How to Get a Bank Loan for Business in 5 Steps

 

Getting a bank loan for business is a major hurdle faced by small businesses, mainly due to hard lending standards set by banks. But obtaining outside financing is usually necessary to start or grow a business or cover day-to-day expenses, including payroll and inventory.

 

Although finding, applying for and getting approval for bank loan for business can be difficult, the more prepared you are, the better. Here’s how to get a business loan in five steps:

 

  1. Figure out for why you need the money. Genuinely ask yourself how this loan will help your business.
  2. Find the right loan. Choose the type of business loan basis your needs.
  3. Find the best lending bank for you. Compare options based on the cost and terms of each loan.
  4. See for yourself if you have what it takes to qualify. Gather information including your credit score and annual revenue.
  5. Get your documents ready and apply. Know what documents banks will need from you.

 

Once you’ve gathered complete information and compared your options, it’s time to apply for the bank loan for business that fit your financing needs and that you qualify for.

 

Depending on the banking institution, you’ll need to submit a combination of the following documents with your application:

  • Business and personal tax returns
  • Business and personal bank statements
  • Business financial statements
  • Business legal documents such as articles of incorporation, commercial lease, franchise agreement
  • Business Sales, revenue