Lenders are mainly concerned that you will repay the loan. To reduce the risk of you defaulting on the loan, they consider your personal and professional history.
Lenders will first look at your credit history and what that reveals about your money management skills. Before you even apply for a loan, you should ensure that your file is accurate and if necessary, correct any mistakes. Most lenders will be looking for a score of over 550. However, to be entitled to the best rates, you should have a score of 620-640 or over.
They will also look at the history of your business. Unless you’re aiming for a start-up small business loan, lenders are reluctant to lend to businesses that have been operating for under a year. This is because so many new businesses fail in their first year. If your business is new, it might be better to apply for a business credit card as a stopgap measure. A business of 2 years or older will be entitled to the best rates.
The lender will also consider the annual revenue of the business. This gives them an insight into how well your business is doing and the affordability of your borrowing.