How to Get a Small Business Loan (Uncut) 02-19-2025

How to Get a Small Business Loan (Step-by-Step Guide)

In today’s video I’m going to teach you how to get a small business loan so in today’s video we’re going to cover the different types of business loans where you go to get a small business loan what you need to qualify how much that you qualify for and how to increase your chances of approval so let’s start with this very important question which small business loan or financing is the best for you to answer that you must be aware of the most popular forms of small business financing so there’s the Term

Loan SBA loan a business line of credit equipment financing Revenue based financing micro loans so these are these are the most popular ones of course there are others as well but each of these have their pros and cons and some may be better for certain situations or Industries but listen regardless of the type of loan always check the terms for fees guarantees collateral and early repayments among other things now before we proceed I want to be fully trans parent with you my company clear value

lending offers all of these forms of financing so Term Loan SBA loan business line credit equipment financing Revenue based financing microloans so I’m going to leave a link for you down below anyways I’m telling you this because I want you to know that I’m not going to play favorites and try persuading you whether one is better than the other I believe that you should get what best suits you and each of these you has their pros and cons okay so let’s get started with a small business Term Loan

so with a Term Loan you receive a lump sum of cash and you repay the loan with a fixed monthly payment for a certain period of time and the interest rate is fixed so the pros of a business Term Loan are that they’re typically lower interest rates and term loans will have higher borrowing amounts compared to other types of small business loans now the cons of a business Term Loan are that they’re going to be more difficult to qualify for so we’re talking about being based off your personal credit

score the a of your business and history of revenues now let me tell you about SBA Loans so a small business administration loan or SBA loan is a small business loan that’s partly guaranteed by the SBA which is a government agency so I want to be very clear about this the SBA does not give the loan the SBA just guarantees a part of the loan to the lender and I want to point out that an SBA loan can have a fixed or variable interest rate it depends on the type of SBA loan so the PR of an SBA loan are that they’re going

to be among the lowest of interest rates and longer repayment terms so SBA Loans are considered long-term business financing which means that the repayment period is typically longer now the cons of an SBA loan are that it’s the application process it’s a long one I mean it could be as short as 10 days to get funding or it could be as long as 90 days and SBA Loans are going to be more difficult to qualify for so for example higher credit score requirements you know most lenders they want to see a

minimum personal credit score of around 620 but they’re typically I mean that’s a bare Minal they’re typically looking for 690 or up and you also must show a strong business history I mean we’re talking about cash flows now let me tell you about a business line of credit so a business line of credit works like a credit card you borrow when you need to so you only pay interest on the money that you’ve borrowed so let’s just say that you get a $50,000 line of credits that means you can borrow up to $50,000

whenever you please so you can think of that $50,000 in this example like your credit card’s borrowing limits so in this example if you draw $220,000 from your line of credits then you’ll start getting charge interest on the $20,000 that you borrow and you’ll have to make payments based on only the amount that you borrow again like a credit card and if you pay that money back then you stop getting charged interest again like a credit card so the pros of a business line of credits are that they give you

flexibility and they also give you revolving access to funds now the cons are I mean you have to watch out for the fees we’re talking about maintenance fees annual fees draw fees Etc please watch out for those now another con is that you may have a variable interest rate which means that your interest rate may change so there’s some uncertainty there and another con of a business line of credit is that there are stricter requirements now let’s move on to equipment financing so equipment financing is used to acquire business

equipment which can be pretty broad so this includes office furniture Machinery commercial kitchen equipments medical equipments industrial equipments Etc so in equipment financing the interest rate is typically fixed and the equipment becomes collateral so a pro tip is that it’s easier to get financing for equipment that retains value it’s much more difficult to get financing approved for equipment that does not hold resale value so the pros of equipment financing are that it allows you to keep cash on

hand and it allows you to own the equipment instead of renting it so the cons are that this type of financing it’s of course limited to equipment and it may require down payments but not in all cases now let’s cover Revenue based financing so Revenue based financing is alternative financing that’s difference from a traditional loan so this type of financing has no interest rate instead there’s a factor rates so here’s how it works let’s just say that you request $100,000 but the deal is that you will

have a factor rates of 1.15 so in this case you would need to pay back $115,000 so with Revenue based financing you can determine the frequency of your payments you can choose to make your payments monthly weekly or even daily however most people choose weekly payments and typically there are discounts for early repayments the pros of Revenue based financing are that it’s easier to get approval compared to a traditional loan and fast funding compared to a traditional loan the cons are that it can be a higher cost of

financing now let’s cover microloans micro loans are business loans that offer financing for smaller amounts and we’re generally talking about from $500 to $50,000 so these types of loans they’re generally a good fit for businesses that need smaller amounts of financing so some microloans may have variable interest rates but most microloans will have fixed interest rates with fixed payments now I want you to be aware that microloans you know as you can imagine they’re not big money makers for large

