Requirements for a Small Business Loan
If you are considering applying for a small business loan, one of the first steps you must take (after considering the various providers) is to get your documentation together. Small business loan requirements vary by lender, though there are some basic elements, such as identification, that will be common for every loan provider.
Requirements for a Small Business Loan
The Small Business Association (SBA) has a wealth of information available to current and potential startup owners, not least of which includes a checklist for those preparing to apply for a small business loan. Though the information available through the SBA does not include lender-specific requirements (there is simply too much variance between lenders), it does give an overview and a summary of the standard requirements for small business loan applicants. These requirements include information about resumes, your personal background, personal and business credit reports, financial statements and more. To view the checklist, please visit www.sba.gov/content/business-loan-checklist.
Get Your Credit Score in Shape
Many lenders use your credit score as the predominant factor in approving your loan – even those who that don’t rely on it will consider it in some fashion. Take the time to review your credit report and dispute any discrepancies. Pay down any existing debt and consider open credit lines. Anything you can do to increase your credit score will help.
Get Your Paperwork Together
Though the requirements for small business loans vary by lender, every lender will require some information from you. Your most recent three months of bank statements, proof of monthly expenses (such as rent or your mortgage), and proof of employment are all quite common. To save time and expedite the loan consideration process, we recommend that you pull together your paperwork now. That way, you won’t need to scramble when the lender asks for it.
Have a Solid Business Plan
To get the best loan possible, you’ll need to present a solid business plan that shows not only a great idea, but also a great plan that will prove your business idea is profitable. Your plan should detail your proposed service or product. In particular that section, make sure to detail why your service or product is relevant to the market – what need are you fulfilling and how does your business satisfy it uniquely? Describe your proposed pricing strategy and detail how it will prove profitable. Make sure to include projected revenue as based in solid fact and research. Remember, you are not only describing your business, but also selling it to the lender – this is your opportunity to do so.
