How to Get a Small Business Loan in the USA

If you run a small business (or plan to start one) in the United States and are exploring how to get financing, this post is for you. Loans can be a key tool for growth — whether it’s to buy equipment, hire staff, expand to a new location or cover operating costs. But getting a small business loan isn’t always simple. You’ll need to understand what lenders look for, how to prepare, and what your options are.

This guide walks you through:

What types of loans are available
What lenders expect
Step-by-step how to apply
A handy comparison table
Tips & pitfalls

Let’s dive in.

Table of Contents

Types of Small Business Loans & Financing Options

Here are some of the common types of financing available in the U.S.:

Traditional bank term loans – Lump sum of money, fixed or variable repayment schedule.
Lines of credit – More flexible: you borrow up to a limit and pay interest only on what you use.
Government‐backed loans (via the U.S. Small Business Administration (SBA)) – These have special features and guarantees.
Online lenders / alternative lenders / microlenders – Often faster, less paperwork, but may come with higher interest rates.
Equipment loans, real-estate loans for business, invoice/cash-flow financing – Specialized uses.

What Lenders Will Look For

Before you apply, best to understand what the lender is assessing. According to sources:

A business plan with financial projections helps demonstrate repayment ability.
Good personal credit and (if applicable) business credit.
How long you’ve been in business (many lenders prefer at least 2 years).
Your annual revenue and profitability. For example, one bank required ~$100,000 in annual revenue for certain unsecured loans.
Collateral or personal guarantee may be required (especially if new business or riskier loan).
Whether your business qualifies under SBA size‐requirements if you go that route.

Step-by-Step: How to Apply for a Loan

Here’s a generic step-by‐step process you can follow:

Step	Action
1. Define your funding need	Figure out exactly how much you need and for what purpose (e.g., equipment purchase, expansion, working capital).
2. Evaluate your business readiness	Check your credit (personal and business), assess how long you’ve been in business, gather past financials.
3. Choose the right loan type & lender	Compare options (banks, online, SBA). Match your business profile to what lenders require.
4. Prepare documentation	Common documents: business plan, financial statements (past 2 – 3 yrs if available), tax returns, bank statements, legal documents (articles of incorporation, licenses).
5. Submit application	Fill out the lender’s application form, submit documents, meet with relationship manager if needed.
6. Review offers & select best terms	You might get multiple offers—compare interest rate, term, repayment schedule, fees.
7. Use funds wisely & repay on time	Once approved and funds disbursed, use them for the intended purpose and ensure timely repayments, which helps build your credit for the future.

Comparison Table: Key Loan Program Features

Here is a simplified table comparing some typical loan options and what you should consider:

Feature	Traditional Bank Loan	SBA-Backed Loan	Online / Alternative Lender
Typical term in business	Often 2 + years in business required	Varies (SBA programs have eligibility criteria)	Sometimes 6+ months minimum
Credit / revenue requirements	Higher standards (good credit, solid revenue)	Good credit, must satisfy SBA size & other criteria	More lenient but higher cost
Interest rate / cost	Potentially lower if you qualify	Competitive rates & guarantees may help	Higher risk = higher rates
Documentation & process time	Paperwork and underwriting can be lengthy	Often longer due to federal guarantees	Faster turnaround in many cases
Use of funds	Broad uses	SBA loans can be used for many purposes but check program rules	Broad but terms vary

Additional Tips & Common Pitfalls

Tip: Start improving your personal and business credit early. Even if you don’t need the loan now, good preparation positions you better.
Tip: Draft a clear business plan. It shows the lender you’ve thought through how the money will be used, how you’ll generate revenue and how you’ll repay.
Tip: Don’t just apply randomly—match your business’s profile to lenders that favour your type of business.
Pitfall: Taking a loan without a clear repayment plan or misusing funds may damage your credit and viability.
Pitfall: Some online lenders may look easier but may impose higher interest rates or unfavourable fees—compare carefully.
Tip: If your business is very new (< 2 years) or has limited revenue/history, consider smaller micro-loans or alternative financing and build your track record.
Tip: Keep all your documents organised and current—tax returns, bank statements, legal documents. This speeds up approval.
Pitfall: Don’t assume you’ll get the top loan terms if you only meet minimums; your credit, revenue stability and business history impact the offer.

Summary

Getting a small business loan in the U.S. is absolutely feasible — but it takes preparation, clarity and the right match between your business and the lender. Focus on: