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1. Time in Business

 When applying for small business loans, every lender will ask how long you have been in business. The longer you have been operating, the better it is for your application. Banks may be less likely to lend to businesses under two years old, but online lenders may have more flexible requirements. Having a solid business plan, a strong personal credit score, and collateral can also strengthen your loan application. Ultimately, having a comprehensive and well-thought-out business plan showing how you will grow revenues and profits in the next three to five years is the best way to ensure that you get the loan you need. 

2. Business Credit Score

Your business credit score is a critical factor when it comes to obtaining financing for your business. Lenders use this score to assess the likelihood that you will be able to pay back the loan. Your business credit score is determined by a number of factors, such as the length of your business’s history, the number of credit accounts you have, and your payment history. Your personal credit will also influence whether the lender approves your loan and at what interest rate.  

3. Business Revenue

 Lenders will review your business’s annual revenue and profits, as well as your bank statements, to determine your eligibility for financing. You will need to provide your profit and loss statements from the previous year and a year-to-date, updated within the past 60 days. Additionally, you will need to provide four months of business bank statements. The stronger your business financials, the more likely you will be to qualify for financing at lower rates. 

4. Taxes

Most lenders will require the past two years of personal and business tax returns to evaluate the health of your personal and business finances and determine your ability to pay back a loan. This includes sole proprietorships, partnerships, S corps, and corporations. Business tax returns are especially important for corporations and LLCs taxed as corporations. 

5. Loan purpose  

You need to provide a statement describing the purpose of your loan when applying for a small business loan. This statement should be as specific as possible and match up with the amount of money you’re requesting. Knowing the purpose and type of loan you need will help you plan out your debt and choose the right option for your business. 

6. Desired Loan Amount

 When applying for a loan, you'll need to specify the amount of money you want to borrow from the lender. Banks are typically able to provide the most capital, with loans in six and seven figures. If you need a smaller amount of money (less than $250,000), alternative lenders and SBA loans are better options. Be sure to be clear and honest about how much financing you require and how you'll use it.