How to Apply for a Business Loan

Popular Business Loans

What Lenders Look

The Application Process

Commercial Loans

Commercial loans provide large-scale funding for established businesses needing capital for expansion, real estate purchases, or major investments. These loans typically offer:

• Higher borrowing limits for large projects

• Longer repayment terms for manageable monthly payments

• Competitive interest rates based on business creditworthiness

Businesses may need collateral or a strong financial history to qualify.

Small Business Administration (SBA) Loans

Designed for growing businesses, small business loans offer funding for daily operations, expansion, or unexpected expenses. These loans come with:

• Flexible repayment options based on business needs

• Lower borrowing limits compared to commercial loans

• Various lender options, including banks, credit unions, and government-backed programs

Your SBA Preferred Lender

As an SBA Preferred Lender, FSB offers longer terms and in-house approvals to help you get financing faster.

Inquire About Business Financing

Must be 18 or older to apply. All loans are subject to credit approval.

Equipment Loans

Equipment loans allow businesses to purchase machinery, vehicles, and essential tools without large upfront costs. Benefits include:

• Equipment serves as collateral, making approval easier

• Fixed monthly payments for budget-friendly repayment

• Quick access to funds to keep operations running smoothly

This type of loan helps businesses upgrade technology, replace outdated equipment, or expand capabilities.

Ag Farm Loans

Agricultural loans provide funding for farm operations, land purchases, and equipment upgrades. These loans offer:

• Flexible repayment terms to align with seasonal income

• Low-interest rates through government-backed programs

• Funding for livestock, seeds, irrigation, and expansion projects

Designed for farmers, ranchers, and agribusinesses, these loans help maintain and grow agricultural operations.

Business Operating Lines of Credit

An operating line of credit gives businesses ongoing access to working capital to cover short-term expenses, inventory, and cash flow gaps. Advantages include:

• Borrow as needed and repay only what is used

• Helps stabilize cash flow during slow seasons

• No need to reapply—funds replenish as you repay

This financing option is ideal for businesses needing flexibility to manage daily operations.

Alternative Financing Options

For businesses that don’t qualify for traditional loans, alternative financing offers flexible options such as:

• Accounts Receivable Funding – Convert unpaid invoices into immediate cash

• Microloans – Small-dollar loans for startups or businesses with little credit history

• Peer-to-Peer (P2P) Lending – Connects businesses with investors through online platforms

These solutions provide quick access to funds but often have higher interest rates or shorter repayment terms.

Business & Personal Credit Scores

Your credit score is one of the first things lenders assess when reviewing your loan application. Both business and personal credit scores play a role in determining eligibility, interest rates, and loan terms.

• Personal Credit Score – Most lenders require a score of 680 or higher, but some financing options are available for lower scores.

• Business Credit Score – Businesses with established credit (Paydex, FICO SBSS) may receive more favorable terms.

This financing option is ideal for businesses needing flexibility to manage daily operations.

How to Strengthen Your Credit Before Applying

Business Age & Revenue History

Lenders typically prefer businesses that have been operating for at least two years with a steady revenue stream. While startups can still qualify for funding, they may face additional requirements such as higher credit scores, collateral, or a co-signer.

To strengthen your loan application:

• Maintain organized financial records to show stable or growing revenue.

• Demonstrate profitability or a clear growth trajectory.

• If you're a new business, consider SBA loans, microloans, or alternative financing.

A solid revenue history helps lenders feel confident in your ability to repay the loan.

Debt-to-Income Ratio & Cash Flow

Lenders examine your debt-to-income (DTI) ratio to determine how much of your revenue is already committed to debt payments. A high DTI signals risk, while a low DTI suggests you can handle additional financing.

• A healthy DTI is generally below 36%, meaning less than around a third of your income goes toward debt payments.

• Strong cash flow reassures lenders that your business can cover loan payments without financial strain.

How to Strengthen Your Credit Before Applying

Step 1. Determine How Much You Need

Before applying, calculate how much capital your business requires. Consider:

• Startup costs – Equipment, real estate, inventory, or marketing expenses.

• Working capital – Funds needed to cover day-to-day operations.

• Expansion funds – Costs for opening new locations, hiring employees, or launching new products.

Requesting too little could leave you short on funds, while borrowing too much may lead to unnecessary debt.

Step 2. Compare Lenders

Not all business loans are the same. Explore different lenders to find the best terms for your financial needs.

• Banks & Credit Unions – Offer competitive rates but require strong credit and established business history.

• Online Lenders – Provide faster approvals and flexible qualifications, often at higher interest rates.

• SBA Loans – Government-backed loans with lower rates but longer application processes.

• Microlenders – Suitable for startups and businesses with limited credit history.

Step 3. Submit Your Application

Once you've chosen a lender, complete the application process. Some lenders allow online applications, while others may require an in-person visit. Be ready to provide the following documents:

• Business plan with financial projections

• Tax returns (business & personal)

• Profit and loss statements, balance sheets, and cash flow statements

• Business licenses and legal documents

• List of existing debts (if applicable)

Required Documents for an FSB Business Loan

To streamline the application process, prepare the necessary documents in advance. For an FSB Business Loan, you’ll need:

Step 4. Waiting for Approval

Loan approval times can vary depending on the lender, loan amount, and type of financing.

• Traditional lenders may take longer due to more detailed underwriting.

• Online lenders often offer quicker decisions with streamlined processes.

• Government-backed loans usually involve extra documentation and longer processing timelines.

Connect with FSB Today

Get support from local lenders who understand your goals and can help you find the right solution.

Inquire About Business Financing

Must be 18 or older to apply. All loans are subject to credit approval.