Unfortunately, all too often, business owners go on living their lives and running their businesses without enough thought or consideration for the near future. That’s not the worst thing in the world when things are going just great, although it can still cause problems. But the problem comes when they wait too long before they start thinking that they need to apply for a business loan. When the time comes they’re not ready to apply for a business loan.

Getting Ready to Apply for a Business Loan

There are some things to consider before you’re ready to apply for a business loan. These things can drastically increase your chances of getting approved, or at least your chances of getting a desirable interest rate.

Check your Credit Score

Before you’re quite ready to apply for a business loan you want to have a good grip on what your credit score is. Your credit score can have a major impact on whether or not you get approved as well as how much money you end up paying for your loan. Before you apply for a business loan, you want to have this in order.

Analyze your Cash-Flow

Your cash-flow over the past several months will give the bank an idea of how able you are to pay back the loan, once you get it. Any issues you have had with cash-flow will look like a red flag to underwriters. There’s nothing you can do about the past, but if you catch this early enough you can make the necessary changes to improve your cash-flow before you apply for a business loan.


If you have any valuable assets on your personal balance sheet, it’s time to make a decision about which, if any of them, you’ll be comfortable using as collateral to get a small business loan. If the answer is “none” or you just don’t have any, that’s okay. There are plenty of unsecured funding solutions on the market today. But, if you were planning on putting something up like your house, for example, just be careful. It’s important to understand all of the implications and for you to know what you’re getting yourself into. What can happen to your house in the event, however unlikely, that you aren’t able to repay the loan?