If you’re wondering how to apply for a small-business loan, take the time to do your research and find the right fit. It can take months to get a business loan, especially one backed by the Small Business Administration. By understanding all your options and not rushing the process, you’ll be in the best position to get approved – and avoid wasting time or money.
|1||Decide where to apply for a small-business loan||
The best place to apply for a small-business loan will usually be wherever you qualify for the lowest interest rate. But the following questions should also influence your decision:
If multiple lenders meet your needs, see if any let you prequalify for an estimated interest rate. This option will likely be more common with online lenders. For traditional lenders like banks, consider speaking with a loan officer before applying to ensure you meet the qualifications.
|2||Get your application materials||
Each lender may require different documentation for its small-business loan application. Most will likely want some form of the following:
The SBA’s loan application checklist is a great place to start if you’re not sure what you might need. Government small-business loans typically require more paperwork than other options, so if you have everything the SBA wants, you should be well-prepared for whatever a lender asks for.
|3||Review your small-business loan application||
Before applying for a small-business loan, consider having someone else look over your application, especially if it includes information that could be open to interpretation, such as a business plan. One resource is a Small Business Development Center, or SBDC.
SBDCs are local organizations partially supported by the federal government. Each branch includes qualified business professionals who can provide assistance on topics such as running a business and obtaining financing. You can locate SBDCs in your state using the SBA’s finder tool.
Make sure to double-check your business loan application includes everything the lender asked for and in the appropriate format. The lender may have questions as it evaluates your application, but by reducing unnecessary back and forth, you’ll get a decision as quickly as possible.
|4||Follow the lender's instructions to apply||
Once everything is in order, how you’ll actually apply for the small-business loan will depend on the lender. For example, online lender Fundbox lets you link your business accounts through its website to qualify for financing.
More traditional financial institutions, such as banks and credit unions, may make you apply at a branch or over the phone. For example, Bank of America accepts online applications for some of its products – like its business auto loans – but requires an in-person or phone appointment for others.
No matter how you submit your application, find out the lender’s typical turnaround time. That way, you’ll know when to expect a decision about whether you’ve been approved.