To get a small business loan, the general steps are as follows:
- Check your personal and business credit scores since lenders typically evaluate both and higher scores improve loan eligibility.
- Determine how much money you need and what you will use it for, which helps in choosing the right loan type and amount.
- Gather required information and documents such as tax returns, bank statements, business licenses, and possibly a business plan.
- Check eligibility criteria like minimum credit scores, time in business, and annual revenue; some loans may also require collateral.
- Research and compare loan offers by looking at rates, terms, fees, and repayment schedules.
- Apply for the loan through banks, credit unions, online lenders, or other institutions—application methods can vary including online, in-person, or by phone.
- Review the loan agreement carefully before signing and receiving funds.
There are different loan options including SBA loans (microloans, 7(a) loans), lines of credit, and term loans. SBA loans are often easier for startups to access via community lenders, but may require more documentation and collateral for larger amounts. Examples of lenders offering small business loans include banks like TD Bank and Wells Fargo, online lenders, and nonprofit organizations. For Canada, the Canada Small Business Financing Program helps share the risk with lenders and has specific eligibility criteria. Maintaining a good business checking account with the lending bank and setting up auto-payments may also help with loan terms and approvals. This process is generally similar in 2025 as per current guidelines and offers.