Getting a business loan can be challenging, especially for small and medium-sized businesses (SMBs). Lenders have strict criteria, but understanding what they look for can improve your chances. In this guide, we’ll walk through how lenders evaluate businesses and how the Boundless team can help you find the right lender.
1. Financial Statements: The Core of Your Loan Application
Lenders assess your business’s financial health through key documents, including:
Income Statements: Show your earnings and expenses.
Balance Sheets: List assets (what you own), liabilities (what you owe), and equity.
Show how much cash your business generates and whether it covers expenses.
Cash Flow Statements: Show how much cash your business generates and whether it covers expenses.
Bank Statements: Most lenders require financials for loans over $200K. For cashflow-based loans, lenders typically review deposits and revenue from bank statements. It’s crucial to have bank statements for all business accounts ready to help lenders assess your financials.
Tip: Have your financial documents ready before applying. This saves time and makes a strong first impression. Lenders also prefer businesses that have been generating revenue for at least six months, as this demonstrates stability and reduces perceived risk.
2. Credit History: Building Trust with Lenders
Your business’s credit score is a crucial factor in loan approval, reflecting how well you’ve managed past debts. A higher score shows reliability. Lenders consider:
Payment history: Do you pay your bills on time?
Credit utilization: Are you using your available credit responsibly?
Credit history length: How long has your business had credit?
At Boundless, we review your credit history and connect you with lenders that are likely to approve your application.
3. Business Plan: Demonstrating Your Vision
Lenders want to understand how you’ll use the loan and how it will contribute to business growth. Key parts of the plan include:
Revenue Projections: Clear estimates of your expected earnings.
Loan Purpose: A breakdown of how the loan will be used (e.g., marketing, inventory, payroll, working capital).
4. Collateral: Securing the Loan
Some lenders require collateral—like property or equipment—as security in case you can’t repay the loan. The more valuable the collateral, the better your chances of getting approved with favourable terms.
How Boundless Can Help You Get Matched with the Right Lender
The Boundless team simplifies the loan process for businesses. Here’s how we help:
Tailored Matches: Based on your application, we match you with lenders most likely to approve your loan and fit your needs.
Expert Guidance: We help organize your application to meet lender expectations.
Easy Process: We guide you through every step, making the loan process faster and less stressful.
Let Boundless do the heavy lifting. By working with Boundless, you avoid the guesswork of finding the right lender. We provide personalized support to help secure the best loan options for your business.
With just one simple application, Boundless will connect your business with the right lenders. Let’s chat to discuss how we can help you grow your business.
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