Thinking about a small business loan— what's next

Inquiring about a loan means you're considering applying for a loan. It's a bit like checking out a hiking trail online (map, satellite view, reviews, planning your route, etc.) before you head out for the actual hike. We're honored to be a part of your journey!

Whether you're looking to access capital to start a new business or fund a growth opportunity for an established business, taking on debt is a serious business decision. Our goal is to ensure that you are prepared and confident about the process if you take your inquiry to the next step and apply.

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What, specifically, will a lender ask me

After submitting a loan inquiry, it's matched with a lender based on critical details like the requested amount and location. This ensures efficient follow-up tasks. While the initial form may not capture all the details, lenders prioritize three critical questions in introductory discussions.
The #1 question asked by lenders

Tell me about your business

Business owners often struggle to provide prepared, factual responses to common lender questions such as how they make money, what makes their business unique, target market, competitors, and marketing strategy. A lender seeks objective, researched information, often asking for supporting documents like income statements or profit & loss statements. Practice your answers with a Pathway coach before your meeting and consider having a comprehensive business plan, including financial statements, for reference.
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More than a guess-timation

How Will You Use The Money

During the inquiry process, you shared a dollar amount you are considering. A lender now wants to know why that amount. And—more importantly—how did you come to that amount? Do not make a mistake and read that sentence, "Generally speaking, why that guesstimated round amount..." Remember, a lender wants objective facts, not speculation or optimistic assumptions. So, know their very specific follow-up question:

  • Can you provide an itemized list totaling that amount?

    That's right! A lender wants to see a list—ideally, to the dollar—of exactly how you will spend the debt capital.

    There will likely be an adjacent discussion about collateral. One of the five "C's" of credit is collateral, pledged as security for repayment of the loan. Sometimes, loans are secured with small amounts of collateral, while others are secured with significant assets like property and investment accounts.

    • What collateral is available to secure the requested amount?
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    Start-Up versus Established

    What is your experience

    Funding a start-up can be challenging, particularly for those in the pre-revenue or early-stage phases. Lenders seek insight into the entrepreneur's experience and industry knowledge, emphasizing past successes and relevant skills. For established businesses showing revenue growth, experience remains vital, with lenders examining industry familiarity and business management acumen. Foundational business specifics, such as ownership structure, EIN status, banking arrangements, and accounting practices, are also crucial considerations for lenders.
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