“What does it really take for a small business owner to get a loan from a bank today?” It’s one of the top questions our bankers hear.
Let me share the five things small business owners need to know when applying for a small business loan or line of credit.
1. Show that your business generates steady cash flow. Cash flow is a key indicator of a business’ health and its future prospects. When you can show reliable cash flow for your business, your bank can see that you have the resources to pay for new loans.
2. Make sure your current debt load is manageable. Your bank wants to make sure your business has the ability to take on additional debt and is in a strong financial position to manage its debt payments.
3. Maintain a good payment history. Before extending credit, a financial institution needs to be confident a business has the ability repay. Your payment history provides an important record of your ability to responsibly pay down debt. Obtaining a debit or credit card is a good way to begin building a payment history for your business.
4. Demonstrate business acumen. Successful businesses reinvent themselves all the time. Your bank wants to see that you anticipate potential challenges and have the management skills to overcome obstacles and pursue growth opportunities.
5. Build a solid relationship with your banker. A long-term relationship with your bank – for both business and personal financial needs – will show how you manage your finances as a creditworthy business owner.
For more information on how to qualify for a loan, visit Wells Fargo’s Business Insight Resource Center at