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By: rkapur
Read in 21 minutes

Business Loan Requirements: The Ultimate Guide

What are the most common business loan requirements you need to gather to start your application? Is there any way to prepare yourself and thus increase your chances of getting approved?

If you’re ready for the application process, you have better chances of the lender approving you. That means understanding all the requirements and the documents you will need to provide.

Apply for a loan with minimal requirements


How To Apply For A Business Loan

These are the basic steps to complete a loan application.

  1. Decide on a loan amount. The amount needs to meet your business needs in a range you can repay comfortably.
  2. Get the required documents before you apply. Typical documents include personal and business tax returns, ID, EIN, financial statements, business documents, bank statements, and SSN. Some lenders will accept ITIN if you don’t have an SSN.
  3. Select a lender. Search for a financial institution with business loan requirements you can meet. For example, no collateral to secure the loan, a minimum revenue that matches your business sales, or a minimum credit score.
  4. Apply for the loan. The majority of lending institutions allow borrowers to apply online, while others require you to apply in person.
  5. Complete basic information. All applications ask for personal and business information, like name, address, EIN, SSN or ITIN, phone numbers, business legal structure, and years in business.
  6. Fill in information relating to the loan. This includes the type of loan, loan amount, and the loan’s purpose.
  7. Submit the documentation. If the lender prequalifies you, they will ask for some additional documents. If you applied with an online lender, you’d be able to send them electronically.
  8. Sign the contract and receive the capital. The lender will send you a loan proposal. If you like it, just sign on the dotted line and wait to receive the cash.

10 Requirements You Need To Fulfill to Get a Loan Approved

These common business loan requirements will determine if you get approved for a business loan, so make sure you fully understand them before applying!

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The Number Of Years That You Have Been In Business

Most lenders have a business loan requirement of being in operation for at least two years.

This makes it difficult for smaller and newer businesses to get the funding they need.

Camino Financial only requires 9 months in business. We also have a loan for startups.

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The Type Of Industry That You Operate In

Some lenders may be unwilling to advance money to companies that work in specific industries or sectors.

This list could include gambling, pawnshops, real estate, cannabis, and adult entertainment.

Sometimes banks don’t lend to nonprofits either because they are dependent upon donations. If this source of income dries up, how will they repay?

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The Loan Amount That You Are Looking For

The amount of money you plan to borrow plays a crucial role in determining whether the bank will approve your application.

There are two reasons for the loan amount being among the most critical small business loan requirements:


Setting a maximum loan amount would ensure that there is a cap on the lender’s risk. Similarly, each lender’s internal rules would stipulate a floor below which it would not lend.

The reason is that every loan involves processing and underwriting costs as well as servicing expenses. These remain the same regardless of the size of the amount the lender advanced. Consequently, low-value loans can be uneconomical for the lender.

Cash Flow

The financial institution wants to be sure that your business could generate the required cash flow to repay the borrowed amount.

Before applying, you should work out the monthly installment that you can comfortably afford to pay.

Use a business calculator to arrive at your monthly installment. If you key in the loan amount, the payment term, and the monthly interest rate, our Business Loan Calculator will tell you your installment amount.


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The Use You’ll Give The Money

The lender would like to know how you’ll spend the loan; they might even have use-of-proceeds restrictions.

You should be ready to provide an explanation that covers the following points:

  • How will you use the funds?
  • Will your investment give you a good ROI?

The loan term should match the period over which you will generate additional income.

You don’t want to be in a position where you are repaying a loan that you took for an asset that isn’t generating revenue any longer.

You can’t use a business loan for personal expenditure.

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Your Credit Scores

Personal Credit Score

Most banks and financial institutions will take your personal credit score into account even when you apply for a business loan.

It provides them with information about how you meet your financial commitments.

If you are trying for an SBA loan or a bank loan, you stand a better chance of receiving a positive reply if your personal credit score is at least 650 or more.

Other lenders accept lower personal credit scores. Some, like Camino Financial, will even approve your loan even if you don’t have a previous credit history.

It’s possible to boost your credit score by 60 points in 60 days.

Business Credit Score

Many lenders will also check your business credit score to decide on your loan application.

Business credit scores range between 0 and 100, and it’s calculated by the three business credit bureaus: Experian, Equifax, and Dun & Bradstreet.

An excellent business credit score is above 80.

There are ways to build business credit quickly

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Annual Sales Of Four Company

Some lenders consider your sales to be among the more critical small business loan requirements.

Rising sales indicate that you will have the cash to repay the money you borrow.

With your sales, lenders can even calculate the loan amount that they will approve. For instance, a lender may be willing to advance between 10% and 12% of your revenue.

