Need funding to expand, buy equipment, or manage cash flow? Getting a small business loan can be challenging, but preparation is key. Ensure your business shows financial stability, gather necessary documents, and maintain a strong credit score.

1. Get Approved for a
Small Business Loan

2. There are several types of loans available for
entrepreneurs and small business owners, each
designed to help with different areas of your business.
Understanding what the options are can help you
choose the right financing for your situation
• Term Loans: Term loans are one of the most
common types of small business financing. With a
term loan, you receive a lump sum of money upfront
that you then repay with interest over a fixed period
of time, typically a few years. These loans are perfect
for large, one-time investments like buying
equipment, expanding your product line, or buying
out a competitor.
Types of Small Business Loans

3. • SBA Loans: Small Business Administration (SBA)
loans are similar to traditional term loans, except
that they are backed by the U.S. SBA, reducing the
risk of default for lenders. As a result, they have
better interest rates and terms, but at the same
time, typically take longer to be approved because
they come with more requirements and red tape.
• Commercial Real Estate (CRE) Loans: If you’re
planning to purchase or refinance commercial
property, CRE loans may be the option for you.
These loans allow you to purchase real estate or
buildings using the financed property as collateral
for the loan.

4. • Revenue-Based Financing: This type of financing is
not a loan, but allows you to repay what you borrow
based on a percentage of your business’s revenue.
It’s a flexible option, especially if your income
fluctuates, meaning that you’ll pay less when your
revenue is down and more when it goes up.
• Business Lines of Credit (LOC): Also not a loan, a
business line of credit is like a credit card without the
plastic. You’ll be approved for a maximum amount of
credit that you can then draw on as needed, only
paying interest on what you use. This makes it a
great option for managing cash flow, covering short-
term expenses, or addressing unexpected costs.

5. The key factors banks are looking for in your application
are referred to as the “5 C’s of credit” and include
character, capacity, capital, collateral, and conditions.
• Character: Lenders want to see that you are a
responsible borrower, so will check your credit history,
looking to see if you have a history of making debt
payments on time. If you’re a startup or new business
owner, having a good personal credit score can also
help.
What Are Banks Looking for
When Reviewing a
Business Loan Application?

6. • Capacity: Capacity measures your ability to repay the
loan. Lenders will closely examine your business’s cash
flow, revenue, and existing debt obligations to
determine if you have sufficient income to cover the
loan payments. If your business has been showing
consistent cash flow for years and you can
demonstrate solid financial performance, it will help
you convince lenders that you are able to take on
additional debt.
• Capital: Capital refers to the amount of money you’ve
personally invested in your business. If you’ve self-
financed your business, it shows investors that you’re
highly committed to its success and that you’re
confident in the direction it’s headed. Lenders like to
see this, and will be more willing to offer you financing
because you have skin in the game.

7. • Collateral: Collateral refers to assets that you pledge
as security for the loan, including business assets, real
estate, equipment, or inventory. Collateral reduces the
lender’s risk because it provides a way to recover their
money if you default on the loan. If you don’t have a
very strong application, offering up more collateral
may be enough to get the lender to still offer you
financing.
• Conditions: Conditions include the overall economic
environment, industry trends, and how you plan to
use the loan. Lenders will consider how external
factors might impact your business’s ability to repay
the loan, and they will want to know how the loan will
help you improve your business over the coming
months and years, as this will be key to your ability to
repay them.

8. Once you’ve completed the initial steps in preparing
your business loan application, it’s time to focus on
strategies that will enhance your chances of approval.
Here are a few tips that can help you secure the small
business financing you need:
• Showcase Your Cash Flow Management: Banks
need to see that your business earns enough cash to
cover the loan repayments and your regular
expenses. Your application needs to show that you
know how to manage cash flow, so be sure to
include historical financial data and future
projections.
Tips for Getting Your Business
Loan Approved

9. • Emphasize Your Business’s Strengths: Every
business has unique strengths that set it apart from
the competition. Whether it’s a loyal customer base,
a strong market position, or innovative products,
make sure to highlight these strengths in your loan
application. Highlight your competitive advantage as
a way of helping lenders understand why offering
you financing is a good investment.
• Be Transparent About Risks: While it might be
tempting to downplay risks your business might face
in your loan application, transparency is key to
building trust with lenders. Acknowledge any
challenges your business faces and outline the
strategies you’ve implemented to mitigate these
risks.

10. • Tailor Your Application to the Lender’s
Requirements: Different lenders have different
criteria for approving loans. Some may prioritize
your credit score, while others may focus on your
business’s cash flow or collateral. Before submitting
your application, research the specific requirements
of the lender you’re applying to and tailor your
application accordingly.
• Explain How You Plan to Repay the Loan: Lenders
don’t just want to know how you will use the loan,
they also want to know how you’ll repay it. Be sure to
include detailed financial projections, sales forecasts,
and cash flow predictions that include your loan
payments.

11. Why Choose Biz2Credit?
• Trusted partner for franchise
funding
• Biz2Credit was founded in
2007 and has provided more
than $10 billion in loans.
• Dedicated support team
• Tailored financing solutions

12. Thank
You