How to Apply for a Small Business Loan

You may be considering a loan if you’re ready to expand your business, but you lack the capital to do so. As your small business grows, you may need to purchase inventory, equipment, supplies, or commercial real estate to keep pace with demand.

Applying for a small business loan can be overwhelming. From the multitude of loan programs available to the stack of paperwork you’ll need to collect, you may need help figuring out where to start.

How do you apply for a small business loan?

Read these tips on getting a business loan, so you can put your best foot forward and feel comfortable talking to a lender.

The First Step: Preparing Your Materials

Before you seek a lender, you’ll need to have a firm understanding of your business, its financials, and your reason for requesting the loan. Analyzing your finances and setting feasible goals will help you answer two important questions: how much do you need to borrow? and how much can you afford to borrow?

Resources like Missouri State University’s extension of the Missouri Small Business Development Center (MO SBDC) are available to assist small businesses with financial analyses, projections, and loan applications. The MO SBDC recommends collecting the following information before talking to a lender.

  • Financial statements. Lenders will request your most current financial statements. Preferably, these statements should be from the past 90 days or the current quarter. You’ll need to have a profit and loss statement, balance sheet, and cash flow statement.
  • Business plan. Developing or revising your business plan will help lenders see your potential for success. For a startup business loan, you’ll need a business plan with information about your products or services, industry, and target market. It may not be necessary for existing businesses to present a comprehensive business plan.
  • Financial projections. The most important documents you’ll prepare are financial projections based on expected expenses, revenue, and the lending amount. You’ll want to prepare projections for three years with the first year’s projections broken down by month.
  • Tax returns. A lender will want to see both your business and personal tax returns. While your business tax returns provide insight into your business history, your personal tax returns will speak to your character and credibility as an individual.
  • Credit score. You don’t want a lender to surprise you with information about your financial history—including your credit score! You’re more likely to get approved for a loan with a credit score of 650-700 or above.
  • Narrative. Once you know the numbers you need, it’s time to explain why you need a loan. What will you use the money for? You need working capital to expand. You’re opening a second location. Whatever the case, your narrative should describe your reason for borrowing.

The Search: Finding a Lender

Banks, credit unions, and other trusted lending institutions can help you figure out what type of loan you need. You should start with the lender you know. This lender will already have an idea of your character and credibility, as well as your financial history.

An existing relationship with a lender may help facilitate the discussion, but you shouldn’t limit yourself to just the lenders you know. Don’t be afraid to talk to multiple lenders to find the best rates and loan packages.

A man reviews a small business loan agreement.
Lawyer wearing linen suit sitting at his desk by the window holding pen and reviewing contract in his office

Loan Types: Your Lender is Your Guide

The type of loan you should apply for depends on your current business situation and what you want to finance. Your lender will help you find a loan program that fits.

  • Conventional loans. These business loans let you borrow a fixed amount and pay it back over a set period. With a traditional loan, you’ll have a fixed interest rate and most likely have a repayment term of one to five years.
  • Guaranteed loans. Banks and other lenders take a risk every time they offer someone a loan. Guaranteed loan programs ensure that lenders won’t be at a loss if the business defaults on the loan. While a lender provides the loan, another agency promises to pay back a percentage of the loan if necessary.

Small Business Administration Loans

The Small Business Administration (SBA) offers guaranteed loan programs aimed to incentivize lenders. While both conventional and SBA loans give the borrower a way to grow their business, SBA loans may offer higher loan amounts, lower interest rates, and extended repayment periods.

How Long Does It Take to Get a Loan?

There isn’t a set timeline for getting a business loan. The time it takes you to go through the loan process depends on the program, the loan size, and your ability to provide the lender with information quickly.

If you’re applying for a more complicated loan program, like an SBA loan, it may take a few months to complete. On the other hand, a well-versed lender and plenty of preparation could have you approved within a week.


Are you looking for help with small business loans? The Missouri Small Business Development Center (MO SBDC) at Missouri State University is part of a nationwide network of business development centers funded in part by the SBA.

Last year, MO SBDC helped clients obtain more than $24.7 million in loans and investments. From preparing financial projections to helping you fill out loan paperwork, assistance from MO SBDC can help you complete the loan process.

Once you receive a loan, Commercial One Brokers can help you find commercial real estate in Branson, MO. Whether you need a retail, warehouse, or office space, or are interested in buying a motel, we’ll help you find real estate that fits your budget.

Contact us to learn more about Branson real estate or view our listings to see what’s on the market now.

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