Guide to Get Funding For Your Small Business

As the owner of a small business, you are likely all too aware of the many moving pieces it takes for a business to run smoothly. Dealing with business credit is often the last area owners want to spend time on. While this area of the business can be very intimidating for many, it doesn’t have to be. Take a look at the content below to get off to the right start.

Full table of contents


Determine Why You Need a Small Business Loan

The first question you should ask yourself (and that every lender will ask you) when applying for a business loan is: Why? Some small business owners need working capital to cover a range of purposes, and others have a very specific need, like a certain piece of equipment. The reason you need the money will drive your choice of lender and loan type, so take some time to figure out why you need financing.

  • Starting a Business
  • Buying a Business
  • Day-to-Day Working Capital
  • Cover Cash Flow Gaps
  • Grow Your Business
  • Emergency Spending
  • Equipment Financing
  • Refinancing Debt

Calculate How Much Financing You Can Afford

The amount of capital you want to achieve your business’s goals might not necessarily match up with how much you can afford. Take on too much financing, and you could find yourself caught under a pile of debt. Take on too little, and you can wind up with missed opportunities.

  • Use a Business Loan Calculator
  • Calculate Your DSCR
  • Conduct a Loan Performance Analysis

Browse Different Types of Business Loans

Your next step for getting a small business loan is to actually figure out which business loans to apply for. A decade ago, your local bank was the only place you could really go to if you had a small business and needed a loan. But there are many more options now. The key is knowing which types of loans match up with your credit profile, your budget, and the reasons you need the funding.

  • SBA Loan
  • Equipment Financing
  • Business Lines of Credit
  • Business Acquisition Loans
  • Merchant Cash Advance
  • Unsecured Business Loans

Gather Your Loan Documents

Almost every type of loan product comes with some paperwork requirements. Usually, the harder it is to qualify for the loan, the more documents you’ll have to submit. Banks require the most documentation because they closely vet borrowers and approve only the most qualified. Banks also issue the largest loans (six and seven figures), so there’s more at stake, and they want to verify all of your personal and business information before approving you.

  • Credit Score
  • Average Bank Balance
  • Time in Business
  • Annual Revenue
  • Profit and Loss Statement
  • Balance Sheet
  • Personal & Business Tax Returns