How To Get Business Loans

Almost every startup has had to get a business loan at one point or another. Small business loans offer a range of benefits for business owners. Business loans can help grow your business, be used to fund research and development, help you expand to new territories, improve marketing and sales tactics, and much more!

However, while no one can deny the tremendous aid a business loan can do, figuring out how to apply for, and successfully receive, a business loan is a whole other story. Here is all you need to know about business loans and how to get one for your business today!

Types of Business Loans

Before setting out to apply for a business loan, you first need to figure out which type of loan is right for you. The kind of business loan you apply for can heavily depend on what you intend to use the funds for. Loan options vary depending on need, length of the loan, size of business, as well as the specific terms of both the bank and loan itself.

Other factors can also contribute to the kind of loan you can expect to get such as whether the business has existing capital and assets or if it is just starting out. Loans for small business include:

Small Business Line of Credit

A line of credit loan is extremely useful for helping manage a businesses’ cash flow or unexpected expenses that can arise such as repairs, lawsuits, and so on. There is normally a fee for setting up a line of credit and funds will typically have a cap out level. These types of loans also charge interest that is usually paid monthly.

Small Business Term Loans

Term loans are set for a specific dollar amount and normally used for business operations, expansion, or capital expenses. Term loans are either secured or unsecured. Interest rates for term loans can also either being fixed or variable depending on the parameters of the loan. This loan is great for businesses in need of capital for growth rather than debt.

SBA Small Business Loan

Many banks offer these low interest-rate loans for small business because they are backed by the U.S. Small Business Administration (SBA). This means that both the interest rate and repayment terms are much more manageable than other types of loans. SBA loans range from $30,000 all the way up to $5 million.

Steps For Getting A Business Loan

Applying for a business loan may seem like a daunting process, epically if it is your first time. Business can apply to financial institutions, such as credit unions, or banks for commercial loans. Before making the leap to go through the loan application, make sure you follow these essential steps:

1.  Determine Amount 

The first thing you have to do is decide the exact amount your business needs. Not only do you need to determine the amount you also need to determine the reason. You should be able to clearly show to the bank or financial institution why your business needs the loan. It is important to prepare financial statements beforehand.

2. Visit a Small Business Development Center 

Most cities, particularly by Universities, have a local chapter of the Small Business Development Center (SBDC) which is apart of the U.S. Small Business Administration (SBA). SBDC provides extensive resources and support for business owners looking to apply for loans and can help you with the application process.

3. Credit Score

Before applying for a loan, it is essential to review your credit score for both the business and you personally. Request a credit report and make sure there are no errors in your credit history as this could affect your application.

4. Review Options

Research all available loan options and what best fits your business goals and objectives before applying for a loan. Apart from national commercial banks, smaller regional commercial banks may give you a better chance, so it is essential to review all options. Non-bank institutions, like credit unions, are also potential alternatives.

5. Prepare Business Plan & Presentation

You have to present a compelling case to a loan officer to give your loan application a chance. Prepare an in-depth business plan and be sure to include an ‘Executive Summary.’

Most loan officers will read the Executive Summary and decide from there whether or not they are interested. A short presentation with visual aids and highlighted financial information is also a great way to wow any loan officer and present your application in a concise and organized manner.


Business loans are a crucial and fundamental part of any business. Whether you are a start-up business or a seasoned one, applying for business loans can be a stressful process. Ensuring that you have a clear grasp of your financial statements and goals is essential. For more information on business and loans, visit the experts at today!