There’s no doubt that a small business loan can be life-changing for your venture, but how can you increase your chances of securing this funding?
Before you apply for a business loan with a lender, you’ll want to make sure both you and your business are in the best position to seek finance. Today, we’re going to discuss how to apply for a business loan, including what you need to apply for a loan.
Do Your Research: What Small Business Loan is Right For You?
Before you begin the business loan application process, you’ll want to do your research to determine whether a business loan is right for you. Be sure to gather as much information as possible to help you decide what kind of funding is best suited to your needs.
As you may not already know, there are a variety of business loans – both secured and unsecured – which you can seek for your business. We’ve listed the most popular loan types below. Simply click-through to learn more about each one.
- Unsecured business loans
- Secured business loans
- Short-term business loans
- Long-term business loans
- Business line of credit
- Invoice financing
- Equipment financing
- Merchant cash advance
- Business credit card
- Business overdraft
- Business microloan
- Aboriginal & Indigenous business loans
- Startup business loans
- Professional business loans
What business loan type is most-suited to your specific needs and wants?
Apply for a Small Business Loan Online
These days (especially with alternative lenders), you can apply for business loans online, saving you time and effort with your application. Every lender’s application process is different, so it’s important to read their FAQ.
At Lumi, our online business loan application can be completed within just minutes, with applicants only needing a few details on-hand.
What Do You Need to Apply for a Business Loan?
Again, every lender is different, with alternative lenders and traditional lenders varying quite considerably in their application process. At Lumi, for example, you only need the following to apply for a fast business loan online:
- ABN / ACN
- Driver’s License
- Business bank account details (for online banking)
Additionally, you can even link-up your cloud accounting software to complete the application, or we also accept your accounting statements as PDFs.
While this basic information lets you begin the loan application process, a lender may also ask for extra information to assist them with their lending decision. This might also include:
- A business plan communicating your business model, demonstrating your understanding of the market and validating your goals with data
- An explanation of the purpose of the loan and how you intend to use the funds
- Your recent tax returns
It’s best to have as much relevant information on-hand during your application so you can answer any questions as they arise. For more tips on putting together a successful loan application, read our article What Lenders Look For in Your Business Loan Application.
What are the Minimum Requirements to Apply for a Small Business Loan?
Your lender should be upfront about the minimum loan requirements prior to you applying, but just as an example, we only require the following for a small business owner to apply for a Lumi loan:
- An ABN or ACN
- A minimum of 6 months in business
- A gross annual turnover of at least $50,000
How to Write a Business Plan
Sometimes, a lender may also ask for information regarding your business plan to determine your suitability for a loan. If you haven’t already put together a business plan for your venture, you’ll want to do so ASAP to prepare for a successful loan application.
Creating a business plan doesn’t need to be daunting, nor does it have to take days or weeks to complete. Basically, you want to provide enough detail to motivate a lender or investor to finance your business.
Thankfully, we’ve put together a detailed guide on How to Write an Effective Business Plan to help you get started.
How to Apply for a Small Business Loan: Additional Reading
We’ve also written a number of helpful resources to assist you in applying for a business loan:
- 20 Questions to Ask Before You Apply for a Business Loan
- The Beginner’s Guide to Small Business Loans (Everything You Need to Know)
- 30 Small Business Loan Terms You Need to Know
- 15 Ways You Can Use a Small Business Loan to Help Your SME
Want to find out more about Lumi? Check out our helpful FAQ page.
For a fully transparent small business loan that takes just minutes to apply for, get started with Lumi today.