This post was originally published on On Deck
For many small business owners, business financing can be critical — a means to fund growth, cover operating expenses or manage unexpected challenges. However, navigating the business loan application process can feel overwhelming, especially if you’re unfamiliar with the requirements.
Lenders assess several factors before approving a loan, from credit scores to business history. Understanding these requirements will not only improve your chances of approval, but also help you secure the best possible terms.
In this guide, we’ll cover the essentials of applying for a business loan, the importance of credit scores, ways to improve your eligibility and common pitfalls to avoid.
What’s required to apply for a small business loan?
Business loan requirements vary depending on the lender and type of loan. However, most lenders assess the following key factors. Preparing for these in advance can streamline your application process.
Personal and Business Credit Scores
Your credit scores — both personal and business — play a crucial role in the loan approval process. Credit score requirements can differ greatly between banks and online lenders, but here’s what lenders typically expect:
Personal credit scores. Personal credit scores show your ability to manage individual finances. It can be viewed as a
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