Follow these five steps to get a business loanFollow these five steps to get a business loan

Follow these five steps to get a business loan:

  1. Check your eligibility. You’ll want to know your personal credit score, time in business and annual revenue when applying for a business loan. Traditional banks and lenders approved by the U.S. Small Business Administration (SBA) will typically require scores of at least 670; online banks may have more flexible requirements. And many lenders require you to have been in business for at least one or two years, and show $50,000 to $250,000 in annual revenue.
  2. Determine what you need financing for. Most lenders will want to know the purpose of your loan. If you’re getting a business loan, it’s likely you want the funds to start your business, finance day-to-day operations or grow your current business. Your desired purpose will direct you toward the best lending product, such as an SBA loan, term loan, line of credit, invoice factoring or merchant cash advance.
  3. Compare business lending options. You have a couple of options when it comes to choosing a lender: You can choose a traditional lender, like a bank or credit union, or an online lender. Traditional lenders typically have more eligibility requirements but often have more affordable offers. Online lenders usually have more flexible requirements and quicker funding times, but it comes with more expensive options.
  4. Gather the required documentation. Before you apply, check with your lender to learn about the required documents. Prepping these documents beforehand can make for a more seamless process. It’s likely you’ll need to provide business and personal tax returns and bank statements, business financial statements, business legal documents and your business plan.
  5. Submit your application. Once you’re squared away with your documentation, it’s time to submit your application for the loan that offers you the best terms possible for your specific situation. The time it takes to hear whether you’ve been approved will vary by lender and by specific loan product, such as an SBA loan or business line of credit.

Leave a Reply