How To Apply For A Business Loan
Ready to take the next steps in your business? Whether you want to expand operations or need new equipment, get the necessary funds by applying for a business loan.
1. Determine Your Needs
If you are considering a business loan, ask yourself this question first: Why do you need financing? You don’t want to take on any unnecessary debt or jump into a loan that won’t pay out in the long run. Like every decision in your business, take the time to consider your options.
- Buy new equipment. Ready to expand your operations? A traditional loan would provide you a lump sum that you can pay back over time while reaping the benefits of new profits from your new equipment.
- Establish a new business. Have a business idea and need funds to get it off the ground? While a traditional loan will be tougher to get since you aren’t established yet, you can still look into a business credit card or personal loan.
- Cover day-to-day expenses. It happens. We experience temporary, unforeseen pitfalls in our cash flow. To secure a safety net, consider a business line of credit that is flexible funding to cover payroll and unexpected repairs.
After you determine your funding needs, you can continue the application process.
2. Do You Qualify?
Not every business can apply for a loan. To be eligible for a business loan, most lenders will consider these factors: your business and personal credit score, how much money you make, and how long you have been in business. Each lender has its own qualifications.
3. Shop Around!
In this situation, you are the customer. Shop around to get the best deal for your business. Different lenders can offer different loan products that suit your business needs. When choosing your loan products, make sure you choose the one that offers the best rate and repayment terms and can provide the funds quickly. You will also need to figure out what fees a lender may charge upfront. Don’t move forward with a lender without getting all the information first.
4. Gather The Paperwork & Apply
You have a plan in place, and you are ready to apply! When you apply for a business loan, make sure you have these documents and information:
- Financial statements
- Annual revenue
- Business owner details - Social Security number, address, names, etc.
- Information about your collateral
- Business documentation – Business license, articles of incorporation, etc.
5. Review The Loan & Get Funds!
Before signing on the dotted line, review everything. Review the amount you are asking for, the term and repayment requirements, the interest rate, and how quickly you will receive the money. If you need money now, you are not going to be able to sign with a lender who takes their time processing your application.
You know your business best, so pick a loan option that fits your business needs. Learn more about business essentials here.