Learning how to apply for a small business loan can be difficult, even if you want to apply online. Different lenders ask for information in different ways, but having an idea of what they’re likely to ask of you so you can prepare is a step in the right direction. All lenders want to see your company’s financial statements and your own credit report. It’s also helpful to have a detailed analysis of how you plan to spend your loan money.
Regardless of anything, the longer you’ve been in business and the better your credit score, the more loans are available to you and the easier it is to apply and be approved. If you have poor credit or low credit, you’ll want to look into short-term loans, as they are set up similarly to medium-term loans, except they’re shorter and offer smaller principal amounts. You are expected to pay it off in a short time, usually 3-18 months.
Hopefully, you will be able to pay it all off in a short period of time. As with larger loans, you are expected to show that your business plan will be good enough to guarantee profit. The good news about short-term loans is that the qualifying process is less difficult, so you’ll have a better chance of approval. Just keep in mind that the interest rate will probably be higher if your credit isn’t great.
If you’re just starting out, you may also want to look into start-up loans. These can have interest rates ranging from 7% to 30%, with terms from one to five years. To apply for a small business loan for a start-up, check with private lenders. An initial loan could also serve as a precursor to seeking additional funding from venture capital groups or “angel investors.” If you can create a really unique and compelling marketing plan, consider crowdfunding websites as well.
Reasons to Apply for a Small Business Loan
When applying for small business loans from online lenders, you’ll likely be asked to select a reason you need the money during the application process. Viable reasons include:
• Purchase of new or used equipment for your business
• Purchase of inventory to sell
• debt refinancing
• Recruitment of new employees
• Creation of “bridge loan” for construction project
• For taxes
• Another reason
If you have another reason you need money for your small business, you may need to enter a specific reason. The more detail you can give about your business plan and exactly how you are going to use the money, the better.
So which website should you go to if you want to apply for a small business loan? It is a good idea to start with US Business Funding. It is Business Accredited with the BBB and has 95% approval rates!