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 are likely to ask for 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 is also helpful to have a detailed analysis of how you plan to spend the money you are applying for the loan.
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 for and approve. If you have poor or very little credit, we recommend that you look for short-term loans, which are set up similarly to medium-term loans, except that they are shorter and offer smaller amounts of principal. You are expected to return it in the short term, usually 3-18 months.
Hopefully, you will be able to return everything in a short amount of time. As with larger loans, you are expected to show that your business plan will be good enough to guarantee a profit. The good news about short-term loans is that the qualification process is less difficult, so you have a better chance of approval. Just keep in mind that the interest rate will likely be higher if your credit is not great.
If you are just starting out, you may also want to consider start-up loans. These can have interest rates that range between 7% and 30%, with terms of one to five years. To apply for a small business start-up loan, check with private lenders. A start-up loan could also serve as a precursor to seeking additional financing from venture capital groups or “angel investors.” If you can create a really unique and attractive 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 will likely be asked to select a reason why you need the money during the application process. Viable reasons include:
• Buy new or used equipment for your business.
• Purchase of inventory to sell
• debt refinancing
• Hiring new employees
• Creation of a “bridge loan” for the construction project.
• For taxes
• Another reason
If you have another reason why you need money for your small business, you may need to enter a specific reason. The more details you can give about your business plan and how exactly 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 a BBB accredited company and has a 95% approval rating!
