Every small business eventually needs extra capital—whether it’s for growth, smoothing cash flow, or buying equipment. A business loan can be one of the fastest ways to access funds. Here’s a step-by-step guide to getting the financing you need in 2025.
6 Steps to Get a Business Loan
1. Understand What Lenders Look For
Lenders want to know you can repay your loan. They typically evaluate:
- Time in business: Banks usually want 2+ years; some online lenders may accept 1 year. Startups may rely on business credit cards, crowdfunding, or vendor credit.
- Personal credit score: Critical for young businesses without much revenue. A strong personal score opens more options.
- Business credit score: Positive payment history and few UCC filings help. Some online lenders may offer no-credit-check loans.
- Cash flow: Most lenders review 3+ months of business bank statements to ensure you can cover payments.
- Collateral: Secured loans require assets; unsecured loans are rare and often need personal guarantees.
- Industry: Some sectors are harder to finance. Check lender restrictions before applying.
2. Decide What Type of Loan Fits Your Needs
Options vary by purpose, loan size, and speed:
SBA Loans
- Low rates
- Government-backed
- Loan amounts up to $5M
- Difficult to qualify
- Slow process
Traditional Bank Loans
- Stable, trustworthy lenders
- Low interest rates
- Strict approval criteria
- Lots of documentation required
Microloans
- Easier for startups
- Flexible terms
- Smaller amounts ($500–$50K)
- Higher rates than traditional loans
Online Loans
- Fast approval
- Less dependent on credit score
- Higher interest rates
- Check lender reliability
Lines of Credit
- Flexible access to funds
- Reusable credit up to limit
- Can have higher interest rates
Business Cash Advances
- Fast funding
- Easier approval
- High fees
- Complex repayment
Cash Flow Loans
- Fast approval
- Soft credit check
Business Credit Cards
- Easy to qualify
- Fast approval
- Helps build credit
- Higher APR
- Limited to card-accepted expenses
Vendor Financing
- Fast approval
- May have no interest
- Improves cash flow
- Short repayment terms
- Depends on good vendor relationship
3. Check Your Approval Chances
Many lenders pre-screen applications online. Online lenders are more flexible for credit scores under 680, while banks may be stricter.
4. Gather Documents
Commonly required documents include:
- Personal and business credit reports
- Tax returns (personal & business)
- Bank statements
- Licenses/registrations
- Legal contracts
- Business plan & financial forecast
5. Choose a Lender
Lenders may be:
- Direct lenders: Banks, credit unions, online lenders
- Lending marketplaces: Compare multiple lenders at once
- Peer-to-peer (P2P): Crowdfunding or investors, often flexible with credit
6. Fill Out the Application
Applications can be online or in-person. Expect approval in 24 hours to several weeks, depending on the loan type. Respond quickly if additional documents are requested.
FAQs
Minimum income for a loan?
Typically $5K–$10K/month; crowdfunding exceptions exist.
First-time borrower?
Start with a strong business plan and collateral. Consider credit cards or crowdfunding if no revenue yet.
Required credit score?
Banks usually 680+, online lenders sometimes 500+ depending on revenue.
Easiest loans to get?
Online loans, business credit cards, or business cash advances.
Checking loan status?
Most lenders provide dashboards or customer support to track applications.
Preparation, knowing your options, and matching the right loan to your business needs are key to securing funding in 2025.