Banks because they’re dealing in smaller amounts right so it may be more difficult for you to get a microloan so the pros of a microloan are that they can get you smaller financing amounts that large lenders are not willing to offer you and they can help build your credits and the cons are that micro loans typically have higher interest rates compared to other loans because they’re considered higher risk and there are fewer lenders you know that offer micr loans compared to other loans now let’s talk about where you go to get a

small business loan well the first thing I want to tell you is please check out my company clear value lending which helps small businesses like yours get financing so I want to tell you this I’m very excited to tell you this that we built our company to revolve around technology and AI to cut down on overhead costs dramatically and with the money that we save we can pass that savings on to you so honestly we are taking the industry by storm and we keep the process simple and transparent please come check out our site and see

how much that you qualify for so I’ll leave a link for you down below but besides clear value lending here’s some alternatives for you so you can get a small business loan from banks credit unions online lenders or from the SBA so getting a loan from banks credit unions or an online lender I mean that’s pretty straightforward so I’m not going to expand upon that but I want to clarify with the SBA so this is straight from the SBA websites the SBA partners with lenders so it’s not the SBA that’s giving you the loan again the SBA is

simply guaranteeing a part of your loan to the lender so if you visit the sba’s website which is at sba.gov then you’ll see here that you can find lenders on the sba’s websites so once you click that that will take you here to where you can get connected to a lender now let’s answer this question what do you need to qualify for a small business loan the answer is that it depends on what type of small business loan that you’re looking for but here’s a general guideline of what lenders will have as a

requirements so regarding your credit score all loan types will take into consideration your credit score at a bare minimum I mean you need to be in the 600 plus range so regarding collateral so most SBA Loans require collateral so there are some exceptions of course for equipment financing the equipments will become the collateral so you don’t need collateral for term loans a business line of credit or micro loans however if you offer collateral then you can get a lower interest rate so no collateral is needed

for Revenue based financing now regarding the minimum age of your business generally there is a requirement of course yes there are some exceptions but generally they want to see at least 12 months now in terms of Revenue requirements generally yes there are Revenue requirements of course there can be exceptions but lenders will request your previous few months of banking activity so listen not only will these factors be used to approve or deny you but these factors will also determine your interest rates however if

you’re lacking in one area A lender may still approve you if you fulfill or exceed in another area now this is a very important question how much do you qualify for so you know what and you’re probably not going to be surprised I’m going to be very honest with you this depends on so many variables your cash flow potentially collateral your credit score industry time and business type of loan requested Etc so to make your life easier I would encourage you to just come to our website we built the calculator for this

and you can you can get a free estimate of how much you qualify for so I’m going to leave a link for for you down below now how do you increase your chances of approval or your funding amounts now I want you to know this about small business loan approvals the stats on whether your small business loan requests will be approved or not vary greatly it depends on the source but regardless of what source that you’re pulling from they all show the same thing that large banks are less likely to approve you compared to a smaller

bank or a credit union and that small Banks and Credit Unions they’re less likely to approve you compared to an online lender so many people like to start at a large bank because they may already have a relationship at that bank but if you get rejected by a large Bank try a smaller bank or a credit union and if you get rejected by a smaller bank or a credit union then try an online lender so ultimately to increase your chances of approval try smaller banks credit unions or online lenders and just so you

know online lenders they’re growing in popularity so if you look back at 2019 19% of all small business loans came from non-bank lenders in 2025 that’s increased to 25% of all small business loans and of course go with the option that offers a competitive interest rate good terms and the type of financing that best suits you and to improve your chances of getting a small business loan you essentially need to reduce the risk of the lender so essentially you got denied because you’re classified as a

higher risk because either your credit score is too low you don’t have enough cash flow or you don’t have a sufficient history to their liking so you can improve your odds by improving your credit score which I’ve dedicated a separate video to so one of the quickest ways to boost your credit score is to fix any credit report errors so personally I did this and my credit score jumped by 100 points practically overnight also by applying for the right amount so you want to request the loan amount that is aligned with your revenue

and also maintain maining good banking practices which we’re going to cover in a separate video so for example the industry standard is five negative ending days so five Neds will get you denied or severely hurt your chances also paying down your pre-existing debts which lowers your debt to income ratio offering collateral is always an option and improving your financials by increasing your revenues or profitability so listen I just want to tell you that I’m a small business owner too and two times in my past I

taking out small business financing so I just want to let you know that I am sincerely rooting for you and I wish you the very you and your business the very best thank you so much please subscribe and wish you a very nice day take care