What Questions Are Asked on a Small Business Loan Application?

If you’re in need of a small business loan, it’s helpful to know what to expect when you apply. While lenders vary, you can generally expect the same types of questions on a business loan application.

How long have you been in business? 

When you apply for a small business loan, you can expect to provide basic information about your company. The questions may seem standard, but one is potentially more important than it appears: How long has your company been in business?

Many lenders require that small businesses prove a minimum number of years in operation to be considered for the best small business loans. This is because very new businesses may represent a bigger risk of loan default for small business lenders.

Questions regarding your company’s basic information may include, but are not limited to:

• What’s your EIN?
• What’s your business address?

What is your business plan? 

Small business lenders generally need to know the goods or services your business provides in order to approve or deny your small business loan application. Lenders want to make sure that your business plan is reasonable and likely to succeed.

Questions related to your business plan may include, but are not limited to:

• What does your business currently charge for its goods or services?
• How and when does your business collect money from your customers or clients?

What is your average monthly revenue? 

Another important aspect of a small business loan application is whether your company can reasonably afford to repay the loan. Small business lenders often require supporting financial documents to help them determine if your company generates enough revenue and has sufficient cash flow to repay the loan.

Questions related to your business’s finances may include, but are not limited to:

• How much money does your company have saved?
• Can you share financial documents to support your responses?

How much do you need to borrow? 

Although your actual loan amount may differ from the amount you request, it’s important to carefully consider your intention for the funds you intend to borrow. Before you apply for a small business loan, determine exactly how much money you need to borrow. The smaller your approved loan amount, the less you’ll need to repay.

Questions related to the usage of funding may include, but are not limited to:

• What will you do with the funds you intend to borrow?
• How do you intend to repay the loan?

How’s your credit? 

Small business lenders may inquire about your personal and business credit. Your personal credit history is particularly important if your business is new or has a limited business credit history.

Questions related to your credit may include, but are not limited to:

• What are the details of any current outstanding loan taken out by you or your business, if applicable?
• Do you authorize a personal and business credit check?

Actual business loan questions vary based on the lender, type of financing and location. Questions provided for illustrative purposes only.