Dos and Don’ts for Small Business Loans


Small business loans and cash advances can be of great help to merchants in need of business financing. What are the dos and don’ts for getting a small business loan to finance your small business costs? There is a lot to learn when it comes to banking for small business companies, and the loans involved. Just read below and you’ll know.

Dos for Getting a Small Business Loan

Below you can find several expert tips that can help you do what’s right when applying for a small business loan:

  • Open a separate account and books for your business to make it easy for the lender to look at your finances.
  • Know your credit score so that you can work on improving them if needed.
  • Compare rates and other financing options. Consider a reliable alternative online lender. They keep on gaining traction with merchants and can offer exceptional funding for your business such as cash advances.

With a reputable alternative online lender, you can enjoy the lowest rates in the industry. Beyond that, search for a respectable business funding provider that can provide the best financing solutions for your own business needs.

  • Know what’s necessary for the loan you’re applying for and have all the documents prepared.
  • Be sure you won’t fail to repay the loan.
  • Know your pain points so to correct your mistakes and avoid being rejected.
  • Why apply for a loan completely on your own? Try the resources available to you.
  • Know what collateral you have available. What assets can you provide as collateral? What’s their market value? What portions can you use as collateral in the future.?
  • Read and understand each point of the contract so to avoid incurring extra fees or charges.

Don’tsfor Getting a Small Business Loan

Here’s another group of expert tips that can help you avoid taking the wrong steps that can destroy your creditworthiness:

  • Don’t have any specific issues that make you a less attractive candidate.
  • Don’t “get accustomed” tolate payments. They both negatively affect your credit and keep other lenders away from you. Also, they can lead to tax and property liens.
  • Don’t be a business that lacks the documentation to show its years in business.
  • Don’t stick with only one type of lenders. Look at different types of lending available.
  • Don’t avoid telling the lender how much money you want and how you’re going to useit.
  • Don’t stay ignorant towards your business credit report. Check all the items on it like your industry code and the risks associated with your business.
  • Don’t fail to look into the history and reputation of the lender you’re going to work with.
  • Don’t ask the lender the amount your company will qualify for.
  • Don’t meet with your lender without having all your financial documents available.
  • Don’t overestimate your financial worth and income.

Finding access to working capital is an essential part of running a small business. The dos and don’ts listed above can help you connect the dots and figure out the best business funding solution for your business.

Author Bio: As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has made him a finance (or cash advances) expert at First American Merchant.