Many small business owners consider taking out a business loan at some point in their careers. A business loan can be used to start a new company, but it can also be used to help grow an existing company. Navigating the loan process can be tricky, though, especially as lending standards continue to evolve. We’ll outline five simple steps you can take to help secure funding for your business.
1. See if you Qualify for a Business Loan
The first step is to see if you may qualify for a small-business loan by asking some important questions:
- What’s your credit score? Lenders often offer low-rate business loans to borrowers who have a minimum credit score of 680.
- How old is your business? Lenders may look at how long you’ve been in business, and many require you to be in business for at least one year to qualify.
- What is your annual revenue? Some lenders have a minimum required annual revenue.
- How is cash flow? You’ll want to make sure you have enough cash to afford your loan payments each month.
The answers to these questions should be enough to get you started but recognize that some lenders will also require business collateral to secure a loan (equipment or property). If you default, the lender can seize this collateral. While that sounds risky, it can also net you a lower interest rate.
2. Determine Which Type of Loan Will Work Best
Which type of loan you need depends on why you want a loan to begin with. If you’re starting a business, you’ll probably want to look to other types of financing like personal loans. Most lenders require cash flow for a business loan, so startups that don’t yet have cash flow may not qualify.
If you’re looking for a way to manage day-to-day expenses, a business line of credit might work for you. This allows you to get financing on an “as-needed” basis to cover payroll or other expenses that may come up.
If you’re looking to grow your business, look at SBA loans, which are backed by the government. SBA loans go up to $5.5 million and other traditional loans may also offer higher borrowing maximums.
3. Compare Business Loan Options
You have options when it comes to getting a business loan, so be sure to look at banks, online lenders, and even nonprofit microlenders. Which option works best may depend on your unique business circumstances. Some lenders may work better for startups while others are good options for those who lack collateral.
4. Gather the Necessary Paperwork
When you apply for a loan, the lender will require certain information. It’s best to gather this documentation beforehand so you are prepared. Be sure you have the following:
- Personal tax returns
- Business tax returns
- Business financial statements
- Legal documents (lease, franchise agreements, articles of incorporation, etc.)
- Business plan
Having this information ready can help you streamline the application process.
5. Apply for a Business Loan
You’re now ready to apply for a business loan. Determine which option you’ll pursue based on the annual percentage rate (APR) and loan terms. It’s typically best to apply for the loan with the lowest APR.
Remember that a business loan is just like other loans in that your credit score may be impacted when you apply. Since credit bureaus don’t differentiate between personal and business inquiries your personal credit score may be impacted, especially if you’re using your personal credit history.
Understanding and following the five steps above for getting a business loan can streamline the process and help reduce stress along the way.
Look…… I would love a business loan o have a web site being built as we speak it will have E commerce books there to buy self help digatl books to buy I can’t remember the company that’s building it but it has a domain name as well a landing page funnles connected to it for free traffic security cyber that is I also am a newbie affiliate internet Marketer work for super affiliates I’m a affiliate for warrior Plus as well I sell there products and I’m a affiliate for mode phones they pay you 900 min to 5,500 a year to use them they pay in 16 diff ways IV been trying to fix my credit just ran out of money lost my job to not being able to get to class to get recirtifies in cpr self defense and first aid meds I did take care of my 29nur old nephew he’s a
scitsafranic I would love to get a 10,000 loan min ideal loan would be upwards of 45,000 inwich could pay a little extra to the company building my web page to add a couple more funnels for extra traffic through different search engines like Bing Yahoo Foxfire older ones that people forget about the people still use I can also buy stickers car wraps and put a couple people on payroll to drive the cars around with my company on them phone number and website to possibly get a couple nice Chromebooks and I have access to very very powerful online applications through my fillet program through the super affiliates the viral link through wire Plus is like 2500 funnel to act as a virus through all the search engines and you can have 10 campaigns at the same time running through everywhere Facebook YouTube Twitter Google I can beast up my internet here at the home base business I’m also getting ready to get a couple applications through the affiliate program three of them can make up to words that say 2500 a day $10,000 a month you won’t even pays homage 1,000 a month in the process of getting trained and that one so I would not have a problem paying even a $50,000 business loan back I’d have no business plan everything’s just in my head muscle I went to school for entrepreneurship and ask for University at the forest Business School for about 13 months until my computer blew up I don’t know if this will help but I’m a fifth generation business guru my mom and a cash advance place her dad and a TV CB place in the 80s my cousin Chris and two Sprint stores and my other cousin has his own car shop where he put speakers in the alarm systems and stuff so I’ve been around business my whole life so if you were going to take a chance on somebody I can probably have your money back within a couple months fix my credit at the same time again had to credit helpers helping me fix it I just got behind doing painless and they canceled my help Southern crossroad whenever since I was sleepless nights a lot of bags and eating my eyes and a lot of stress on how I’m going to pay to get my bills going paid so you’re doing the table so I’m ready willing and driven I can guarantee you have to learn back and just a couple weeks cuz my boys to make 10,000 a week with all this fill it programs I am in and I have nothing but the best training me they’re all multimillionaires so I’m pretty confident even $100,000 loan would have no trouble paying it back it’s been six seven months I’d be paid back with perfect credit on my end so take a chance on someone like me and I won’t disappoint you I got nowhere to go but up all the training to drive I want you to do it have more driving 10 oh yeah my website is called illusions treasures is everything on is going to make you money for a better person or better your life ….
Wow, sounds like you have a lot going on, Dustin! Thank you for sharing your thoughts and for finding our blog resource center helpful. I think you would benefit from reading Your Guide To Getting A Personal Loan While Self-Employed. I also think you might benefit from the information you will find in the blog titled: Which Is Better: Co-Signed or Joint Personal Loans.
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Best of Luck and Have a Great Day,
The AssessmentOption Team