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Five Key Steps to Take Before Getting a Business Loan

As a small business owner, you probably have big plans. Sometimes a capital injection is helpful, though, when it comes to starting or expanding your small business. A business loan can help. Here are five key steps to take before getting a business loan.

Have a clear purpose for the funds

Knowing what you need the money for helps you and your lender understand what type of loan is most appropriate. For example, if you want to purchase equipment, an equipment loan might be the best option. If you would like to buy land, a real estate loan might be the way to go.

Figure out how much money you need

Where you would like to open a second location, buy new machinery, or expand your current business, run the numbers to see how much it will cost. Thorough research and an accurate number for the funds you need will help you avoid possible financial problems that could occur if you under or overestimate.

Check your credit scores

As a small business, you probably have two types of credit scores: business and personal. If you own a sole proprietorship, lenders may focus on your personal credit score when considering your loan application. If you’ve been in business a while, your personal credit score might not matter as much, while it’s still a factor in the loan decision. 

Put together the required documents

Each lender might have different documents and information needed to complete your loan application. Once you know where you would like to apply for a loan, check with that lender to find out what documents and information are required. Some things you may need: your business’s financial statements (income statement, balance sheet, and cash flow statement), three to five years’ worth of financial projections, business bank statements, business tax returns, leases and business licenses, and a written business plan. 

Apply

First Independent Bank has many different business loans to meet your needs, and our experienced lenders can offer both sound advice and competitive interest rates. We’ve helped companies with manufacturing equipment financing, retail business financing, and industrial financing. We’ve helped secure a business operating line of credit, and we’ve helped establish business real estate financing for the start or growth of a company.

Talk to one of our business banking specialists today to find the right financing solution for you!

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