How to get a business loan

Finding a business loan

Running a small business presents financial challenges in the best of times, but these problems are amplified during a pandemic. According to the 2021 Small Business Credit Survey by the Federal Reserve, 80 percent of companies experienced financial challenges in the past 12 months. This is a significant increase from 2019 when only 66 percent of firms experienced financial struggles.

While 62 percent of these business owners tapped into their personal funds to cover their costs, others sought out funding through loans and grants. Whether you want to rebuild your finances after the COVID-19 pandemic or simply want to launch your new idea, a business loan can give you the working capital you need.

If you want or need to apply for a business loan, use these steps to understand the application process.

Gather your financial information

Banks and other creditors will determine your loan terms based on your current finances. The better your credit and higher your income, the better your terms will be. When you shop around for different loan providers, they’ll all ask for the same information, so you can save time by gathering this information and keeping it on hand.