As a small business owner, you’re no stranger to surmounting challenges and overcoming obstacles. But when it comes to getting the funding you need to strengthen or grow your business, the process can seem discouraging and difficult. Between determining what kind of funding you need, collecting the required documentation, and submitting your application—nevermind actually getting approved—it’s hard to know where to get started.

Here’s some good news: there may be some minor variations depending on the type of funding and type of lender you are working with, but most applicants will follow the same process regardless of what type of business you operate or what kind of funding you’re looking for.

Here’s the process you can expect to follow when applying for small business funding:

1. Start by identifying why you need funding
Knowing what you intend to use your loan for will help you and your lender determine what kind of funding will work best for your business. For example, if you need startup funding, your lending options will differ greatly from those of an established business looking to grow.

Some applications may also require you to provide a purpose statement. In addition to streamlining the application process, formalizing your intentions before you submit your initial application will show lenders that you are prepared, which may even improve your chances of approval.

2. Determine how much funding you need and how much funding you can afford
Most lenders have minimum and maximum funding amounts. Knowing how much funding you need before you start compiling your application(s) will help you narrow down your loan and lender options so you can avoid spending time and effort on funding you aren’t eligible for.

It’s also important that you take the time to determine how much funding you can actually afford. Taking out a loan for more than you can handle is never a good idea—you’ll end up paying more in interest and other fees for money that you didn’t need or use. On the other hand, applying for a loan for an amount that corresponds to how much you actually need shows lenders that you understand your finances and are taking a realistic approach to debt and money management, which may increase your chances of approval.

3. Review your credit reports
Most lenders will request your credit score before they review or approve your small business funding application. Traditional lenders and SBA-backed loans have stricter credit score requirements, while alternative lenders place less emphasis on your credit score, with a greater focus on cash flow and the overall health of your business.

FICO is the preferred credit monitoring institution for business loans. FICO charges a fee to run your credit report, but there are credit monitoring institutions that will provide reports for free, including TransUnion, Equifax, and Experian.

GREENBOX TIP: Before you request (and pay for) a FICO report, request a free report and review it for any errors. If you spot errors, contact the appropriate financial institution and the credit bureau to get it resolved. Once you’ve sorted out any issues with your credit report, you can request a FICO report.

4. Research loans you are eligible for
Some lenders are more flexible in their qualification criteria, but meeting or exceeding all minimum requirements for the type of funding you are seeking always gives you the strongest chance of approval. Your business likely won’t be eligible for every type of funding, and researching the loans you are eligible for will help you compile the appropriate information and application requirements.

GREENBOX TIP: Only apply for funding from 2-3 lenders at a time. Too many simultaneous applications (and “hard pull” credit requests) can negatively impact your credit score. Some lenders, including Greenbox Capital, will only do a “soft pull”, which will not impact your credit score.

5. Collect your documentation
Exact documentation requirements will depend on the type of funding you are applying for and the type of lender you’re working with, but you will typically need:

You may also be required to supply:

Read our guide to small business funding requirements for more detailed information about required documentation.

6. Submit your application
After you submit your initial application, your lender will likely require additional details and documentation. The faster you are able to supply any required or requested documentation, the faster your application may be approved.

Traditional lenders may take more time to get back to you after you submit your initial inquiry, and the application process will be lengthier from start to finish. The process can take weeks or months, and approval is never guaranteed.

Alternative lenders, on the other hand, will respond much faster. Greenbox Capital will respond to your initial application in less than one hour during normal business hours.

7. Review your offer
If your application is approved, your lender will supply you with an offer package detailing the terms and conditions of your loan, including loan amounts, rates, terms, and other fees. Read your offer carefully, ask questions, and make sure you understand all of the conditions and costs before you sign.

GREENBOX TIP: If your loan application is rejected, ask the lender why so you can make improvements to your next application.

Different lenders may provide different amounts, rates, and terms. Always compare offers from different lenders to make sure you’re getting the best terms possible.

Wrapping Up
Applying for small business funding may seem complicated, but the process is more straightforward than you might expect. If you’re seeking funding to strengthen or expand your business, you can expect to follow these steps:

Start by identifying why you need funding
Determine how much funding you need, and how much funding you can afford
Review your credit reports
Research loans you are eligible for
Collect your documentation
Submit your application
Review your offer