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Signing Loan

The Ultimate Guide to Applying for a Business Loan

Learn more about what steps to take to apply for a business loan.

Does your business need an infusion of cash to help it grow? A business loan can provide you with the resources your business needs and offer an affordable payback plan.

Here’s all you need to know about applying for a business loan:

1. Check your credit

Before you apply, check your personal and business credit health.

Personal credit scores range from 300-850. A score that falls in a range of 580-669 is fair, 670-739 is good, 740-799 is very good and 800-850 is exceptional.

Business credit scores are measured differently. Experian uses Intelliscore Plus as its credit scoring model, with scores ranging from 1 to 100. Equifax assigns each business a payment index score, which ranges from 0 to 100; a credit risk score ranging from 100 to 992 and a business failure score ranging from 1,000 to 1,880. The D&B score, assigned by the Dun & Bradstreet Corporation ranges from 0 to 100. Finally, the FICO Small Business Scoring Service score ranges from 0 to 300.

If your personal and/or business credit scores are low, work on improving your credit before applying for a loan.

2. Update your business plan

Be sure to have a comprehensive business plan to show a prospective lender. The plan should include details about how the company intends to use the funds, the anticipated increase in revenue and plans for repaying the loan.

3. Consider arranging supplemental collateral

Lenders prefer to reduce the risk of a borrower defaulting on a loan by securing collateral for the loan. For business loans, this usually takes the form of the company’s accounts receivable, equipment or other assets.

When applying for a business loan, you can offer additional collateral to the lender, such as personal assets like real estate. This will make you more likely to qualify for the loan and may bring down the interest rate on your loan.

4. Organize your personal and business documents

You’ll need the following documents and identifying paperwork to apply for a business loan:

∙ Photo ID

∙ Accurate monthly financial statements from the past two years

∙ Business license

∙ Any commercial leases

∙ Business insurance plans

∙ Payroll records

∙ Incorporation documents

∙ Current financial obligations

∙ 3 months of bank statements

∙ Personal and business tax returns

∙ Collateral

5. Research potential lenders

It’s best to take some time researching potential lenders before applying for a loan. Learn about each lender’s eligibility criteria and the average interest rates on their loans.

Consider applying for a business loan through a credit union. A credit union will offer you personalized service and a competitive interest rate. Learn more about Listerhill's business lending opportunities here.

6. Submit your application

You’re ready to apply for a loan! With luck, you’ll soon have the funds you need to take your business to the next level.

Want to learn more about the products you need for managing and tracking business expenses? Click here.

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Frequently Asked Questions

  • What if I get an error message when I try to enroll an email address or U.S. mobile number?

    Your email address or U.S. mobile phone number may already be enrolled with Zelle® at another bank or credit union. Call our member support team at 256.383.9204 and ask them to move your email address or U.S. mobile phone number to your financial institution so you can use it for Zelle®.

    Once customer support moves your email address or U.S. mobile phone number, it will be connected to your bank account so you can start sending and receiving money with Zelle® through your Listerhill Credit Union banking app and online banking. Please call our member support team at 256.383.9204 for help.

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  • I'm unsure about using Zelle® to pay someone I don't know. What should I do?

    If you don't know the person, or aren't sure you will get what you paid for (for example, items bought from an online bidding or sales site), you should not use Zelle® for these types of transactions.

    These transactions are potentially high risk (just like sending cash to a person you don't know is high risk). Neither Listerhill Credit Union nor Zelle® offers a protection program for any authorized payments made with Zelle® – for example, if you do not receive the item you paid for or the item is not as described or as you expected.

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    Yes! They will receive a notification via email or text message.

  • How long does it take to receive money with Zelle®?

    Money sent with Zelle® is typically available to an enrolled recipient within minutes.3

    If you send money to someone who isn't enrolled with Zelle®, they will receive a notification prompting them to enroll. After enrollment, the money will be available directly in your recipient's account, typically within minutes.3

    If your payment is pending, we recommend confirming that the person you sent money to has enrolled with Zelle® and that you entered the correct email address or U.S. mobile phone number.

    If you're waiting to receive money, you should check to see if you've received a payment notification via email or text message. If you haven't received a payment notification, we recommend following up with the sender to confirm they entered the correct email address or U.S. mobile phone number.

    Still having trouble? Please contact our member support team at 256.383.9204.