Help! I Need A Business Loan – How To Prepare

BY: Bridget K. Krueger


As a lender, I see everything from startup companies to established companies.  When it comes to applying for a business loan, there are five things that every owner should do to secure the best loan.  It’s important to show banks that lending to you is safe and advantageous for you and the bank.

Business Plan

This is really the first exercise that a business should tackle.  Your business plan needs to be detailed.  You should include a summary and complete description of your business idea.  Other key items are a thorough market analysis, a well-planned strategy and what your future financial growth potential will be.

It’s important that you show the lender that you understand your business and that you will prosper.  This is how you will pay back the loan, so the lender needs to feel confident that you are on top of your business.

One of the most important parts of your financial plan is to include assumptions and notes about your numbers.  Include as much information as you can to show how you got to your numbers and why those make sense.  If you are an established business, but going to a new lender, historical financial data for the past 3 years is helpful.   

Fix Your Credit Score

Your personal credit will be pulled by the lender.  It’s important to check this prior to applying for a business loan and cleaning up any negative items. 

If your score is low (under 650) then it’s important to pay down credit card debt, take care of any collections or judgements. 

If there are errors on the report, then it’s important that you contact the Credit Bureau to fix them.  This can take up to 30 days, so it’s critical to get this done prior to applying for your loan.

You should know where you stand credit wise, instead of having a surprise after applying for your loan.

Get all your paperwork in order

Getting your paperwork in order and having it ready when you meet with your lender will make the process go much faster. 

Items that the lender will/may request are typically 3 years of business and/or personal tax returns, articles of incorporation, business licenses or registrations, commercial real estate documents or leases, contracts with suppliers, and any other pertinent information.

It can’t hurt to be over-prepared, so if you don’t know if they’ll need a document, it’s a good idea to have it ready to go — just in case.

Choose the appropriate loan type and lender

Determining what you need the money for will help determine the loan type that makes the most sense.  For example, if you need new computers or a new piece of machinery, then equipment financing might be the right option.  If you need help with cash flow to cover payroll while waiting for your Accounts Receivable to come in, you may need a Line of Credit

Figuring out the loan you need will help you narrow down possible lenders. For example, small businesses may have better luck getting loans from a local community bank. A 2015 Federal Reserve survey shows that, since 2006, there has been a steady decline of big banks lending to small businesses which means you may have more luck thinking outside traditional lending.

Being prepared with all of the information needed for your loan is a large part of getting approved for a loan. 

Preparation alone can’t guarantee that your loan will be approved, however, putting the time into research prior to applying for the loan will give you the best chances.

If you are ready to move forward, reach out to a Business Lender today!

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