What will a bank look for to approve a business loan?
A lender or potential investor will want to see a written business plan which details the type of business that will be financed, and provides information on key topics like: the business’s management team, marketing strategy, market research & industry trends, and financial projections forecasting revenues and profits for the business. Secondly, a bank wants to see that the business owner has made an investment into the business themselves. Very few banks will finance 100% of the new venture; most want to see the owner invest some of their own savings or capital. Generally, a lender expects the owner to contribute 20% to 30% of start-up costs. Finally, a bank wants to see financial records of an existing business, usually 2-3 years of statements like tax returns, income statements and balance sheets. For a brand new business with limited financial history, a lender will review the personal credit of the business owner. Most banks want to see a personal credit score of 650 or higher. B
