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5 Steps to Securing a Business Loan

Steps to securing a loan

Would you like to know where to get a business loan, how to service a business loan, how to calculate the exact amount of loan that your business needs and what lenders are looking out for so that you will be better positioned than your counterpart?

If yes, this is that very article you’ve longed forward to seeing on this blog. Knowing when to scale a business with a loan is very important if you truly want to be a successful entrepreneur.

According to an article published in WorldBank.org, the financing gap is so large that about half of formal SMEs don’t have access to formal credit. The problem of little or no access to credit has made it more difficult for micro and informal enterprises. But this can change if you understand how to get a commercial loan from the bank near you.

A variety of things you can use your commercial loan to get include but are not limited to factory equipment, furniture and fixtures, commercial vehicles and buying a franchise.

Steps to securing a loan

However, this is expected to change with the introduction of the Credit Reporting Act and the Secured Transactions in Movable Assets Act in 2017. These new acts will give Nigerian business owners better access to affordable credit. If you are thinking of getting a business loan, you can take advantage of this favorable change to secure a good financing deal. Here’s how.

Determine the Purpose of the Loan

There are many reasons why a business needs to apply for a loan, some of which are good and some bad. Good reasons include financing new equipment, long-term software development, real estate, and large seasonal sales variances. Examples of bad reasons include financing acquisition of non-essential assets, ongoing losses, and office build-outs. Just remember, if you’re looking at getting a loan, it’s vital that you’re only dealing with professional and trusted commercial loans in Florida (or in your location) companies. This will ensure the process from start to finish is legit and you won’t encounter issues throughout the process.

But here’s what experts advise that business owners should do: only seek financing if it is necessary for the success and growth of your business. Otherwise, make do with what you have.

Calculate the Required Loan Amount Accurately

If you do not ask for a large enough loan, you may run out of working capital sooner than expected. On the other hand, overestimating the amount you need can make a lender question your assumptions and credibility.

Make sure you have a properly calculated budget that is supported by reliable financial projections. You can use a business loan calculator to come up with a more accurate estimate.

Know What Lenders Look for

Lenders will look at your personal credit score to judge your reliability in paying back the loan. Other than that, they will also take a number of things into consideration, including your debt-to-income ratio, cash flow, and time in business. Having good scores in all these categories can significantly boost your chances of getting your loan application approved.

Find the Right Lender

There are many ways to get a business loan these days, with the most popular options being commercial banks, financial institutions, and local community banks or lenders.

Commercial banks usually offer the best loan rates, but they have stricter eligibility requirements. You can also try alternative financing options such as micro-lending, online lending, and crowdfunding. It is important that you spend some time doing research and comparison shopping to find out which lender is the best fit for your financing needs.

Prepare the Loan Application Package

The loan application package is the paperwork you submit to the lender when you apply for a business loan. Generally, it should include:

  • Business plan
  • Resume
  • Financial results and projections, such as balance sheet, cash flow, and profit and loss statements
  • Personal financial information, including tax returns

Also, if you have an online presence, try to make your website or social media accounts look more impressive before you apply for a business loan. Lenders will evaluate your online presence as part of their research.

Getting the right business loan requires substantial time and effort. However, it is a worthwhile endeavor because it can significantly reduce your financial obligation and business risk.

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Emenike Emmanuel is a multiple award-winning blogger, CEO of Entrepreneur Business Blog, Chief Evangelist of Ebusinessroom Ventures, and the Lead Coach of an online community of over 12,000 business owners called, The Excellent Entrepreneurs' Network. He’s here to help you start, manage and grow a profitable and sustainable business using digital marketing strategies. Follow him on Facebook, Twitter, Instagram, LinkedIn & Pinterest with this handle, @emenikeng. Telegram group - t.me/yourfirst1000 | Email: [email protected]


  1. Hello Emenike,

    Great tips over here 🙂

    This is high time and people want to do big, but if one is willing to do big, it requires money at the very beginning to
    invest in that project. Not every one have that golden wallet in their pants, thus they take loans, loans to accomplish
    their business and have a win win situation for them.

    But getting a loan sometimes can be a very hectic solution to come over by, there are lot of clause that one need to look upon
    before getting the loan.

    These are some key tips which one need to keep in mind before getting a business loan.

    Thanks for the share.


    • Hi Shantanu,

      That’s very true. It requires much more. But I know this will give a head-start everyone that thinks getting a loan is the only scaling tool their business needs right now.

      Thanks for your contribution.


  2. Hi Emenike, such amazing tips from an experience entrepreneur.

    This information is very rich and valuable.

    People always indulge in loan without full preparation. Because of this they apply the wrong steps which they end up becoming debtors.

    Apply this your tips will definitely make a borrower look professional.

    I do say you have reveal wonderful tips here. Thanks a lots for sharing

    • Hi Awogor,

      That’s very true. Most times what people need is not loan. Why take a loan when they are still very many options available one can make do with? I’m happy I learnt this now I’m new to it.

      Thanks for stopping over. I appreciate.


  3. amazing post. I just stumbled upon your post and wished to say that I’ve really enjoyed browsing your blog posts. After all I’ll be subscribing to your rss feed and I hope you write again soon!


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