A loan can help a small business unlock many opportunities, including equipment purchases, obtaining or upgrading an office space, and expanding staffing. This article goes over the strategies that can enhance a business’s chances of getting approved for a business loan.
Know Your Options
There are many different types of lenders out there, and some might be better fits than others for your needs. For example, traditional banks tend to cater to well-established businesses, while alternative lenders and credit unions may be more willing to work with newer businesses. The Small Business Administration (SBA) backs certain loans and may be able to direct you toward lenders that are a good fit. You might also find assistance from SCORE, which is an organization that supports small business owners.
Know What You’re After
It’s also important to know the type of business loan you’re after. For instance, a professional loan is useful for doctors, lawyers, and other professionals starting their own business, while equipment loans facilitate the purchase of equipment (as the name suggests). Moreover, lenders will want to know that you have a good plan for the funds.
Make a Strong Showing
No matter the lender you’re working with, your chances of obtaining a business loan will improve if you display the following:
- A rock-solid business plan. (You can learn more about writing one with the SBA’s guide.)
- A credit history that reflects financial responsibility.
- The ability to contribute some of your own money toward the purchase that you’re seeking financing for.
- Assets you’re willing to put up as collateral.
You can further prepare by asking a potential lender’s loan officer what documentation their application calls for. That way, you can gather the documents you need ahead of time. Required documents will vary from lender to lender, but you can get a good idea of the paperwork you’ll need by checking out the Minority Business Development Agency’s primer on the subject.
Interested in a loan or other financing option for your business? Don’t wait to get in touch with the financing professionals at Evolt Capital. We’d love to help!