How to Secure a Business Loan in Challenging Times

1. How to Secure a Business Loan in Challenging Times

2. Cash Flow Lenders make small business owners prove that they manage money well and have the revenue required to pay back a small business loan. It’s critical to have an adequate cash flow to make monthly loan payments. Prospective lenders will ask you to submit banking and accounting statements when you apply for term loans and other types of financing.

3. Credit Score This is an area where business owners have a lot of control. Small business lenders consider the owner’s and the business’s credit scores by reviewing credit reports as part of the loan approval process to determine creditworthiness. Most experts say it takes a minimum personal credit score of 700 and a business credit score of 155 to get approved for financing with a reasonable interest rate and loan term.

4. Loan Application Process Another area that you have significant control over when it comes to being approved for a business loan in 2022 is the actual application process itself. Getting it right increases your likelihood of being approved. Submitting a sloppy or incomplete application puts your chances at risk. Start by reviewing your company’s finances and decide how much funding you need, when you need it, and the purpose of the loan. Ask yourself these questions:

5. How much do you need to borrow? You could secure a microloan for as little as a few hundred dollars, while SBA loans could provide a maximum loan amount of $5.5 million. • How soon do you need the funding? You can receive money in as little as one day from an online or alternative lender, 36 hours with an SBA express loan, or up to three months for some SBA and traditional bank loans.

6. How good is your credit score? You will likely need a personal credit score of at least 670 and a business credit score of at least 160 to qualify for financing from a traditional financial institution or one backed by the SBA. Different lenders have their own minimum credit score requirements and definitions of good credit. If your credit history isn’t good enough, you may be better off applying through online or alternative lenders that may not have as rigorous requirements.

7. Financing options and providers • Selecting the correct type of financing will improve your chances of getting approved. Here are some standard business loan options. • Equipment Loans: - Equipment financing is used to finance the equipment and machines small businesses depend on. They typically come with relatively low interest rates because they’re collateralized by the equipment they’re used to purchasing.

8. Term Loans: -Short term business loans and long-term ones can be used for many business purposes. Term loans from banks, brick-and-mortar financial institutions, and traditional lenders come with relatively low interest rates but are challenging to qualify for. It’s easier to get approved through online and alternative lenders, but interest rates are higher. • Microloans:- Microloans are offered to minorities and businesses in disadvantaged areas for relatively small amounts through a non-profit community-based lender.

9. Merchant Cash Advance: - You receive financing based on the future earnings of your business. Credit scores are not considered during the approval process. Be aware that merchant cash advances come with very high interest rates. • Business Credit Cards: - Credit cards are a smart way to pay everyday business expenses and separate them from personal ones. Interest rates are typically too high to use them to fund significant business expenses.

10. Why Choose Biz2Credit? • Trusted partner for franchise funding • Biz2Credit was founded in 2007 and has provided more than $10 billion in loans. • Dedicated support team • Tailored financing solutions

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