top of page
Search
  • carrkimberlyhot

Useful Tips On Applying for Business Loans

Updated: Jan 6, 2020



Business loans is the transferring of funds either from a financial institution or an individual to the borrower. So in this case, financial institutions are the lenders and businesses are the borrowers. The schedule of paying back the loan and the interest to be levied against it, is decided by the financial institution where the borrower has to agree to the set terms.


Financial institutions can give secured or unsecured loans. Secured loans must be accompanied by collateral. These collateral include either the home of the borrower or their personal assets. But if we move over to business loans, collateral is an asset that is business owned such as real estate or machinery.

There are several reasons why businesses apply for loans. Some need more funds to expand their business or offer better services, others request for funds to undertake big or small purchases. Lenders look into several factors before considering a borrower for either of these loans. Follow this link for more info about applying business loans: https://www.wbl.com/business-owners.

They begin by checking the businesses credit worthiness. They evaluate the success of the business and its likelihood to become profitable. Acquiring a business loan for a new company is not easy, however the business owner’s credit history is the sole determinant of whether to get or not to get the loan.

Every financial institution before granting any loan must be sure the borrower will be able to pay it back. To do this they are required to go through some strict pre-requisites to get the loan. In case the risks of getting the loan are high, it is advisable to look for funding from either your social circle or family who will either become shareholders or lend you money that will have to be repaid.

No financial institution is interested in giving high risk loans. As a result, small businesses are better off applying for government funding or micro-finances because their pre-requisites of granting a loan are not as stringent as banks. But if your business gets a loan on its commencement, it a good chance of building its credit history along with the growth of the business. Learn more information about applying business loans.


Business or personal loans should be paid back within the set time. If this is not done, it affects a person’s or business’ credit history and in the future accessing business loans will be challenging.

All financial institutions do not only consider a business’ credit rating, instead it also considers the profits made in the past, as well as the profits that a business will be able to make after the loan has been granted.

For more information, click here: https://en.wikipedia.org/wiki/Loan.

3 views0 comments
bottom of page