You are captivated by your awesome business concept. All you need is the money to start your business. What to do after tapping into your personal funds? Your friends and family members could lend you some money to help you start your business, but chances are you’ll need financing from your bank or credit union.
It is not always easy to get credit. Lenders use strict criteria to determine if you qualify for a loan and they will not want to take any shortcuts in the process.
Here are some tips to help you prepare for your business loan application.
Prepare a business plan
- Lenders want to see a rigorous business plan. You’ll find information, templates, and answers to the most frequently asked questions about this topic on our Business Planning page.
Demonstrate that you have the means to create your business
- It is likely that you will need a small salary during the first months or years of your new business. Lenders must make sure that your personal financial situation is in good condition.
- Be prepared to present the potential lender with documents to support your income and personal investments.
Put yourself in the place of the lender
- Try to see the situation from the lender’s point of view. The more you understand what the bank or credit union is looking for, the better your chances of getting financing.
Here are some resources that will provide you with more information.
The Business Bank of Canada (BBC) has a digital book entitled How to Get a Business Loan for entrepreneurs who want to get a loan from their bank. The guide includes:
- information on what your loan application should contain;
- information on what bankers are looking for when considering a loan application;
- a glossary of the most common banking terms;
- tips to increase your chances of success.
Our Private Financing section provides information on the various types of private sector financing.
Before you go to a potential lender, make sure you’re ready and able to answer any questions about your business concept.