Different lenders might weight what they look at differently. In other words, depending on the lender, some information is more important than other information. These are some of the common things lenders consider when they look at your business loan application:
- Your personal credit score
- Your business credit profile
- Your business cash flow
- Your annual revenue
- Your time in business
- Your industry
They are trying to determine whether or not you have the revenue and the history that proves you can make periodic payments. They consider your industry because some types of businesses are considered higher risk than others. Some lenders may not even consider a loan in what they would identify as a “restricted” industry (this “restricted” industry list is unique to each lender).
Depending on the lender, a restricted industry could be considered businesses like bars, nightclubs, or medical marijuana dispensaries. In addition to these types of businesses, some lenders won’t lend to restaurants, financial advisors, or law firms. This list should be called out somewhere on their websites, so it makes sense to look for the restricted industry list before you apply.