Although, if your profit margins are slim and most of your funds go towards buying raw materials and paying other expenses, you may not be able to get loan approval even if your sales volumes are rising.

One of the other critical business loan requirements is that your sales must be more than a particular threshold.

Some lenders stipulate that your company must have annual revenues of at least $100,000.

However, you can apply for a loan from Camino Financial if your firm generates sales of $30,000 annually or $2,500 a month.

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Legal Contracts And Agreements

Many lenders will want to know if you have any contracts and agreements with other businesses, like:

  • Contracts with suppliers
  • Partnership agreements
  • Corporate bylaws

All these documents help them understand if you are serious about doing business and what your present and future look like.

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The Collateral You Bring To The Table

Some lenders will ask for an asset as security, also be called collateral. If so, they’re offering secured small business loans.

The collateral assures them that they will not lose money if you default. If you fail to repay, they will sell the asset.

Some lenders don’t ask small business owners for collateral. If so, they offer unsecured business loans.

Our business loan requirements at Camino Financial don’t include the necessity of providing collateral.

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Debt-Service Coverage Ratio

The debt-service coverage ratio (DSCR) measures how much cash flow you have available to pay the principal and interest of a loan.

Lenders will expect your DSCR to be 2 or higher.

Here’s how to calculate it:

DSCR = Net operating income / Total debt service

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Debt-To-Income Ratio

The debt-to-income ratio (DTI) measures how much debt you have and if you’re able to pay for additional debts.

Lenders might also ask you to disclose all your other debts and to be current with them.

Lenders will expect your DTI to be 28% or lower.

DTI = Monthly debt payments / Gross monthly income

Choose An Alternative With Fewer Business Loan Requirements

Many small business owners get discouraged when they learn they have to arrange for documentation from various sources. This takes time and effort.

Fortunately, Camino Financial has minimal requirements!

  • You can apply with either ITIN or SSN
  • Your business needs to have been in operation for at least 9 months
  • We approve applicants with no credit history
  • A minimum annual income of $30,000
  • You just need to be current with outstanding debt

Check out the chart below to compare the list of business loans requirements asked by most traditional lenders and by Camino Financial:

Business loan requirements: other lenders vs. Camino Financial
RequirementTraditional LendersCamino Financial
Time in business✔️ (2 years)✔️ (9 months)
Your industry✔️✔️
The loan amount✔️✔️
The use you’ll give the money✔️
Credit Scores✔️
Annual sales✔️ ($100,000)✔️ ($30,000)
Legal Contracts and Agreements✔️
Debt-Service Coverage Ratio✔️✔️
Debt-to-income ratio✔️

We have minimal business loan requirements.

Apply now!


approved business loan application

10 Documents Required for Small Business Loans

Here are the most common documents lenders will require.

As you read, keep in mind that you can cut this list in half (saving yourself the time, paperwork, and the occasional headache) by approaching an alternative lender like Camino Financial.

It’s a great idea to keep digital copies of these documents and save them on a cloud drive like Dropbox or Google Drive. This way you can access them quickly anywhere, anytime.

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Bank Statements

Your lender will want to know how much money you deposit into your bank every month and how you use it.

They will also look for:

  • The official name of your business on your bank statement (you shouldn’t use a personal bank account).
  • The figures in your business bank statements and other financial statements should be consistent. If there is a difference between the two, you should be in a position to explain why.

At Camino Financial, you won’t need to visit your branch to get your reports or print and fax documents.

All you have to do is securely connect your bank account with Plaid so we can review the last six months of your banking activity.

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Tax Returns

You will have to provide both business and personal tax returns. They are very important business loan requirements because they help the lender better understand your financial situation.

If you own a pass-through entity (like an S corporation, a sole proprietorship, or a partnership), you will only need to share personal tax returns.

At Camino Financial, we only request your business tax returns for loans over $50,000.

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Business Registration/Entity Type

You will have to tell the lender how you structure your business. Most small ventures fall into one of four categories:

  • sole proprietorship
  • partnership
  • limited liability company
  • corporation

Documentation for different types of business structure

Type of business structureDocumentation required
Sole proprietorshipProof of DBA Registration
PartnershipBusiness partnership agreement
Limited liability company (LLC)Articles of organization and the LLC operating agreement
CorporationArticles of incorporation, Bylaws, Written Action of Incorporator, Agreements between shareholders

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Business Licenses And Permits

These documents are critical as they help establish if you comply with the law. They tell your lender that you can legally operate the business. They also show proof of ownership.

Ensure that the licenses and permits have not expired.

It’s a good idea to put in a little effort into finding out about the different licenses that your business needs. Noncompliance could lead to the lender refusing your small business loan application. It could also expose your company to penalties as well as legal liability.

