One of the most important things to determine before applying for a small business loan is how much you can afford to pay back on a monthly basis. Defaulting on a loan can cause irrevocable damage to a business and its credit history, which will impact its ability to get funding in the future. Don’t be too ambitious when making this calculation. Be realistic and err on the side of caution. Risk can be a good thing in business, but committing to a loan repayment schedule that’s too aggressive could ruin your company.
You should determine exactly how much your business needs to borrow to achieve its goals. This should be a precise figure, not a range. Lending companies want to see that you’ve done your research and that you will spend their money in a way that will help your business thrive. They want you to succeed so they’re sure to get paid back.
Our business loan calculator can help you see how altering certain variables can modify your monthly payment. Play around until you find the mix that’s right for you. Keep your desired loan amount with you throughout the application process so that you’ll know precisely what to ask for when engaging with funding partners.
Now that you know the types of small business loans that are available, which one you might need, and your desired loan payment, the next step is to determine if you’re creditworthy.