How to Get a Business Loan
Are you getting ready to fill out a business loan application? You’ll be better prepared by going through these five steps beforehand.
Decide how much money your company needs.
Be careful not to underestimate how much financing your small business actually needs. It can leave you without enough working capital to manage your day-to-day running expenses. But on the other hand, be careful not to overestimate. Making sure to have a carefully crafted budget, supported by reasonable financial projections, will go a long way to showing potential lenders your financial savvy.
Know how you stack up.
Lenders look at a number of factors to help them determine whether or not to approve your financing application.
Credit Score: Generally acceptable credit scores range from 650 – 700. However, many lenders prefer applicants with scores in the 700 – 800 range.
Time in Business: Lenders typically only consider providing unsecured business lines of credit to businesses that have been in business for at least one year and have a reliable income record.
Cash Flow: The higher the operating cash margin, the better chance there is for a business to survive slower market conditions and ensure long-term survival and growth. Cash flow often figures heavily into a lender’s decision. It provides a gauge as to whether or not the small business will be able to successfully repay the loan.
Find a lender.
Research different types of business lenders to help determine which is the best fit for your small business. Learn more about the three different financing options available through The Business Backer.
Prepare your paperwork.
You’ll want to have the following paperwork ready to submit when you apply:
Business bank statements
Copy of your driver’s license
Previous year’s tax return
Options for Businesses With Less-Than-Perfect Credit
Having less-than-perfect credit doesn’t mean a business can never get funding. There are a number of financing options that can still potentially work.
They’re more likely to lend to local small businesses since they themselves are typically local establishments.
Find a Co-Signer
A co-signer can help you get approved by accepting responsibility for your loan in the event that you cannot pay it back.
Putting up valuable property or equipment as collateral can help your approval chances for a secured loan.
What Does the Business Backer Offer?
You may find the right financing fit with any of the three funding options available through The Business Backer. If any of the them look right for your business, contact us to speak to a Funding Advisor.