A business loan is a financial tool available to business owners of all sizes who need funding to enhance their business. Small businesses and start-up businesses typically have a more difficult time securing a business loan, but it is certainly not impossible. Regardless of your business size, any lender you work with will want to see firm documentation that supports the viability of the business as well as the purpose for the loan.

 

Where Can I Get A Business Loan?

Banks are a common source of business loans, but they are often more conservative in their lending decisions. For this reason a bank is much more likely to underwrite a loan to a larger or more established business. It’s not impossible to get a loan from a traditional bank if you’re smaller or just starting up, but you will usually need to provide more extensive documentation of your business plans.

What Documentation Will I Need To Apply For A Business Loan?

Specific documentation will vary somewhat from lender to lender, but there are a few common things that you will be asked to provide:

• A complete business plan, including an overview of the market and customer base for your business
• Personal and business financial statements
• Collateral to secure the loan
• Incorporation or LLC documents (if applicable)
• Proof of ownership or sale if the business was purchased by you
• Tax returns and credit references
• Material contracts (if applicable)

These are the basic items you will need, but remember that each lender will probably have other information they will want you to provide.

Are There Different Types Of Business Loans?

Yes, there are many types of business loans and the choices can sometimes be confusing. Examples include small business specific programs, industry specific loans, “micro” loans for small dollar amounts, community development loans, and many others. Whatever your business need, there is most likely a business loan for you offered somewhere.