, car loans, medical bills,
and foreclosures which can impact the eligibility. Every owner
must disclose their financial liabilities to other partners before
reaching a lender.
Rather than everything else, a strong business proposal is an
essential tool to impress the lender. If one is facing troubles then
the business structure must be reconstructed. Rewriting articles of
organization, redrafting operating agreements etc can be done to
reframe the business proposal.
A business with multiple owners may be one of the many ways which enable a
person with less investment to start his own business. The contribution of each
partner completes the whole system which is needed to start a business. Getting
a loan for a partnership business is a bit more complicated than a general
business loan. But with an application which is completed and equipped with all
required documents are enough to make it granted. Before applying for a
business loan, all co-owners must sit and discuss everyone’s credit history.
When there will be a deep understanding of past, it will be easy for all of them
to go towards a successful future