More small businesses inquire about business loans

SCORE mentor Dean Swanson shares tips about getting financial help.

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I have the opportunity to visit with all current and potential small business CEOs from this area who need some mentoring. During the last few months, the majority of requests include “how do I get a business loan or find financing for my business?”

I will share some ideas from one of SCORE’s content partners, Progressive Commercial Insurance. With more than 50 years of experience, Progressive Commercial Insurance offers a full range of business insurance products. Progressive is a Fortune 100 company and trusted by thousands of small business owners to protect their livelihood.

Running a small business presents financial challenges in the best of times, but these problems are amplified during a pandemic. According to the 2021 Small Business Credit Survey by the Federal Reserve, 80 percent of companies experienced financial challenges during the past 12 months. This is a significant increase from 2019 when only 66 percent of firms experienced financial struggles.

While 62 percent of these business owners tapped into their personal funds to cover their costs, others sought out funding through loans and grants. Whether you want to rebuild your finances after the COVID-19 pandemic or simply want to launch your new idea, a business loan can give you the working capital you need.

If you want or need to apply for a business loan, Progressive suggests these steps to understand the application process.


Gather your financial information. Banks and other creditors will determine your loan terms based on your current finances. The better your credit and higher your income, the better your terms will be. When you shop around for different loan providers, they’ll all ask for the same information, so you can save time by gathering this information and keeping it on hand.

Here are some documents to keep close by during the loan application process:

  • Cash flow. Lenders want to know that you can pay them back. Pull copies of your bank statements and any documents that offer proof of income. If you currently own a business, you will likely need to share your most recent balance sheets and profit and loss statements (P&Ls) to show that your business is profitable.
  • Time in business. Most lenders will only lend to companies that have been open longer than a year. Gather documents for your licenses and state LLC registration to show how long you have been in business. You can also use your business tax returns for this.
  • Collateral. If you plan to borrow against your assets, you’ll need documents proving their value. For example, you may need to submit the sales documents of a fleet vehicle if you want to use it as collateral. If you can’t make the payments, the lender may be able to seize these assets.
  • Different lenders may ask for specific documents related to your business during the loan process. Use this list as a jumping-off point for starting the loan discussion.

Shop around for lenders. When you have your documents ready, you can start meeting with lenders about potential business loans. Your job is to evaluate the different financial institutions to see which one provides the best loan option for your needs. Here are a few places to look:

  • The Small Business Administration (SBA). This is the federal lending arm of the U.S. government. They offer emergency response loans, equipment loans, and microloans less than $50,000.
  • Your current bank. Some banks and credit unions offer better interest rates to existing customers. You may be able to save money by applying for a loan from them.
  • Competing banks. Even with a discounted interest rate, your bank might not offer the best deal. Evaluate loan terms from two or three other institutions to compare.
  • Online lenders. Consider national lenders that support small businesses. Your best loan rates may even be found online.

Keep the application process moving. Each lender has different requirements for loan approval and different speeds for the underwriting process. Once you choose the best lender for your needs, it’s time to start the application process — simply filling out the application doesn’t mean you’re almost there.

It often takes weeks, if not longer, to get an application completed and approved. For example, an SBA loan can take 60 to 90 days to get approved for funding. As with every step of the loan process, ask for clarity upfront about this timeline. This ensures you can keep track of the timeframe and plan appropriately for the use of your loan.

A simple way to speed up the application process is to be responsive to your lenders. When they ask for supplemental documents, provide them as quickly as you can. Even waiting a few days to respond can push back your timeline to receive the loan.

Dean Swanson is a volunteer Certified SCORE Mentor and former SCORE chapter chairman, district director and regional vice president for the North West Region.

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