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How to Get a Business Loan
Getting a business loan is similar to other loans you might have gotten, but there are a few additional aspects that come into play.
Step 1: Determine Why You Need A Loan, and How Much Money You Need
There could be a number of reasons why you’d need to borrow for your business, from having enough working capital to meet your operating costs, to purchasing new equipment or refreshing your retail or office space, to expansion. As for how much, ideally, you want to figure out the “just right” amount so you’re not overextending yourself, but you also don’t want to come up short.
Step 2: Figure Out the Type of Loan That’s Best for You
Do you want a loan with fixed payments and a long period of time to pay back? Would you be better off with a line of credit you can pull from as needed? How do you feel about putting up collateral? Does your credit and business situation put you in a good position to qualify for competitive loan options? These are just a few of the questions to ask yourself.
Step 4: Review the Qualifications to See If You Meet Them
Every lender and type of business loan could vary when it comes to what’s required for approval. It may be a particular credit score, or having a certain amount of business income. Make sure you meet at least the minimum requirements before you apply, so you can save yourself time and effort.
Step 5: Gather Your Documentation and Apply
Once you find a lender and loan that works for you, make sure you have everything you need in front of you so you can complete the application. This can include business banking statements, tax returns, personal information, and more.
What You Need to Qualify for a Business Loan
Getting a business loan is possible even if you don’t have perfect credit or are a fairly new business, but qualifications vary depending on the loan program and lender. That said, there are a few eligibility factors for business loans that most loan programs have in common.
