To be eligible for a loan from a U.S. Small Business Administration-approved lender, you need to meet a lot of standardized criteria - all of them listed on the SBA's website.
However, you'll need to do more than just meet the bare minimums, no matter what lender you're applying to. Listed below are four tips for making you and your business look strong when applying for small business financing.
If you can excel on these points, you can be sure your business will look as healthy as can be in the eyes of the lenders.
Have your documents straightened out and ready to go
During the application process, you're going to be dealing with paperwork constantly. So you'll be putting your best foot forward if all your paperwork and financial documents are ordered, verified, and double-checked before the process even begins - that way, you can be sure you won't have any hiccups. Using software to help you keep your files digitized and verified is never a bad idea, in this regard.
Keep your credit scores - personal and business - strong
Besides having all the necessary criteria met and documents in order, the most important factor deciding whether or not you'll receive small business financing support is your credit scores. So if you know you'll be applying for a loan in the future, do anything possible to build and solidify them beforehand. Pay equal mind to your personal and your business score, too - most lenders will be taking both of them into account when making a decision.
Have a plan for the loan
If you're asking for financing support, then you better have a plan for what you're going to do with it. The reason itself likely won't have much of an impact on the eventual decision - it could be equipment, additional real estate or anything else - but you're going to need to illustrate that you have a definite plan for what you're going to do with the funds you're borrowing.
Spread out your search
All banks have different methods that determine who they loan to and how they do it. So make sure you're always considering multiple options when you're on the hunt for a loan, just in case you're not a good fit with one or more places that you end up applying to. Check out banks, credit unions and direct lenders like OnDeck to see which can offer you the specifications and standards that fit the needs of your business most comfortably.