Getting a business loan is a big step. Whether you’re just getting your business off the ground, or you’re adding new equipment and services, a business loan can help you reach new heights. While large banks may make the process difficult or even impossible, small banks and credit unions can help you get the finances that you need to get started. Getting your business loan can be overwhelming, especially at first. That’s why we’ve put together this list of steps. Follow these guidelines, and you’ll be on your way to getting your loan.
Choose Your Loan Type
First, you should understand that you’re not limited to a single type of loan anymore. When most people think of business loans, they think of term loans. With term loans, you receive a lump sum of money that you can spend on your business. They often require a fixed repayment schedule. However, these days, you have other options. A term loan doesn’t work for everybody. You might choose from several loan types including, but not limited to, the ones listed below.
- Equipment loans provide funding specifically for new equipment and machinery. They often have a lower interest rate and a higher sum than a term loan.
- Business Lines of Credit let you borrow money on your schedule up to a certain limit. Your limit “resets” when you repay what you borrow, so you can use your line of credit whenever you need it.
- Merchant Cash Advances let you pay back your loan by using a percentage of your credit and debit card sales.
Find Your Institution
Once you know what kind of loan you need, your next step is finding the right institution. We recommend using either a local credit union or a community bank. For many business owners, it’s almost impossible to get a good loan through a big bank. Unless you have a near-perfect credit score and plenty of collateral, you may not meet all the necessary requirements. You’ll have a much easier time with a smaller institution, and you’ll support local economies this way.
Gather Your Documents
Next, gather whatever documents you’ll need for your loan application. Your financial institution will let you know what kind of documents you’ll need. Most places will need your driver’s license number, credit score, and business documents
Submit Your Application
Now, all that’s left is to submit your application. This process should be pretty easy. Many institutions will let you send an application online, while some require you to be there in person. Either way, the process shouldn’t take you more than a few minutes. Afterward, you’ll just wait to find out whether you’ve been approved.
Need Some Help?
When seeking a business loan, plenty of business owners get stuck on the second step: finding the right institution. At BundleFi, we get it. Those big banks take up a lot of space. So, it’s hard for smaller institutions to set themselves apart. How do you know that you’re not missing out on the perfect financial institution for your loan? That’s where BundleFi comes in to help. At BundleFi, we connect business owners to small, personal financial institutions. All you do is let us know what your needs are. Contact us to get started. We’ll help you find your perfect loan source.