A Comprehensive Guide To Unsecured Business Lines of Credit
An unsecured business line of credit can be invaluable. It acts as a financial safety net because it provides... Read More
Knowing how to get a business loan will allow you to expand your company.
The application process can be complex if you are not familiar with the ins and outs of borrowing money from financial institutions.
That's why we've put together this guide. We'll cover what lenders are looking for, the different business loans available, and how to complete an application.Table of contents |
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1. How to get a small business loan |
2. Tips for getting a commercial loan |
3. Why you should apply for a business loan |
4. Frequently asked questions |
You must provide your social security number to apply for a business loan.
The lender will use this number to check your credit score and determine your eligibility.
Some lenders may be more lenient on credit scores. If you are looking for a small business loan, however, they may look more closely at your personal credit score.
Most lenders require a personal score over 600.
Many lenders have minimum monthly or annual revenue requirements you must reach so they can even consider you as a candidate.
Most financial institutions will ask you to make a minimum of $100,000 annually.
Lenders will ask to see bank statements to learn what your revenue is.
How you plan to run your business will play a prominent role in your eligibility. Lenders will want to know how you plan to manage your business with this potential financing.
The minimum amount of years in business will depend on the lender. Most banks require at least two years in business.
If you want an SBA loan, ensure your business qualifies as a small and for-profit business.
The SBA will also ensure you are current on all ongoing and previous government-provided loans.
Plus, there are some industries whose applications lenders don't approve.
At Camino Financial, we have lenient requirements for our loan process. Here are some examples of how we stack with the competition:At Camino Financial, you can receive an answer in a few days.The next step is signing the loan agreement and making repayments if you receive loan approval. If you are not approved, the lender will usually:
Other financing forms, such as selling equity, can mean letting other people take on some level of ownership of your company.
With a business loan, you maintain full ownership.
By making payments on time, you can improve your business's credit score. This empowers your business to access more opportunities later.
Not all lenders report payments to credit bureaus.
Some examples you may have heard about include lines of credit and commercial installment loans.
When used wisely, business loans can empower you to expand into a new market, offer new products, or hire more employees.
While the upfront costs of these decisions can be high, a loan can help you pursue them sooner, leading to profitable and relatively fast growth.
If you have realized that a business loan is exactly what you need, we recommend applying with Camino Financial. Our requirements, easy application process, and customer service differentiate us from the competition. Act now! Apply For A Business Loan!
FAQs |
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How hard is it to get a business loan?The difficulty varies depending on the lender and your credit score. If you have a strong business plan and a good credit history, you may be able to get approved for a loan easily. However, getting approved for a loan may be more difficult if you have poor credit or a weak business plan. |
How do lenders decide interest rates?This varies widely depending on how well your lender thinks you'll be able to repay the loan. They check your cash flow, time in business, credit score, collateral, business plan, and required loan amount. |
How can I get a loan to start a business?If you only started your business, you likely won't receive approval from a regular business loan. Fortunately, there are startup loans available for businesses in their early stages. Startup loans usually have different requirements and terms. |
What are the chances of getting a small business loan?If you go with a traditional bank, the chances aren't usually in your favor. They only approve about 27% of small businesses for the loan they apply for. This is usually because small businesses are at higher risk than larger businesses and may not have a very impressive ROI. It's easier to get a loan with alternative and online lenders. |
What is the average size of a small business loan?According to the Federal Reserve, in 2017, the average size of a small business loan was roughly $663,000. This number is lower for small business loans from alternative lenders, which average from around $50,000 to $80,000. |
What credit score do you need for a business loan?On average, to qualify for a business loan, you will need a credit score of around 680. But this number varies by lender. |
How can I get a business loan with no money?If a business doesn't have any proof of annual revenue, lenders may ask for supplemental documentation, such as
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Can I get a business loan with bad credit?Getting a business loan with bad credit is possible, though you may need to find a lender with flexible requirements. These lenders will only be able to offer higher interest rates or will ask you to provide some form of collateral. |
How can I get approved for a business loan without collateral?Getting approved for a business loan without collateral may be possible if you have a strong business plan and a good credit score. Or, you might need to pay a steeper interest rate. Lenders will also look at your revenue, cash flow, and ability to repay the loan. If you can prove that your business is stable and profitable, you may be able to get a loan without putting up collateral. |
How much income do you need to get a business loan?Depending on the lender, the required revenue may be as low as $10,000 or above $30,000 a month. Every situation is unique, so it's a good idea to review each lender's guidelines before applying for a loan. At Camino Financial, we ask you to have a monthly income of $2,500. |
What bank is easiest to get a business loan from?Each bank will be easier for different types and sizes of businesses to get loans from, so there's no one size fits all answer. That said, TD Bank seems to be an institution where it's easy to get a loan. Other popular banks for small business loans are Citibank, Wells Fargo, JPMorgan Chase, and Bank of America. |
What are the alternatives to getting a business loan?There are a few alternatives to getting a business loan, such as
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What are the most common business loan requirements?First, businesses must prove their creditworthiness as part of the loan application process. Your lender may ask for other documents, such as:
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What is the easiest loan to get approved for?The easiest loan to get approved for depends on several factors, including:
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