Article Summary: Applying for a small business loan can be stressful. And, completing a small business loan application can be pretty intimidating.
OnDeck's senior small business credit advisor, A.J., shared some suggestions for getting prepared for completing an application:
- Go over your business credit profile and address any concerns or potential red flags
- Get your business identity in order—a tax I.D. number, separate personal and business expenses, get a separate company phone number and website
- Start building your business credit by creating trade credit relationships with suppliers who report your history to the credit bureaus
- Work to protect or strengthen your personal credit score—depending on the lender, a score below 500 will make it really tough to get a loan
This is all great advice. Keep reading for more advice and to learn more.
Applying for a small business loan is not as complicated as it seems and it doesn’t need to take up a ton of your time. Yes, there is an application, and yes, you will need to provide some information about your business. With many online lenders, the application is as easy as it can be.
To make it even easier I spoke with AJ, OnDeck’s Senior Small Business Credit Advisor. He helps small business owners deal with issues with their Secretaries of State, UCCs, liens you may not know about, or other public filings. He also assists our loan advisors when business owners have questions about their business credit. To sum it up, he’s the go-to guy when people have questions about what they need to successfully apply for business financing, with Ondeck.
Because we want you to be 100% ready to apply before you begin the online application, or call to speak with a loan advisor,we came up with a checklist of items and qualifications you may need to have ready, so you don’t waste your time with any back and forth.
Consider these items before you apply for a business loan or business line of credit:
- Go over your business credit profile and address any concerns
- Develop your company identity
- Become a legal business entity such as an LLC
- Get a business Tax ID number
- Separate business bank account with at least 5 deposits each month
- Separate company phone number
- Separate company website
- Have several vendors that report to the credit bureaus
- Make sure your personal credit score is above 500. (A score above 625 will make it more likely you will be approved—and at a better rate)
Have these ready to make the application process as smooth as possible
- A good cause (reason) to get business financing
- Create a one-pager of your business identity, to have in front of you:
- How long you’ve been in business
- How many employees you have
- Tax ID number
- Average gross annual revenue
- Download the most recent 3 months of business bank statements from your bank’s website so you can easily upload them to the online application or email them to your loan advisor. (here are instructions for some popular banks)
- Research if you have any public filings on your business
- Check if you have a UCC filing on your business
- Make sure your Secretary of State filing is up to date (Sole proprietors do not need this)
- Be aware of any liens or judgments on your business