How to Secure a Small Business Loan?

A Simplified Guide for Your Business
August 15, 2023

Starting or expanding a small business? Puzzled about funding? If you don't have the luxury of investors backing your business, consider a small business loan. Here's a quick and friendly guide on how to get started.

Where to Begin with Business Loans?

Every business is unique, so there's no one-size-fits-all loan. But by understanding your options, you can find the one that fits just right. Some of the most popular business loans are Term Loans, Small Business Administration (SBA) Loans, Business Lines of Credit, and Business Credit Cards. Below, we'll break down what these loans do, their benefits, and how you can qualify.

Popular Business Loan Options

Term Loans

What are they? One of the most common loans used for business financing which provides upfront funding. You repay it, with interest, over time.
Benefits: Often has high borrowing limits and is speedy to obtain.
Ideal for: Businesses with good credit, cash flow, and potential collateral.
- Note: Loan amounts will vary between financial institutions, typically offering one of the highest dollar amounts of all small business loan options.

Small Business Administration (SBA) Loans

What are they? Government-backed loans available at many financial institutions.
Benefits: Long repayment terms (sometimes up to 25 years) with competitive rates.
Ideal for: Established businesses with good credit, clear business plans, and some equity investment.

Business Lines of Credit

What are they? Think of it as a credit card for your business. You only pay interest on the amount you use.
Benefits: No collateral needed and extreme flexibility.
Ideal for: Businesses with reliable revenue and credit and those facing short-term expenses.

Business Credit Cards

What are they? Just like personal credit cards but for business expenses.
Benefits: Can accrue reward points used for cashback, travel, etc.
Ideal for: Businesses or owners with good credit and typical operational costs.

How Can You Apply?

Take a Financial Snapshot: Look at your financial situation before you leap. Know where you stand.
Explore Your Options: Loans are like shoes - one size doesn't fit all. Interest rates, terms, and fees are not set in stone and can vary significantly between lenders. Give yourself the freedom to compare and contrast.
Reach Out for Guidance: Don't journey alone - a commercial lender can be your navigator. They're in the business of helping you find the most fitting funding option for your venture.

Before signing any dotted lines, ensure you've gone through your financials with a fine-tooth comb. Loans are a commitment, and in the rough and tumble of business, remember: you'll still need to repay what you've borrowed, regardless of how the winds blow. It's crucial to be crystal clear on interest rates, fees, and repayment terms. A seasoned commercial lender is often your best ally in exploring options and pinpointing the route that's just right for your business's voyage to growth.