Is a Bank Business Loan Right for My Company?

When it comes to funding your business, a bank business loan is a great option for the companies that can qualify for it. Unfortunately, many do not. But why is this the case?

The requirements for a bank business loan are not as clear as one would think, especially because there are so many of them. Even if you qualify based on the outlined requirements a bank may find a reason to reject you. Despite all the rules and regulations put in place to make sure fair lending standards are upheld, depending on the type of business you operate, a bank can reject you for the simple nature of your business. That is not to say that every bank will reject you for their business loan product. But you have to ask yourself, how much rejection can you take?

So what are the requirements for a bank business loan?

Superb Business and Personal Credit History

A bank wants to see that their borrowers have taken care of their lending opportunities and debt responsibilities in the past. If an owner has misused their personal credit it can reflect poorly on the business as a whole. Not to mention, if a business has not started a business credit history this can be a red flag for a bank because they have less to go off of.

Business History

Unlike a personal loan where your credit history is one of the most important factors, your business’ history is important when it comes to a bank business loan. A bank will look for how long your business has been operational. Typically, they are looking for at least two years. They want to know that you have been able to deliver profits after all of your operational expenses. This helps them know if you have the funding to fulfill your debt responsibilities to them.
Banks are not looking at risky businesses for lending opportunities because of the risk level associated with them. When it comes to a bank business loan in the modern world of lending, the interest rates are low. Although this is a great thing for borrowers, this means that banks do not have a wide margin when it comes to their profits. In times like these, especially with business loans, banks are really only looking for safe opportunities.

Business Plan

Most banks are looking to understand how you plan to grow your venture over the next three to five years. A proper business plan will take a lot of time to put together, time that not all business owners have. A financial institution will look to understand why you need the funds and how you plan to use them. This should not only be outlined in your plan but you need to be prepared to talk about them in the meeting.

Now that you have gained an understanding of what the requirements are for a bank, you may be thinking, you don’t qualify. Don’t worry, you are not alone. There are a lot of businesses that can’t qualify for a bank business loan. But that does not mean there are no other opportunities out there for you and your business.

One of those options is a merchant cash advance and it is designed for businesses just like yours! It can be a great option that has simple requirements that most new businesses can qualify for. Even if you have poor personal or business credit, you can qualify at eBusiness. Even the amount is comparable to a bank business loan. At eBusiness, we can get you anywhere between $5,000 and $500,000 in cash fast!

Unlike a bank loan, we are not going to ask you how you plan to use the funding because we don’t claim to be experts in your business field. We are experts in getting the right business the funding they need! You are the expert in knowing how to grow your company!