How to Prepare for a Small Business Loan

You’re finally ready: You’ve determined the time is actually right to apply for a small business loan. However, just like becoming profitable has a lot to do with that pre-launch work, getting good terms on a loan has a lot to do with how well you’ve prepared to apply. Lenders want a holistic view into the financial health of your business. They’re counting on you to follow through with your “IOU” — and so they need some information to evaluate your trustworthiness to pay back what you borrowed. That’s why prior to diving into the application process, you’ll need to have:

  1. A clear understanding of your credit histories (personal credit score and business credit score)
  2. Financials (income statement, cash flow statement, balance sheet)
  3. Tax return(s)
  4. Deposit history

Lenders rely on this information to evaluate:

  1. What is the financial health of your business?
  2. How risky is it going to be for us to lend to this company?

These factors not only impact your likelihood of getting approved for a small business loan, but the amount you’re
approved for as well as your interest rate.

Got everything in order? We’ll show you how to apply for a small business loan online in the following installment.

Samantha Novick is the Social Media Manager at Bond Street — a company focused on making small business loans simple, transparent and fair. Check in next week for a new video on how you — as a creative entrepreneur — can take advantage of small business loans to grow your business.

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