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Updated May 01, 2024

Need a Loan? Lending Trends That Affect Your Chances of Getting Funds

Monitor loan industry trends to optimize your funding approval chances with various loan products.

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Jennifer Dublino, Senior Writer & Expert on Business Operations
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If you need additional capital for your business and want to retain equity, you’ll likely investigate business loans or alternative funding options like a merchant cash advance or business credit card. However, financing trends may dictate your best option at any given time, making a specific funding source a better choice than another. 

Understanding business lending trends can inform you of the optimal time to take out a loan, the best loan type for your business and when you should turn to alternative lending sources. We’ll outline some current lending trends and how they might impact your chances of funding approval and overall costs. 

Tips for increasing your chances of getting the funds you need

Given the current trends, here’s how to improve your chances of getting approved for a business loan

1. Ensure your business and personal credit scores are at least 650.

Review your personal and business credit reports and dispute any items that are incorrect. For personal credit, you can file a dispute with any of the three major credit bureaus: Equifax, Transunion and Experian. For business credit, file a dispute with Experian Business Credit, D&B or Nav.

In addition, pay down revolving debt like credit card balances and generate as much revenue and cash as possible before applying for a loan to improve your debt-to-income ratio.

2. Have all your loan paperwork ready.

Lenders want basic information, such as how long you have been in business. However, they may also want to know how you plan to use the money you borrow. 

When applying, have your financial statements and tax returns for the last three to five years on hand. A projected income statement for the next year or two can also be helpful. If you have plans for a strategic partnership, expansion or acquisition, have any relevant documents available.

3. Increase income and decrease operating expenses.

To strengthen your company’s financial position, implement low-cost marketing initiatives, such as contests and co-marketing campaigns with complementary companies, to increase revenue. At the same time, ensure you trim waste and reduce operational costs. These measures will result in higher profitability.

4. Research loan options thoroughly.

There is ample information about business loans available online. Take the time to research your options to learn which loans you are most likely to qualify for based on your credit scores and other criteria. Apply only for loans for which you have a good chance of getting approval.

5. Be open to different types of loans and lenders.

It may be that the best loan for your business, given current trends, is from a company you’re unfamiliar with. When researching potential lenders, look at their years in business, customer ratings and financial stability. If those factors seem optimal, you should seriously consider applying with them. 

Under different financial circumstances, you may not have considered options like a variable-rate loan, merchant cash advance or business line of credit. However, these funding options may be more viable under some conditions than traditional term loans.

If you do all this and still can’t get a business loan, you may want to explore crowdfunding or partner with someone.

Did You Know?Did you know
Payment processors are relatively new to the small business lending market. They extend capital and provide flexible loan repayment terms, often based on future sales.

Best business loan providers

Finding the best business loan for your company will take careful research to ensure your needs are met. Consider the following options as you evaluate potential lenders: 

Biz2credit

Biz2credit is a marketplace lender, not an individual lender. You’ll go online and complete a single application, and its system will match you with multiple lenders based on your needs and qualifications. This format can streamline the loan research process and give you an excellent chance of getting approved for a business loan. Our Biz2credit review explains how the platform’s lenders offer various loan types, interest rates, terms and collateral requirements. 

Balboa Capital

Balboa Capital requires a credit score of only 620 or higher, at least one year in business, and monthly revenue of at least $25,000 – somewhat lower requirements than most lenders. The application process is quick and straightforward, and you can expect a decision in as little as one hour. Read our Balboa Capital review to determine if this lender is right for you.

Accion

Accion lends to business owners from underserved communities. Its interest rates are well below average, and it doesn’t require a minimum credit score. Accion is a nonprofit organization that is less focused on making a profit and more focused on helping borrowers succeed. Its loan amounts range from $5,000 to $100,000. Read our Accion review to learn more.

The next few years may be challenging for small businesses seeking funding. To obtain capital for growth, they will need to be particularly diligent, discerning and savvy. 

author image
Jennifer Dublino, Senior Writer & Expert on Business Operations
Jennifer Dublino is an experienced entrepreneur and astute marketing strategist. With over three decades of industry experience, she has been a guiding force for many businesses, offering invaluable expertise in market research, strategic planning, budget allocation, lead generation and beyond. Earlier in her career, Dublino established, nurtured and successfully sold her own marketing firm. Dublino, who has a bachelor's degree in business administration and an MBA in marketing and finance, also served as the chief operating officer of the Scent Marketing Institute, showcasing her ability to navigate diverse sectors within the marketing landscape. Over the years, Dublino has amassed a comprehensive understanding of business operations across a wide array of areas, ranging from credit card processing to compensation management. Her insights and expertise have earned her recognition, with her contributions quoted in reputable publications such as Reuters, Adweek, AdAge and others.
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