At mySMBscore we are in the business of helping you make confident financial decisions that work for you and your financing needs. We’re excited that you’re taking this time to research and find the best options for you.
Business owners’ needs and opportunities can vary dramatically. These differences can also be seen in business loans. To get a business loan, you may want to match your business needs with what you can qualify for. When you understand your business loan options and do your best not to rush the process, you can boost your chances of loan approval. Keep reading to gain insight on how to apply for a business loan in 5 steps. Plus, we’ve also included other information that can be beneficial when researching business loan opportunities.
A business loan can provide the financial backing necessary to expand operations, cover expenses, and purchase equipment or inventory. Applying for a business loan can feel like a daunting process. If you’re looking for a reference point on where to start, mySMBscore is here to provide some added clarity on how to apply for a business loan in 5 steps.
There can be an overwhelming amount of loan options available. So, pinpointing why you need financing can be a great starting point when choosing the right business loan for you. Here are a few common scenarios:
Determining your eligibility for a business loan is dependent on the lender. However, generally, there are three things lenders may consider when reviewing business loan applications:
Considering these items can help you gain a better understanding of what business loan options you are eligible for. You can discover what you qualify for by utilizing mySMBscore at any time.
No matter the business need, take advantage of the mySMBscore platform to compare business loan options.
Once you have an idea on what financing options are available to you, you can start gathering the required documents. A lender will likely ask for these items:
If you’re unsure what documents are required, you can contact the lender before applying to confirm what documents they’ll need.
The final step is submitting your business loan application. Depending on what lender you can submit your application online or in person.
If your loan is approved, the lender can send a loan agreement for you to sign before issuing your funds or a line of credit.
Any legitimate small business owner can apply for a small business loan. It is relevant to know that you may have a better chance at accessing better loan rates and terms if your business is generating revenue and you have a good credit score.
Depending on the lender, a small business loan application may have special requirements. Every lender uses certain criteria to evaluate your eligibility. Lenders look at bank statements, assets, financial statements, debt service coverage ratio, and personal and business credit history. Lenders may also want you to have a sound business plan.
Once you have completed the first four steps of how to apply for a business loan, you can begin the application process. The loan application process can be very straightforward for a business loan.
As you shop for the best terms and conditions for your situation, you should consider how much money you need to borrow and how much time you need to repay the loan. Once you pick the best option, you can receive a lump sum payment in your bank account within a few days. You’ll start repaying the loan at a fixed interest rate every month until the loan is paid off.
The mySMBscore platform allows business owners to access personalized business loan offers with just a little bit of information, saving you time and money. Plus, our platform allows access to score components. Understanding these can give you a competitive advantage when applying for business loans. Whether you’re ready for a loan or just trying to ensure financial readiness for when it’s time, mySMBscore can help.
Each lender will have their own set of business loan requirements. Items that lenders may find particularly noteworthy are your credit history, provided documents, and assets.
Having a strong credit history can be crucial when applying for a business loan. Most lenders require a minimum credit score between 600 to 680 for a small business loan. If you apply for a business loan from an online lender you may be able to find flexibility around this requirement. Online lenders reviewing loan applications often look to the business’ revenue for loan eligibility.
Lenders may require specific documentation for business loans. The documentation needed can vary based on the type of loan. You may need to provide income tax returns, your credit score, bank account information, a business financial statement, and personal identification such as a driver’s license.
There are four main types of loan documents you may need to provide when seeking business financing, including:
When looking to apply for a business loan, many business owners are concerned with providing collateral for their business loan application. Sometimes it can be a lot easier getting a loan when you’re willing to put up some kind of collateral. Business loans with collateral can help secure the money you’re borrowing, potentially with better terms and conditions. However, a collateral loan could also mean surrendering a valuable asset if you fail to repay your debt.
Not all lenders require you to put up collateral to receive a business loan. For the lenders that do, you may want to provide a list of assets on your loan application. Lenders may prefer to see assets that they can easily use to cover your loan payment obligation if you’re unable to pay off the loan. Assets can include business real estate, inventory, or equipment. It may also be important to know that collateral can include funds from accounts receivable.
Before applying for just any business loan, you want to spend some time doing your research and deciding what terms and conditions you’re comfortable with. Take the time to shop around and review all of your available options. Business loan options are diverse. Additionally, if you need more clarity on what items are needed for your loan application, you can reach out to the lender directly before applying. Utilizing mySMBscore provides additional clarity on what the business loan requirements are for each lender.
Once you’ve decided that you need working capital for your business, you usually don’t want to wait long to get it. Unfortunately, loan providers sometimes work on a different timeline than you. So, it can be very helpful to understand how long it can take to get a business loan. From the time you submit your loan application to the time you get your loan money, what will that look like or you?
The timeline usually depends on what type of financing you’re interested in getting and what lender you’re working with. No one can say exactly how long it will take you to get your business loan. If you are able to be flexible with the timeframe and wait a bit longer for the funds, then you may have more options available. Through mySMBscore, you’ll have access to a list of comprehensive lending options available to you in seconds.
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