Regardless of what stage of growth your business is in, there might be a time when you'll be needing some extra cash.

For some businesses, extra cash would be in the form of borrowed capital, which will then be used to fund initiatives and fuel growth.

The right business loan can provide you the funds to expand operations, cover day-to-day expenses and even purchase equipment/inventory. This is what makes business loans incredibly helpful, especially for smaller businesses that don’t have much alternative sources of capital.

If you’ve never applied for a business loan before, you might be unsure about how to begin or which documents are needed.

Here’s a simple guide that will teach you how to get a business loan, as well as what are the business loan requirements you might be asked to provide.

How to Get a Business Loan in 5 Easy Steps

1. Determine Why You Need Financing – First, identify why you need financing. Some common reasons are to buy new equipment, establish the business, pay for day-to-day operations and more. It’s important to take into consideration what lenders look for such as cash flow, personal credit score, collateral and even the industry you're in.

2. Calculate Your DSCR and How Much Debt You Need – Next, figure out how much debt you can afford. For this step, you can use a business loan calculator to get a better sense of how your business will be affected by your debt, which you can compare in your profit and loss statement. It’s a good idea to calculate your debt service coverage ratio (DSCR) as well, which you can do by taking your average monthly net income and dividing it with your monthly loan payment. This determines whether or not you can afford to pay back a loan.

Screen Shot 2022-05-31 at 6 A business loan is very important for smaller businesses with not much capital. Photo: Alexander Mils/Unsplash (CC0)

3. Check Eligibility and Compare Options – Know what kind of financing is realistic for your. This is usually determined by your time in business, annual revenue and personal credit score. These three factors will determine what’s feasible for you.

4. Gather Necessary Documents – Once you’ve explored your options and determined the financing that you’ll get, it’s time to start gathering the required documents. These requirements usually vary by lender, but some of the common requirements include:

  • Basic business information
  • Basic personal information
  • Business legal documents
  • Personal and business credit score
  • Business bank statement
  • Business financial statement

5. Submit Your Application – The final step is applying for the loan. After submitting, your loan enters underwriting. The lender will review your documents and verify the information. Once you pass underwriting, you will get the loan agreement. Fees will also apply.

Nav - Business Loans Made Easy

Screen Shot 2022-05-31 at 5 Nav is a Utah-based financing company that helps with business financing. Photo: nav.com

Now that we’ve covered all the steps in getting a business loan, here's a company dedicated to make all these steps much easier: Nav.

Based in Utah, Nav is a financing company that’s focused on helping businesses and business owners manage their credit and get easy access to financing from four major credit bureaus at no additional cost to them. The company does all of these through their mobile app, which provides personal and business credit reports, alongside monitoring and other tools dedicated to help build your business credit. This makes it uniquely positioned to help businesses build trust with lenders, especially in terms of credit approvals.

Nav also offers free access to credit reports from some of the major credit bureaus, including Equifax, TransUnion, Experian and Dun & Bradstreet.

Nav Features and Offerings

Screen Shot 2022-05-31 at 5 A sample term for a small business loan from Nav. Photo: nav.com

Here are some of Nav's best features that your business can benefit from:

Personal and business credit information – This is incredibly important especially when it’s time to approach lenders for business financing. Nav provides this information at very low costs, helping you stay up-to-date on your credit reports and scores.

Multiple credit bureaus – Depending on the account you have, Nav will also provide access to full business credit reports from Experian, Equifax and Dun & Bradstreet, while TransUnion and Experian will take care of personal credit reports.

Credit education – Nav regularly works with the U.S. Small Business Administration and local small business development centers to host seminars, webinars, presentations and so much more to help you become a better businessowner.

Identity protection – Nav also offers identity theft insurance with a maximum coverage of up to $1,000,000. On top of that, there’s also monitoring, identity restoration and experts that are available to solve any issues that may arise.

Besides these, you can also get cash flow tracking, alerts, insights, lost wallet replacement, tradeline reporting and even a FICO Small Business Scoring Service (SBSS) score, depending on the account you have.

Pricing and Customer Service

Screen Shot 2022-05-31 at 5 Nav is focused on making financing easier for small businesses that are aiming for growth. Photo: nav.com

Nav also offers monthly and quarterly billings, with the latter giving you up to 20% savings. The plans are currently priced at:

  • Free Standard Account
  • Business Manager - $29.99 per month ($89.99 per quarter)
  • Business Boost - $39.99 per month ($119.97 per quarter)
  • Business Loan Builder - $49.99 ($149.97 per quarter)

As for customer service, you can expect a dedicated support page, as well as a customer service team that you can call. The team will also reach out to you should any payment fails, to ensure consistent reporting of your tradeline.

Conclusion

All in all, Nav is a fantastic option for business owners who want to grow their business and find more success.

With its available tools and options, Nav is a great option if you want to raise capital or refinance your loans to more favorable rates and terms, while maintaining good credit relationships and grow your business.

Click here to learn more about Nav.