Traditional Business Bank Loan Timeline

Traditional bank loans are the best option for most business owners because banks give the best rates and the best terms.

Unfortunately, traditional business bank loans are not easily accessible to most business owners and are certainly not fast as they do involve a certain process.

The typical timeline for a business bank loan may look something like this:

Preparation: (1 to 2 weeks)

Gather financials, tax returns, write out a business plan, and other required documats

Submit Application: (1 to 3 days)

Submit loan application with required documentation

Underwriting and Review: (1 to 4 weeks)

Bank Officer reviews your credit, financial documents, and determines the viability of your business

Approval Decision: (1 to 2 weeks)

You may be asked to provide additional information before a final decision is made

Loan Closing and Funding: (1 to 2 weeks)

Legal paperwork is finalized and funding is disbursed

So, depending on the complexity of your business, the type of business, the type of loan and the speed in which you provide all the documentation, the timeline for a business bank loan may be between 3 to 8 weeks.

Additional factors that may cause delays

Of course, several factors can slow down this process and extend this timeline, such as:

Incomplete documentation: Bank officers need to get a full and clear picture of your business to assess risk so they are going to be as thorough as possible so they will take their time; missing tax returns or financial statements, or unclear business plans may be a cause for further delays.

Credit Profile Not As Strong: if your personal or business credit score is low then banks will need to strongly consider other factors of your business, such as industry forecasts, seasonality of the business, cash flow, and may result in requesting additional guarantees

Collateral Issues: delays may arise during the appraisal process, title checks, disputes over valuation of asset

Condition of the Market as a Whole: uncertainty in the marketplace may cause banks to pull back and tighten lending standards

Internal Policies: banks may not prioritize small business loans if not profitable, this is commonly done on loan amounts under $100,000

Regulatory Conditions: policies such as Dodd-Frank and Basel III have made lending to small businesses more complex and costly, requiring more scrutiny

Internal Bottlenecks: staff shortages, outdated systems, high volume, are all things that can create a backlog during processing

Alternative Lending Options to Get Money Fast

There are other funding options available to business owners that are much faster and offer a certain amount of flexibility that the big banks cannot provide which may be worth exploring:

Online Lenders: there are several online lenders that offer very fast approvals, sometimes under 72 hours to a few days

SBA Microloans: these type loans are backed by the U.S. Small Business Administration and go up to $50,000 and are designed for businesses that may not qualify for traditional loans

Revenue Based Funding: makes getting your funding fast and is based more on your cash flow rather than your credit score

Invoice Financing: unlock cash flow quickly by borrowing against your unpaid invoices

Business Lines of Credit: this is a great option and offers flexible access to funds as you only draw cash when you need funding and as you pay back the funds they become available to you again

Equipment Financing: this option uses the equipment that you own or the equipment that you buy as collateral

Peer-to-Peer (P2P) Lending & Crowdfunding: this may be a great option for start-ups as you are connected directly with investors or the public. These are not as fast as the above options but can be faster than banks and more accessible

Every business is different and not all of the options listed above are the ‘right one’ for all businesses.

Lending options may appear similar but there are differences and it is important that you weigh the pros and cons for your particular business.

RevitUp Capital is in business to help you and your business succeed, by helping you to get the funding that you need, to take advantage of your next business opportunity.

Let us know how we can help.

Click Here to Keep Learning More About Business Funding

Set Up a Funding Call… Today

SUBSCRIBE to The Business Blog

Let’s RevitUp!