To get a business loan, identify the purpose for the loan, determine the loan amount your business needs, perform thorough research and calculate financial projections, find out your credit score, and choose a lender that caters to your needs, recommends Forbes. Submit all necessary forms and documents to the lender, including a business plan, the resumes of all business owners, profit and loss statements, and three years of tax returns.Continue Reading
Start improving your relationship with the lenders before applying for a loan to earn their trust, suggests Forbes. Evaluate if you're taking out the loan for good purposes, such as buying new equipment or property, rather than bad purposes, such as obtaining unnecessary business assets.
Many lenders provide loans to borrowers with credit scores ranging from 700 to 800, notes Forbes. It's important to maintain personal debt payments below 33 percent of your total monthly income to get approved. Moreover, study the risk assessment of your particular industry. A high operating cash margin gives your business an edge, a cash flow indicates a company's ability to pay off the loan promptly.
Commercial banks provide traditional loans, while nonbank lenders offer loans with relatively higher rates, according to Forbes. Local community banks and other region-specific lenders give loans to businesses operating in certain geographical areas or industries. Consider applying to microlenders if you need a loan below $10,000.Learn more about Credit & Lending