When you apply for a long-term business loan, a lender will look at a variety of factors to determine your “creditworthiness,” which is basically a measure of how likely it is that you will pay back the loan.
During the application process for a small business loan, business lenders will ask for your credit history, such as your personal credit score, and your business financial documents, such as your tax returns, to establish whether you will be able to add a loan payment without breaking the bank.
If you meet certain requirements for qualified borrowers, such as the minimum credit score and adequate cash flow, a lender will typically make you a loan offer. Depending on how qualified you are, your interest rate may vary.
Be sure to read the full loan offer before accepting to ensure you are happy with the terms and can repay the loan.