What do I have to do to get a loan?
Obtaining a loan depends on many factors including length of time in business, financial condition, credit history, collateral and amount requested. Your bank is in business to make money. Consequently, when a bank lends money, it wants to ensure that it will be repaid. The bank must consider the "Five C's" of credit each time it approves a loan. To learn more about lenders' requirements, read The Five C's Basic Lending Guidelines.
When applying for the loan, you must provide historical and/or projected financial statements as part of a solid business plan. Be prepared to answer these questions:
- How much do you need to borrow?
- How will you use the loan?
- How will you repay the loan?
- What will you use as collateral?
The specific document requirements vary with each lending institution. To start the process, the bank will provide you with its application and list of documents to submit with the completed application. The process of applying and gaining approval for business financing can be an overwhelming process. In fact, lengthy applications and tough approval processes often deter many businesses from even applying. The McLennan SBDC can assist you with the loan or capital access process.