Requirements for Small Business Loans
Requirements, when borrowing a merchant cash advance, will change by lender and if the money will go towards a new or existing business. Most business loan lenders do not like to lend towards new businesses as the risk goes up for them so be prepared with a solid business plan when applying. Do you have the ability to pay the money back? How much money do you need to borrow and what will you do with it – start a new business or expand an existing? What will your business do if you are unable to borrow? How do your personal finances look? On merchant cash advances for new businesses if you personally have great credit and a successful business plan but don’t have assets to use as collateral than it will still be difficult to receive a business loan. The loan is give to you using your personal finances not the business’ finance if the business doesn’t exist yet.
What are the requirements for applying for a business loan?
- Have a solid business plan
- Know your business’ credit and have a rating report on-hand
- Provide your personal credit history
- Process credit cards in your business – 3 months of processing history is required by most lenders
If denied the first time you apply consider which lending institution you are working with.Smaller banks or industry specific institutions do not use automated credit scoring systems and take a more ‘human’ approach to applications so you may have a better chance of being accepted than if you were working with a larger lander.