How to Get a Loan for a Small Business

As a small business owner you need several things in order to succeed and help your business to grow. Skills, ambition, hours of hard work, and knowledge regarding how to get a loan for a small business probably top your list for success. But how do you find funding that fits your business, yet limits your risks?

The solution is to understand your own, unique business needs and research the options that provide terms that fit. The right loan or funding option really depends on your situation. You will find each product has its own set of qualifying criteria, payment schedules, risks and benefits.

According to, the wise entrepreneur starts with examining what each lender (the Small Business Administration, banks, credit unions and alternative lenders) offers in funding and loan products, as well as their requirements to qualify.


The Small Business Administration

The Small Business Administration (SBA), may seem like an obvious answer to your funding needs. But there are things to consider before you apply. The SBA is a government agency created to help small business owners like yourself, but you must be able to meet their qualifying guidelines and be prepared to wait up to 90 days for the application to process.

The SBA offers a general purpose 7(a) and 504 loan programs, for special purposes and business needs, which covers things like start-up costs for a business, expanding a business, or cash flow to keep a business running smoothly. The SBA does not do the actual lending, but connects you with one of their partner lenders.

Things to consider:

  • You must have very good credit and valuable collateral to qualify.
  • This is a solid option if your business was close to qualifying with a bank, and just barely missed approval.
  • Your credit history and your overall business plan can be scrutinized in the decision process for the loan.
  • Your loan will take more time to process because you are satisfying both the SBA and a lender. You may wait up to 90 days or more to get your loan.
  • Your resume can count for or against you. The SBA looks at your skill level in running your business.


The Conventional Bank

Banks may be the next obvious place you think to look. They offer a traditional path in small business loans, but the path is not an easy one to take for most small business owners. According to, banks have strict guidelines that typically exclude many small businesses from qualifying.

Things to consider:

  • You will need to have an extensive business credit history and an excellent credit score.
  • You will need valuable collateral you can offer in case you cannot repay the loan.
  • The bank will ask for an extremely detailed business plan outlining your past, present and future with this business. They will want to know you have researched your customer demographic, who your competitors are, and that you have created a solid marketing plan to beat out your competition.
  • You will need to turn over your tax records, bank records and all financial documentation, both personal and regarding your business.
  • The lengthy application approval process takes at least 30 days to complete.


Credit Unions

If you are a member of a credit union, you know they are much like a bank, but are privately owned by their customers in a nonprofit status. They offer small business loan products comparable to a bank and the process is similar.

Things to Consider:

  • Your credit union will scrutinize your credit score, collateral and business plan. Documentation is still pretty heavy.
  • Their guidelines may be slightly less strict when compared to a traditional small business loan from a bank.
  • You need to be an active member of the credit union. This means opening accounts with them and meeting their member qualifications.
  • There is a lengthy application that takes 30-60 days to process.


Alternative lenders

According to, many small business owners, even franchise owners, are finding this to be the best avenue when applying for small business funding. Alternative lenders are the leading way to find a solid fit for almost any borrowing situation, whether you are a successful, established business or are young and looking to grow.

Things to consider:

  • Alternative lenders give you several options to choose from.
  • They offer greater ease in the qualification process, speed in getting you your money, and flexibility in the terms and repayment schedule.
  • The application is straightforward and easy, and typically completed online.
  • You will usually be asked to provide a few bank statements to demonstrate the overall health of your business, but that is all. Your credit score does not need to be excellent to qualify.
  • Some programs can get you money in hand within days.



When you have questions about how to get a loan for a small business, the first step is gathering information. Take the time to learn about the small business funding options available to you. To learn more about creative business loan options, contact Credibly today!

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