Small Business Loan Requirements

Generally, online lenders who specialise in easily accessible business loans can offer you finance with the least stringent requirements. For example, often these lenders will not require security and many are open to applicants who have imperfect credit histories. The only requirement you will need to meet is having been in business for around 6-12 months and to have a minimum monthly revenue in the area of $5,000.

While there will always be room for negotiation at the discretion of your lender, and they may be able to accommodate your finance needs with alternative products, you should not expect to be approved for the loan you have applied for if you have failed to meet the lender’s stipulated requirements. One alternative for those who can’t meet all of their lenders’ requirements is a low doc business loan – an option specifically designed to cater to those who can only provide limited documentation for their loan application, such as if your business is new and can’t supply the required files.

If you fail to meet some of the requirements attached to your loan approval, there are still alternative options that you can pursue. If you do not have a sufficient credit history for approval from certain lenders, you can explore bad credit business finance options, which there are plenty of online. Other alternatives to a business loan which might work for you also include a business credit card for smaller purchases, a business line of credit or even a government grant, provided you are eligible.

Yes – if your loan application is rejected, you can reapply later once all requirements are met. However, you should note that failed loan applications appear on your credit history and will be viewed as a negative ‘mark’ against your credit score. Therefore, you should take the time to check that you will meet the requirements laid out by your prospective lender to ensure that you application is approved the first time around. If you are unable to meet the requirements, you should wait until you can or find an alternative loan which is more suited to your business.

While there is no ‘one size fits all’ approach to preparing for a business loan application, there are some general approaches you can take to make sure you meet the majority of requirements. These include making sure that you have the necessary paper work in order, as outlined above, ensuring that your business’ financial records are accurate and align with the forecasts in your business plan and that your credit score is as strong as possible.

Yes – by opting to provide additional evidence of your suitability for credit approval, such as a comprehensive business plan, cashflow statements, balance sheets or security, you can improve your approval chances. This can lead to a greater approved borrowing range and being able to take out a loan with lower interest rates. This is because extra documentation can increase your lender’s confidence in you as an applicant.

As long as they’re used for business purposes, your business loan funds are highly flexible and can be tailored to your needs. For instance, you might want to boost your company’s available funds so you can run your next marketing campaign, fit out the front of your shop to make it more appealing to customers or purchase inventory. You can also use a business loan to help you purchase an existing business, such as a microbrewery or vineyard. You can also cover other outstanding debts, such as applying for a tax debt loan. Whatever costs you might need covered in the business space, a loan can help you.