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Employer Identification Number (EIN)

This is a nine-digit number assigned by the Internal Revenue Service (IRS). It is also called the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number.

Corporations and partnerships need to obtain the EINs.

Sole proprietorships need an EIN only if they have employees.

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Social Security Number (SSN)

Most lenders will ask for your SSN.

If you don’t qualify for an SSN, some lenders accept ITIN.

ITIN stands for “Individual Taxpayer Identification Number”: it’s generally used by immigrants who do not meet the requirements to have an SSN and need to file returns and pay taxes.

The Government issues the ITIN regardless of immigration status.

Just know that not all financial institutions accept this alternative number.

Fortunately, Camino Financial does accept an ITIN number in lieu of an SSN.

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Financial Statements

One of the business loan requirements that you have to fulfill is to share your financial statements.

Don’t confuse financial statements with bank statements.

These documents will provide details about your company’s financial performance in the past. Prepare to share 2-years’ worth of these documentsÑ

  • Profit and loss statement
  • Balance sheet
  • Cash flow statement

A lender could also ask you to provide financial projections.

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Accounts Receivable Aging And Accounts Payable Aging

These two reports are of particular interest to the lender because they provide information about how you manage your working capital.

Lenders will require accounts receivable aging only for a firm that operates in the business-to-business (B2B) segment.

If your clients delay payments regularly, that’d affect your cash flow as well as your profitability.

Your accounts payable aging report provides the lender with information about the number of days of credit that you receive from your suppliers.

If your suppliers allow you generous credit terms, it is to your advantage. However, if you delay payments beyond the stipulated credit period regularly, it will reflect poorly on your company.

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Details Of Your Other Debts

The lender will require you to provide information about other current debts.

Most financial institutions consider this one of the key business loan requirements because it tells them if you are in a position to meet all your obligations.

If they think that your debt burden is higher than you can handle, they are likely to turn your loan application down.

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Business Plan

Many lenders ask for a business plan as part of their small business loan requirements.

A good business plan is a document that details your business goals and how you plan to meet them. The document should include a brief description of your business, how you market your products or services, and how you plan to increase sales volumes.

Here are some of the specific details most business plans have:

  • Your product’s or service’s attributes. What are you selling? How is it better than what the competition offers? You need to convince the lender about the merits of your product and its ability to retain or increase its market share.
  • Customer analysis. Describe your current market and how you plan to increase sales.
  • Supply chain. How do you source your raw materials and supplies? Could prices rise and affect your profitability?
  • Industry analysis. Entrepreneurs should be familiar with the sector in which they operate.
  • Your finances. How will you raise the money for your expansion? How much money have you invested in the business?
  • Cash flow. Most lenders want to know how you use your company’s money from business operations and other sources.

Even if the lender of your choice doesn’t ask for a business plan, it’s a good practice to prepare yours. It will help you calculate precisely how much you need to borrow. It also helps you calculate the Return On Investment (ROI).

Choose A Lender That Requires Fewer Documents

At Camino Financial, we have a paperless application:

  • ITIN or SSN
  • You can apply if you have no credit history or a deficient credit score
  • A bank account (active for at least 6 months)
  • Minimum monthly income of $1,500
  • Be current with outstanding debt
  • We won’t ask for a business plan

Compare how many documents other lenders require

Required documents: other lenders vs. Camino Financial
DocumentTraditional LendersCamino Financial
Bank Statements✔️✔️ (electronically through Plaid)
Tax Returns✔️(only for loans $50k or above)
Business Registration/Entity Type✔️✔️ (you can register your business during our process if you haven’t yet)
Business Licenses and Permits✔️❌*
SSN✔️❌ (you can apply with an ITIN)
Financial Statements✔️
Accounts Receivable and Account Payable✔️❌*
Details of Your Other Debts✔️❌ (we won’t ask for any documents, you just need to be current with your other debs)
Business Plan✔️

*Unless needed to validate the business’s existence.

You can clearly see that we have fewer business loan requirements.

Get Approved For A Loan Today


female business owner smilinf

Business Loan Application Checklist

Use this checklist to get that commercial loan you need.

  • Confirm the number of years in business
  • Verify preferred lender’s business industry requirements
  • Decide on loan amount
  • Establish the loan’s purpose
  • Know your personal and business credit scores
  • Confirm annual business revenue
  • Have contracts with suppliers at hand
  • List business assets you can use as collateral
  • Calculate your DSCR and DTI

Camino Financial has minimal business loan requirements that are very easy to meet.

