Need a Business Loan? Here are the Top 3 Things Lenders Look For

Do you need a business loan?

According to a recent report by Forbes, companies using small business loans reported almost twice as much revenue after three years compared to similar-sized start-up businesses with no debt. As the old business adage goes, it takes money to make money.

Applying for small business loans is time consuming. Before you apply, consider these top three things lenders look for:

1. Does Your Business Have Sufficient Cash Flow to Pay Down the Loan?

The top question on any lender’s mind is whether you can pay down the loan. Banks consider loans from a risk perspective, and positive cash flow is critical to your business’ success.

Do you have contracts in place that will generate a stream of income in the future? How reliable are your key clients or customers? To be approved for a loan, you will need a steady stream of revenue that is generating positive cash flow now and in the future.

2. Are you Creditworthy?

In addition to having positive cash flow, to prove your creditworthiness you will need a solid business plan that includes a detailed explanation of how you plan to use the proceeds from the loan.

Can you show that you have proven experience running a business? If this is your first foray into entrepreneurship, do you have leadership experience in a similar industry or business? Are you knowledgeable about business funding? Do you have solid references?

Think of the meeting with your lender as if it were a job interview. You need to demonstrate your knowledge, skills and expertise to show your business will succeed.

3. Can Your Business Withstand Some Turbulence?

Even the best laid plans can go awry. Take a look at some “what if” scenarios. Do you have a contingency plan in case you were to lose your top customer? If your business is seasonal or cyclical, how do you manage downturns? Is your insurance coverage adequate to cover potential losses?

Your lender wants to ensure you have sufficient assets and collateral to handle a rough patch and still payoff your loan.

Creating Tools to Guide Small Businesses

Getting a business loan can be stressful. If all of this seems daunting, Alliant Business Systems can help.

We are a business consulting firm providing business credit solutions. As experts in small business loan requirements, we can help you find the best financing options for your business. With sound business credit, lending institutions will consider you a more viable candidate to work with.

At Alliant Business Systems, we can teach you:

  • How to apply for a business loan
  • How to build business credit
  • The best way to build business credit
  • How to build business credit without using personal credit
  • How to build business credit fast
  • How to build small business credit
  • How to start building business credit
  • The fastest way to build business credit
  • How to build business credit without personal guarantee

We can help you understand business loan requirements. We will guide you to find the right loan for your business and lead you through the application process.

We guarantee you at least $50,000 in business credit within six months when you follow our Alliant 7 Step Business Credit Building Program.

Ready to Fund Your Business And Qualify for a Business Loan?

Schedule a Free Consultation