 TITLE: How to Get a Small Business Loan With Bad Credit CONTENT: What to Consider Before Applying for a Business Loan\n----------------------------------------------------\nTo improve your chances of being approved for a business loan, understand these key factors before you apply.\n### Factors that Impact Your Approval Odds\n*   **Type of lender**: Traditional lenders have strict requirements for loan approval. Most require completing a multi-page loan application and providing three years' worth of financial statements and a business plan They'll also look at both your personal and business credit scores, so you'll need a solid business credit history. Getting approved for a traditional bank loan can take months. In contrast, alternative or online lenders typically have much more lenient requirements. For example, they may ask to connect to your accounting software or check your business bank statements. If you meet their criteria, some alternative lenders will approve your loan within minutes.\n*   **Personal credit score**: As we mentioned earlier, 650 is the minimum personal credit score you'll need to be approved for a traditional business loan. However, even alternative lenders have minimum credit score requirements. In general, you'll need a score of at least 500 to qualify for a business loan from an alternative lender; if your score is 600 or more, you'll have more options.\n*   **Age of business**: Traditional lenders typically ask for three years' worth of tax returns and financial statements as part of your loan application. If you've been in business less than three years, you're likely to have trouble getting loan approval from these lenders. Alternative lenders have less stringent requirements for the age of your business; in fact, many cater to fledgling businesses.\n### Factors to Compare When Choosing a Loan\nIdeally, you'll end up with more than one loan option to choose from. To determine the best loan for your business, compare these factors:\n*   **Loan term**: Short-term loans are generally for 24 months or less. Mid-term loans are typically for two to five years.\n*   **Interest rate and APR:** Know both the interest rate and the annual percentage rate (APR), which encompasses the interest rate plus any loan fees or other loan costs. Also take into account the total interest you'll pay over the life of the loan.\n*   **Loan limits**: It's harder to get a second business loan when you already have an outstanding loan. Try to get one loan that provides the full amount you need so you won't have to apply to multiple financing sources.\n*   **Loan fees**: Make sure you understand all the fees involved in your loan. These may include origination fees, underwriting fees, closing costs, late fees and factor fees.\n### Factors That Lenders Consider\nWhat factors do lenders consider when reviewing a business loan application? Here's what they want to know:\n*   **Annual revenue**: Traditional lenders will examine past years' financial statements to see if your business has a steady income. Online lenders are more likely to approve businesses with lower revenues. Keep in mind that impressive annual revenues can help to offset a bad credit score and make it easier for your business to get a loan.\n*   **Cash flow**: Even businesses with strong revenues will struggle to get approved for a loan if they have poor cash flow. Lenders want to make sure you have adequate cash flow to pay back the loan and still cover your other business obligations.\n*   **Current debt load**: Lenders will assess the amount of debt you're currently carrying to be sure you can handle the additional debt.\n*   **Business plan**: Traditional lenders will review your business plan, looking for a sound business model, a strong management team and realistic financial and sales projections. Alternative lenders typically don't ask for a business plan.\n*   **Loan purpose**: Traditional lenders want to know exactly what you'll use the loan proceeds for and the financial impact the loan will have on your business, such as increasing sales or boosting production. END