The last step in deciding what type of loan is best for your small business is one you can't skip. Before applying for any business loan, you should be aware of how likely you are to be approved.
Each of the loan options listed earlier has its own requirements when it comes to things like minimum credit scores, time in business, and annual revenues. Lenders want to see that you're a creditworthy borrower and that you're likely to repay a loan.
If you have an idea of which kind of loan you're interested in, check the qualification requirements before you apply. Take time to review your business and personal credit, as well as your business financials. Create key documents, such as a financial statement, cash flow statement, and profit and loss statement to see where you stand. Your lender may ask to see these during the application process, so having them prepared can speed things along.
Once your loan application is approved, go over the fine print before agreeing to the loan terms. Take note of how much the loan will cost you in interest and fees. Review your cash flow to make sure you can sustain the estimated monthly payment obligation. Check for a personal guarantee or lien requirement. The better you understand your loan terms, the smoother the business financing process is likely to be.
Now that you know which type of loan is right for you, it's time to find the right lender. Check out our guide to the top small business loan providers to get started.