Don’t forget to gather these documents:

  • 6-12 months of bank statements (some lenders will ask you to link your bank account to apps like Plaid)
  • 1-2 years of personal and business tax returns
  • business registration, licenses, and permits
  • document verifying tax ID number (EIN, SSN, or ITIN)
  • 12 months of profit and loss
  • balance sheet
  • cash flow statements
  • list of accounts receivables and payables
  • list of existing loans and debts
  • business plan

Camino Financial won’t ask you for this many documents, we offer a streamlined application.

Types Of Business Loans

These are the most common types of business loan options:

  • SBA loans. Applicants can apply for government-backed loans at participating lenders. Generally, SBA loans have stricter regulations, flexible terms, and lower interest rates.
  • Secured business loans. This financing option requires you to pledge collateral.
  • Unsecured business loans. Doesn’t need collateral. Because the lender assumes more risk, they charge higher interest rates and offer smaller loan amounts.
  • Loans for working capital. Borrowers can improve their cash flow by using the proceeds to pay for day-to-day expenses.
  • Business lines of credit. Lines of credit are available through banks, credit unions, and online lenders. The borrower has a credit limit and can make withdrawals from a credit limit.
  • Merchant cash advances. Also called MCAs, they advance cash for a percentage of a business’s future credit and debit card sales. They charge a very high APR.
  • Business credit cards. They’re not a small business loan per se, but they can help you finance certain expenses. Their requirements can be less strict.
  • Startup business loans. They have more lenient requirements because they’re for new businesses or people that want to start one.

Requirements For Startup Business Loans

Traditional commercial loans generally require you to have been in business for at least 2 years. So, if you have a new business, you wouldn’t qualify.


Many financial institutions see startups as high-risk ventures.

Data provided by the Small Business Administration (SBA) reveals that about two-thirds of new businesses close down within two years of being open. And only half of those survive after five years.

infographic about the average establishment survival rate

Startup loans are the alternative you need because they have more lenient requirements:

  • Have a new business or a business idea (you’ll require a business plan)
  • Personal bank account and tax returns
  • Good personal credit score
  • Business registration and licenses (if you’ve already started the business)
  • Employer identification number
  • A minimum income (the amount they’ll require depends on the lender)
  • Collateral (if you want a secured loan)
  • EIN and SSN
  • Minimum credit score

At Camino Financial, we offer startup loans with even fewer requirements:

  • ITIN or SSN
  • An official photo ID
  • You can apply if you have no credit history or a deficient credit score
  • A bank account (active for at least 6 months)
  • Minimum monthly income of $1,500
  • Be current with outstanding debt
  • We won’t ask for a business plan
Apply for a startup loan

Tips To Qualify And Get Approved For A Business Loan

Here are some tips to get approved:

  • Work hard to build both your personal and credit scores.
  • Make sure your business meets the business loan requirements before applying for a loan.
  • Have all your documents beforehand.
  • Write a strong business plan, even if the lender doesn’t ask for one.
  • Review your credit reports and, if they have errors, contact the credit bureaus before applying for a loan to take steps to have them reviewed and removed.
  • Don’t borrow more money than you can safely repay.
  • Be transparent about the information you provide on an application. It’s better to give too much information than not enough.

woman hanging OPEN sign

Get The Capital You Need To Grow Your Business

If your business needs a cash infusion, consider taking a loan from Camino Financial. We offer:

We are more flexible than traditional lenders.

The application process to obtain a small business loan from Camino Financial is simpler and faster than with most online lenders.

Plus, our application doesn’t affect your business credit score.

Camino Financial is even open to extending finance to borrowers with no credit history. Additionally, you don’t need to pledge collateral.

In the time you take to gather all the documents required by other lenders, you could have in hand the cash you need to grow your business by choosing Camino.

You can receive your loan within 2 business days!

All you have to do to start is submit your loan application.

It will take only a few minutes, and you will receive an instant prequalification.

Apply now!

Keep reading about the differences between a loan with a mortgage 


How hard is it to get a business loan?

Qualifying for a loan depends on the type of loan you apply for and lender requirements.

Some lenders approve applicants with bad credit while others do not.

Lenders look at a business’s credit history, how many years they’ve been in business, and other factors before approving a loan.

Their rates, charges, and loan amounts are directly proportional to the degree of risk they assume and go up and down accordingly.

Is collateral needed for a business loan?

Secured loan business loan requirements state that you must provide collateral. On the other hand, unsecured business loans do not.

Borrowers should review lender requirements before applying for a business loan. Most lenders do not require collateral for short-term loans, lines of credit, and credit cards.

In lieu of collateral, a lender may request a personal guarantee which means the applicant will personally repay the loan if the business defaults on loan payments.

Do business loans require a down payment?

Lenders offering online loans generally do not require a down payment.

If a lender asks you to pay a fee in advance or will charge you a certain amount to approve you, be careful. They could be fraudulent lenders going after your money.


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