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How easy is it to get a small business loan? A small business loan can help many small businesses accelerate their growth. It's one of the most popular ways of financing a small business and could be
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Product Distribution Strategy
September 6, 2019
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How Easy Is It to Get a Small Business Loan?

How easy is it to get a small business loan? A small business loan can help many small businesses accelerate their growth. It's one of the most popular ways of financing a small business and could be used for a variety of purposes, from buying new equipment to marketing expenses. However, many small business owners worry about how difficult the loan application process is and whether they will be able to get a small business loan. Fortunately, there is an excellent selection of small business lenders available, making it easier for any business to find the right loan. A good understanding of the process will help small businesses ensure success with their application.

So, how easy is it to get a small business loan? Business loans are not difficult to apply for and secure for businesses that prepare themselves. Loans are regulated by the Federal Reserve System across the country, ensuring that small business loans are offered fairly. Getting a small business loan begins with exploring available lenders, as well as their requirements, to find the most appropriate lender for your business.

How Do You Qualify for a Small Business Loan?

Qualifying for a small business loan could be easier than you think, but there are still various requirements that you need to meet. Lenders might look at both the personal credit history of the business owner and the credit history of the company if you are already in business. In fact, many lenders will require that you are in business for at least a year before applying.

Before applying for a business loan, it's worth getting a few things in order. Knowing some of the common requirements for a loan will help you to improve your business' eligibility.

  • Annual revenue - some lenders require an annual revenue of a certain amount, often of between $50,000 and $150,000
  • Net operating income - lenders might also be looking at your business income compared to expenses, sometimes looking for an income at least 1.25 times greater than your outgoings
  • Secured business loans will require an asset to secure the loan against
  • Many lenders will want to know how you intend to use the money that you get from the loan

All small business lenders can have different requirements, so it's essential to understand what a particular lender might be asking for before making a small business loan application. Be sure to gather important documents, such as tax returns, income statements, and financial projections.

Is It Hard to Get a Small Business Loan?

How easy is it to get a small business loan? Getting a small business loan can sometimes be difficult, but there are various options available for every business. Going through traditional lenders such as banks can sometimes make it more difficult, and some businesses might want to consider a different type of small business loan.

There are a number of steps that small businesses can take if they want to be successful when applying for a small business loan.

  1. Build both personal and business credit scores so that you can prove that you are capable of repaying debts. Your score is based on payment history, amount of debt, how long you have had credit, types of credit that you're using, and recent credit inquiries.
  2. Spend some time researching possible lenders and loan types to help you decide between short term loans, business lines of credit and other possible options, as well as find the right lender for you.
  3. Ensure you have all of the necessary financial and legal documents to make your application. Getting your paperwork in order is important to be able to present your case.
  4. Have a strong business plan: Many lenders will want to see your business plan, including current and projected financial statements. It needs to show that you have the cash flow to cover your current expenses, plus loan repayments.
  5. Provide collateral if necessary (for secured loans).

Get everything in order before you start to apply for a small business loan. You especially might need to spend some time working on improving your credit score before you can borrow any money.

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Can You Get a Small Business Loan with Bad Credit?

If your personal credit score or your business credit score are low, you might worry about whether you can secure a loan. If you have time, you can improve your score through business credit cards and boost your personal credit too. With a bad credit history, a loan from a traditional lender can be tough. However, there are alternative options.

You can consider alternative funding options such as a microloan, which often come from credit unions. Another possibility is a merchant cash advance, which you can use if you are having cash flow problems. Exploring alternative funding is worth it if you need to borrow money for your business.

How Easy Is It to Get a Small Business Loan?

A small business loan isn't necessarily very easy to get, but many small businesses are able to find the right lender. The best thing to do is to ensure you have excellent personal and business credit reports, which will give you access to the best lenders and a better choice of interest rate.

When you are looking for the right small business loan for your business, there are a few things to consider. Try to do the following when searching for the right loan:

  • Compare loans using a comparison tool to find the most appropriate loans and lenders
  • Take a look at the interest rate to search for the best deals
  • Pay close attention to the requirements for the loan to ensure that your business can meet them
  • Adjust the loan amount that you ask for to see if you can find better deals, and try speaking to a financial advisor

Applying for and securing a business loan can sometimes be tricky. Finding the best loan for your circumstances will help you and there are always alternatives to consider.

Partnering with R+L Global Logistics for Your Business

Keep your finances and your cash flow in order by partnering with R+L Global Logistics for your business. Our affordable services offer a range of help with shipping and supply chain management, including warehousing and logistics.

Shipping your products both domestically and internationally can help you to grow your business. When you seek a small business loan or another form of credit, you can secure the necessary funding to invest in expansion and distribution. R+L Global Logistics is here to assist with all of your business's needs. When you want to know "how easy is it to get a small business loan?", we can help with that too.

Have more questions? Contact us and we’ll help you better understand the e-commerce fulfillment process.

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