Credit score should be your first thought when you think of how to get a business loan. Most banks need a credit score of at least 650 from your previous loans. Before you get a loan, prepare your credit report to increase chances of approval. When shopping for loans with a bad credit score, check for banks that offer loans to business with low credit score.
Some banks also consider the age of your business. For most business lending institutions, a business needs to be at least a year old to qualify for a loan. Over a period of one year, the business has financial statements and forecasts to show. For the year the business has been in operation, the bank might need annual revenue statement.
As a business, you need to understand loan terms and conditions, how to use business loan repayment calculator and how your business will cut costs to repay a loan fast. Most banks offer fast business loans but you have to prove that you can repay.
Proving that you can repay a small business loan requires you to present operating income and sometimes potential collateral. While collateral might not be needed to apply some secured business loans, some institutions will request for one. Ensure you use a commercial loan calculator to understand how long it will take you to repay the loan.
It is easier to get invoice finance but you need to shop around for the best small business loans. Be careful when banks promise you low interests rates on unsecured loans as there might be a trap in form of hidden charges.