If you’re getting ready to apply for a loan, you’ll want to meet all of the qualifications required to apply. Depending on the loan provider or company you plan to apply to, as well as specific guidelines that go into funding arrangements for your business, different rules may apply. Make sure you’re ready by meeting all of these qualifications.
The lender requirements may indicate that you must set aside time for financial planning. The application process is time-consuming, so it’s best to have what you need ready. This way, you can expedite the process as much as possible.
Moreover, considering what lenders are looking for will give you the best roadmap to success. Strive to obtain the following considerations before you apply. In doing so, you’re meeting the expectations of potential lenders, which means you can get your small business loans faster. Let’s dive in.
Credit Score and Small Business Loans
For most loans, having a decent credit score is part of the deal. Maintain a score of 690 or more to qualify for small business loans. There may be some flexibility in credit score qualifications depending on who you work with. In some cases, you can get away with a score of 550+.
Your Annual Revenue
Lenders will only agree to work with you if you’re bringing in an annual revenue that meets their expectations. Some lenders require as much as $100,000 in annual revenue. The minimum for large banks is even more. Without sufficient yearly revenue, you’re likely limited to alternative funding options such as invoice factoring.
Years You’ve Been in Business
Whether you’re applying for a small business loan from a bank or an online alternative, there will be requirements for the length of time you’ve been in business. The terms are more lenient for alternative online options, but make sure you have at least a year under your belt before applying. Some banks require a minimum of two years.
Your Industry and Business Size
You might consider your company to be a small business, but there are varying definitions as to what a small business actually should look like to receive certain loans. Make sure that you meet the requirements for these options if you plan on receiving funding from traditional means and that you’re working in an industry that is eligible to obtain small business loans.
A General Proposal
Your lender will want to see your plans for the money they lend you. Showcase in writing how you’ll utilize the loan money and your repayment plan. The clearer you can make your proposal, the better off you’ll be at securing the funds you need for small business loans.
Getting Everything Ready
To get the loan money you need, you’ll have to meet the requirements of the lenders you’re considering working with. Before you reach out to them, get everything squared away ahead of time. This way, you’re set up for success and are more likely to secure your small business loans.
