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    I have a small business and I am thinking of applying for a business loan. I have never done this before, so I haven’t got much experience or knowledge on what this entails.

    A friend suggested using a lender. What kind of things are the lenders looking for? Is it alright to go with a lender instead of a bank?

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    A lender will look into your credit history, more so if your business is relatively new. However, if there isn’t much information to be gleaned from this, they may actually look into your personal credit history. This is not unheard of, so don’t be surprised by this.

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    How deeply will they look into my personal credit history? I haven’t been the best with my finances during my 20s, so I’m not that keen on showing off that portion of my financial history.

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    Very deeply. Remember, they’re going to take a risk by loaning you the money, so they have to get the full picture of your finances.

    Don’t worry too much about your finances when you were young – most lenders will be understanding. They just want to see that you have met deadlines and obligations in the past before they approve your loan.

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    You will most likely need some kind of business plan, or tangible proof that your business is feasible. The lender will want to know why you want the loan and how you are going to use this money for your business.

    By lending you money, if you can use it to make more money in a relatively short space of time, they will beĀ more inclined to lend it to you.

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    That’s true. Plus, they also want to be confident that you can pay them back. If they check your history and notice that you struggled to pay previous loans, then I doubt if you can get a loan.

    However, if you managed to pay back loans before, then you might be approved.

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    I do have a decent credit score and managed to pay back personal loans in the past. Other than my student days, my record is pretty spotless.

    Since this is a relatively new business, I have no history of business loans. Just personal ones. Will that affect my chances?

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    That’s fine, but this is why they want your personal history.

    However, they will also want to know whether your business is making enough in order for you to fulfill your monthly obligations. If you can show that you have the ability to pay them back and run your business and not struggle, then you should be okay.

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    I was in a similar situation as you. Didn’t have the best personal credit history when I was young, which affected my chances of getting a loan. I actually got rejected a couple of times before I finally found a more understanding lender.

    Mine was a medium-sized business and I used a company called Thinking Capital to get the capital I needed. For a small business looking for an alternative source of financing, I would suggest trying them. Of course, you do whatever you need to do, but they helped me when I needed it.

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    Thanks for that info. It’s good to hear your success story, makes me feel better about my own chances.