How to Secure a Business Loan in Challenging Times

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How to Secure a Business Loan in Challenging Times
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Cash Flow
Lenders make small business owners prove that
they manage money well and have the revenue
required to pay back a small business loan. Its
critical to have an adequate cash flow to make
monthly loan payments. Prospective lenders will
ask you to submit banking and accounting
statements when you apply for term loans and
other types of financing.
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Credit Score
This is an area where business owners have a lot
of control. Small business lenders consider the
owners and the businesss credit scores by
reviewing credit reports as part of the loan
approval process to determine creditworthiness. M
ost experts say it takes a minimum personal
credit score of 700 and a business credit score
of 155 to get approved for financing with a
reasonable interest rate and loan term.
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Loan Application Process
Another area that you have significant control
over when it comes to being approved for a
business loan in 2022 is the actual application
process itself. Getting it right increases your
likelihood of being approved. Submitting a sloppy
or incomplete application puts your chances at
risk. Start by reviewing your companys finances
and decide how much funding you need, when you
need it, and the purpose of the loan. Ask
yourself these questions
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• How much do you need to borrow? You could secure
  a microloan for as little as a few hundred
  dollars, while SBA loans could provide a maximum
  loan amount of 5.5 million.
• How soon do you need the funding? You can receive
  money in as little as one day from an online or
  alternative lender, 36 hours with an SBA express
  loan, or up to three months for some SBA and
  traditional bank loans.

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• How good is your credit score? You will likely
  need a personal credit score of at least 670 and
  a business credit score of at least 160 to
  qualify for financing from a traditional
  financial institution or one backed by the SBA.
  Different lenders have their own minimum credit
  score requirements and definitions of good
  credit. If your credit history isnt good enough,
  you may be better off applying through online or
  alternative lenders that may not have as rigorous
  requirements.

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Financing options and providers

• Selecting the correct type of financing will
  improve your chances of getting approved. Here
  are some standard business loan options.
• Equipment Loans - Equipment financing is used
  to finance the equipment and machines small
  businesses depend on. They typically come with
  relatively low interest rates because theyre
  collateralized by the equipment theyre used to
  purchasing.

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• Term Loans - Short term business loans and
  long-term ones can be used for many business
  purposes. Term loans from banks, brick-and-mortar
  financial institutions, and traditional lenders
  come with relatively low interest rates but are
  challenging to qualify for. Its easier to get
  approved through online and alternative lenders,
  but interest rates are higher.
• Microloans- Microloans are offered to minorities
  and businesses in disadvantaged areas for
  relatively small amounts through a non-profit
  community-based lender.

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• Merchant Cash Advance - You receive financing
  based on the future earnings of your business.
  Credit scores are not considered during the
  approval process. Be aware that merchant cash
  advances come with very high interest rates.
• Business Credit Cards - Credit cards are a smart
  way to pay everyday business expenses and
  separate them from personal ones. Interest rates
  are typically too high to use them to fund
  significant business expenses.

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Why Choose Biz2Credit?

• Trusted partner for franchise funding
• Biz2Credit was founded in 2007 and has provided
  more than 10 billion in loans.
• Dedicated support team
• Tailored financing solutions

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