Expanding or making the necessary investment to improve your business may require an injection of capital. There are multiple ways to get some more cash flowing, but the most common is to apply for a small business loan. While these loans can be great for kick-starting the growth of your business, you need to be smart on when to apply for them, be aware of the requirements you’ll have to meet, and choose your lender carefully in order to maximize growth.
What to do before applying for a small business loan?
Before you apply for a small business loan, you need to make sure it would be the right move for your business:
These are the kind of question you need to be able to answer before applying for a small business loan. To help you with your answers, check the following articles that will help you calculate your potential ROI, know how to obtain your credit report, know how to check your credit score, and how to open a business bank account. You also need to make sure you have a solid idea on how you will turn the loan into business growth. You may want to check out our business loan calculator as well, which can help you calculate the monthly payments that you can expect to pay.
Make sure you meet the lender’s requirements
Every lender has different requirements, but you need to be aware of the most common ones you need to meet to apply for a small business loan:
- Number of Months or Years in Business- Typically, a business that has just been started is much less likely to be approved for a business loan. You will need to provide proof of how long your business has been operating.
- Type of industry that you operate in- Have in mind that some lenders have restrictions for some specific industries. Gambling businesses, pawn shops, and nonprofits may be in the “blacklist” for certain lenders since they consider them high-risk industries.
- Your Personal Credit Score- It may seem surprising to require a personal credit score for a business loan, but lenders want to know that you do keep up and don’t fall behind on your personal financial commitments. If your credit score is low, you need to research how to increase your credit score to better your chances of being approved for a loan.
- Your Business Credit Score- Lenders will also want to know your business credit score to make sure you are paying any outstanding business loans or leases on time. If you don’t have much business credit or your business credit is low, you can learn ways to increase your business credit quickly.
- The annual sales of the company– Rising sales will be considered a positive sign by lenders, and for some, this is one of the more important business loan requirements. They can calculate the loan amount you are eligible for by using your annual sales figure.
- The collateral you put up- Some lenders will require that you put up some type of collateral (in the form of machinery, equipment, or other business assets) that they can seize if you fail to pay off the loan.
For detailed info on each of these items, check this article with the common requirements for most lenders.
Gather all the required documents
Not only does every lender have certain requirements to be met, but they also have certain documents you must submit in order to be considered for a small business loan. This again varies by lender, but here is a list of documents that you may need:
- Bank Statements
- Tax Returns
- Proof of Business Registration
- Business Licenses and Permits
- Form of ID
- Employer Identification Number (EIN) provided by the IRS. If you don’t qualify for an EIN or an SSN, some lenders work with applicants with only an ITIN.
- Financial Statements
- Accounts receivable and accounts payable
- Details of other loans you may have
- Proof of collateral
- Business plan
For detailed info on each of these items, check this article that includes a list of documents required by most lenders to approve your small business laon.
Start the Loan Process
In order to start the small business loan process, you need to find the lender that is right for you. You need to find a lender that is experienced giving loans to businesses in your industry, will understand your business goals and objectives and is able to offer you the best interest rates and loan terms. The type of lender you seek will depend on what type of loan you need, whether it be a long term loan, low-interest rate loan, or a lender for those with lower credit scores.
What to do when you are approved for a small business loan
If you are lucky enough to be approved for a small business loan, there are a couple of things to remember to do moving forward:
- Make your payments on time. That’s the only way you’ll be able to improve your credit and access more and better business and financing opportunities in the future. You can learn here the best strategies to pay off a loan.
- Invest the funds wisely for the purpose you initially intended
- Keep track of the ROI you are obtaining after the loan and make sure you meet the ROI you initially projected
- Remember that your loan can be key to your success and many business owners like you have exponentially grown their companies using the right financing. Check it for yourself reading these success stories.
Business Loan Timeline
Every business owner will approach business loans differently, but here is a rough timeline that you can expect when preparing to apply for a business loan:
Camino Financial Small Business Loans: why are we the best option for you?
Everything we have told you so far applies to most lenders, but not to Camino Financial. The benefits you will get with us and the simplicity of our process set us apart from most lenders. Check below some of these benefits:
- We have fewer requirements- Camino Financial has fewer loan requirements than most traditional lenders. For example, our applicant don’ need a credit history, collateral, or SSN (we accept applicants who only have an ITIN)
- We require fewer documents- We require significantly fewer documents during our loan application process: your bank statements, proof of business registration and business licenses are usually all we need.
- We match you with the best financing options- We always strive to match business owners with the right financing option for them whether it’s a microloan or a small business loan, and we make sure they will be comfortable with their monthly payments. These are fixed and never change so you can avoid unpleasant surprises.
- Our application process is convenient and quick- Our loan process is easy and takes place 100% online. And while most lenders take weeks or even months to respond to loan applications, we have a very quick turnaround time (between 2 and 10 days) so you can start making use of your business loans right away.
- Access more capital as you work with us- After just 9 months making timely payments, you can graduate to a second loan for a higher amount at a better rate. And if at any point you decide to pay off your small business loan early, there are no prepayment penalties.
- No hidden fees- We only charge you a closing fee. We have no other processing fee or late-payment fees.
- Excellent customer service – A bilingual loans specialist will be assigned to you and you’ll receive personalized assistance throughout the process.
- We provide you with ongoing education- You’ll have access to tools, resources, and exclusive webinars: our goal is that you improve your financial performance.
And the list goes on. Learn here everything you need about Camino Financial small business loans and see for yourself the real value we can provide to your business.
At Camino Financial we are driven by our motto: No Business Left Behind
We hope you consider using Camino Financial for your next business loan. If you are ready to take the first step to grow your business, simply request here a loan quote which won’t affect your credit. We look forward to hearing from you!