18 Business Loan Requirements - Time in Business
When it comes to getting a business loan approved, you might be asking, "Why does it matter how long I have been in business?" It goes to the question of track record: a business with a long history has demonstrated staying power. The owners have shown that they can manage their business to date and keep it running.
Whereas, for those who have just started or have only been in business for less than a year, for example, you have not yet established any sort of history or pattern when it comes to your ability to run your company and make a go of it.
With more traditional lending term loans, the institution with whom you are working generally likes to see a company's time in business be for a minimum of two years. However, banks may be willing to look at newer companies with SBA-backed loans as long as everything else falls in line with their requirements. The reason is that the lender now has a guarantee from the government, making your company something of a safer bet.
If you do not qualify for financing via a traditional lender because you lack an established business history, that doesn’t mean you are totally out of the game. Online alternative lenders have less stringent requirements and sometimes even offer loans to applicants who have only been in business for a year, possibly even less.
What can greatly help you out if you are a newer company is to compose a solid business plan. This plan shows any lender that you’ve done your research, you understand the business landscape, and you’ve earnestly analyzed your company’s place within the industry.
At First Union, we do look at time in business, but we also consider the entire picture. All parts of your application are weighed as we decide whether or not to offer you a business loan. So don’t give up on the idea just because you are a relatively new endeavor. Contact us today and let’s talk!