And How You Can Prepare for Success

Access to funding can be a game-changer for small businesses and nonprofits. But for many underserved entrepreneurs, the process of applying for a loan often feels like navigating a maze, unclear requirements, inconsistent feedback, and frequent rejections. So, what exactly are lenders looking for?

Here are the five key things most lenders evaluate before approving your business loan application, and how you can position yourself for a “yes.”

1. Your Creditworthiness

Your personal and business credit scores are often the first things lenders will review. This helps them determine your past borrowing behavior and risk profile.

 Tip: Regularly check your credit report, dispute any errors, and focus on paying down existing debts.

2. Business Plan & Purpose of the Loan

Lenders want to know how the funds will be used and whether there’s a clear strategy for repayment. A solid, well-thought-out business plan can make a major difference.

Tip: Highlight how the loan will create growth, increase revenue, or stabilize operations.

3. Cash Flow & Financial Health

Can your business handle the monthly repayment? Lenders assess your income statements, cash flow, and profit margins to ensure your business is financially viable.

Tip: Organize your financial documents and be transparent about both strengths and risks. A clear understanding of your numbers builds trust.

4. Collateral or Assets

In many cases, lenders may ask for collateral—something of value that secures the loan.

Tip: Be prepared to identify business assets or explore alternative lenders who offer unsecured loans or flexible terms.

5. Business Experience and Industry Knowledge

Your track record, leadership skills, and industry knowledge play a role in convincing lenders that you know how to manage and grow your business.

 Tip: Even if you’re new, show your commitment, relevant experience, and support systems (like mentorship or technical assistance).

Ready to Strengthen Your Financial Readiness?

Join us for the Access to Capital: Virtual Workshop hosted by EDACT in partnership with Stearns Bank.

📅 Date: Thursday, July 31, 2025
 ⏰ Time: 11:00 AM – 1:00 PM CST
 📍 Location: Online (link provided upon registration)

In this workshop, you’ll learn:

• Clear steps to secure business funding
   
• Insights into how lenders evaluate applications
   
• Q&A with a Stearns Bank representative
   
• Tools and resources to support your next steps
   

Click here to register for FREE 

And take your next step toward financial readiness and business growth!