Obtaining a business loan doesn’t have to be a difficult procedure–if you do your homework.
Understanding the requirements of your company and then seeking the financing that best suits your needs can boost your chances of getting approved.
Here’s a checklist of five steps to take before you apply for an online business loan.
Step 1: Decide on the Loan Type
There are several types of small business loans on offer. When you begin researching your options, you will no doubt come across the following:
- Small Business Administration (SBA) Loan
- Long-term and short-term business loans
- Business line of credit
- Invoice financing
- Equipment financing
- Merchant cash advance
- Business overdraft
- Business microloan
- Business credit card
What is the Most Useful Type of Loan for a Small Business?
The most effective type of small business loan will depend on different factors, including your company’s needs, as well as the length and terms of the loan.
Generally, banks prefer to offer loans to business owners with “good” or “excellent” credit scores of 690 and above. If your credit score is lower than this, you should consider an alternative lender offering business loans online.
Two of the most popular online business loans include a term loan and a merchant cash advance.
Not only are they easy to apply for online, but these small business loan types also have minimal eligibility requirements. Due to their online application process, small business owners are also able to receive an application outcome in as little as 24 hours. Once approved, the required funds are then deposited into their nominated bank account within just days.
Step 2: Check Eligibility
Before you apply for your selected business loan, it’s important to guarantee that you meet the lender’s eligibility requirements.
To qualify for an online business loan, you will generally need to have the following:
- At least 6 months in business
- Over $10,000 in monthly sales
Is a Business Loan Easy to Get?
If you meet the requirements set out above, then obtaining a business loan can be a straightforward process, depending on which lender you choose.
At Zinch, for example, we aim for speed, simplicity, and transparency. We simply ask that you fill out a short form with your basic business information and provide a copy of your most recent bank statements. Then, one of our loan specialists contacts you to discuss the option that best fits your needs.
Can I get a business loan with a bad credit score?
There are a number of bad credit business loans you can consider if you’re worried about a low credit rating. A merchant cash advance, for example, is one of these.
For a merchant cash advance, your lender will normally examine your daily credit card sales rather than your creditworthiness when deciding whether to approve your application. Therefore, if you have consistent sales, you should have no trouble getting accepted for this type of financing.
Step 3: Compare Lenders
Generally, you’ll want to obtain the business loan with the best terms. Other considerations, such as funding speed, however, may also be important to your company.
To help you decide which lender is best for you, ask the following questions:
- How much money do I need?
- What do I need the funds for?
- How quickly will I need access to the funds?
- Do I require constant access to a line of credit?
- Am I prepared to offer my own or my company’s assets as collateral?
Step 4: Gather Documents
Prospective lenders will let you know which documentation they need to review your company and finances.
What Proof Do You Need for a Business Loan?
At Zinch, you only need three months of bank statements and an application. However, some lenders might require more documents such as a business plan, a business financing proposal, and personal details about the owners of your business
Step 5: Apply for an Online Business Loan
Your chances of obtaining a small business loan will be significantly higher after careful planning. The money from the loan can then be used to maintain business operations during difficult economic times or to boost cash flow during slower months. If you plan it properly, it can be the most crucial decision you make as a small business owner.
Are Online Loans Safe?
Online lenders must adhere to the same stringent lending guidelines as traditional banks. Therefore, online loans through reliable lenders are safe.
How Fast Can I Get an Online Business Loan?
Online lenders like Zinch makes loan decisions in 24 hours and have funds approved in as little as two days.
Apply for an Online Business Loan Today
Contact us at (714) 500-6622 to learn more about your small business loan options with Zinch. You could qualify for up to $250,000 in just 24 hours.
