If you require funding to start or grow your business, a business loan is one of the best options. Unfortunately, the process can be intimidating if you don’t know what you’re doing. However, when you break it down into manageable steps, it can help you secure the funding that your business needs.

7 Simple Steps to Business Loans

Decide on the type of loan you need

When you go to a lender, they are going to ask you why you need a business loan. Your answer will probably fall into one of three categories:

• SBA or traditional term 

• Startup financing 

• Business line of credit  

Find out if you qualify

Once you know what type of loan you need, it’s time to figure out if you qualify for a loan by asking yourself a few questions:

• What is your credit score? 

• How long have you been in business? 

• Do you make enough money?  

Calculate what payments you can afford

Next, you need to review your business financials and determine what payments you can afford. You don’t want to get in over your head. A good rule of thumb is to have your income be 1.25 times your total expenses, including the new loan payment.

Determine if you want to collateralize the loan and how

Putting up collateral is a risk, but it does make lenders more likely to lend you the money you need at a lower rate. Of course, if you put up collateral, this means that if you don’t pay the loan, the lender can come to seize the assets.

Compare Lenders

There are three main categories of small business loans:

• Online lenders 

• Traditional banks 

• Nonprofit microlenders  

Each one has its advantages and disadvantages and requirements. You have to decide which one fits your situation best.

Gather your documents

As you get closer to applying, you’ll want to make sure you have the documentation required. This includes:

• Tax returns (business & personal) 

• Bank statements (business & personal) 

• Financial statements (business & personal) 

• Business legal documents 

• A business plan  

Apply for a loan

Once you’ve done all the prep work, it’s time to apply for the business loan. Look at 2 to 3 options based on terms and APR. since APR includes all fees in addition to the interest, it is the best way to understand the total cost of the loan.

Choose the loan with the lowest APR and apply with the documents you gathered. Keep in mind that the credit bureaus do not differentiate between business/personal inquiries. Therefore, if you use your personal credit history, it could be impacted.


Many people believe the process of applying for business funding is complicated. But it’s not. Just follow these simple steps and you will have no problems. Let DAL Commercial Capital help you secure the funding your business needs today.