In order to keep running small businesses require some sort of financing usually in the form of business loans. Business loans can be applied with banks and financial institutions that help businesses to start-up as well as operate. Loan application process often gets complicated for a first-time applicant. In this article I will list down some of the steps to apply for a business loan with a bank:

The first step towards applying for a business loan is to clearly understand what you will do with the loan amount (for your business) and therefore how much money you will need. You need to be very specific here. The documents which can help you are your usual financial statements. For a start-up you can refer to the financial part of your business plan for a clear understanding of where you stand now and where you want to reach.

All major financial institutions will ask for your business plan and report. So make sure you have a clearly drafted, simple and yet promising business plan ready with you (take few prints for submission). You will also have to make a good presentation based on your business plan.

Taking help from experts such as your local SCORE office or SBDC office (part of the Small Business Administration) can benefit you in a lot of ways. For example if you are part of a start up, these people can really be worth your effort for zero fees. They not only let you clearly see your financial needs but also help in the loan application process.

Your credit history is very important for all the banks where you wish to apply for loan. This is more important if you are a start-up firm or a business entity with less than three years of experience. Your credit reports should be as clean as possible for loan application.

To get approved for a loan (hassle-free) you will need a credit score of 700 and above. Now that your business plan and credit report are ready, you can start looking for the best commercial banks near your office. Small banks can help small business owners more than big banks.

You can also approach credit unions for your bank loan. The most viable option is to check with fellow business men about the features of their bank’s loan unit. Be very clear about collaterals and your assets as these are important points as far as banks are concerned about your business.

Finally rehearse your presentation and make the appointment with the loan officer of the first bank in your list.