Common SME Questions Answered

Applying for a business loan can feel daunting for small and medium-sized enterprises (SMEs), especially those that may not have gone through the process before. As a Community Development Finance Institution (CDFI), we understand that every business has a story and that not every business fits the mould of traditional banking criteria.

To help you get started, we’ve rounded up some of the most common questions SMEs ask when applying for a business loan and what you need to know to boost your chances of success.

What do lenders look for when applying for a business loan?

Lenders, including CDFIs, look for a clear picture of how your business operates and plans to grow. This typically includes:

· A solid business plan that outlines your goals and how the loan will help you reach them.

· Cash flow forecasts showing that your business can comfortably make repayments.

· Up-to-date financial records — including bank statements, profit and loss accounts, and balance sheets.

If you have previously had difficulty applying for a business loan from your bank, a CDFI like Let’s Do Business Finance may be able to help. CDFI’s tend to take a more flexible view than traditional banks. We’ll look beyond the numbers to understand your business potential and community impact to make a decision.

Do I need perfect credit to apply for a business loan?

Not necessarily. One of the advantages of applying through a CDFI is that we focus on affordability and potential, not just credit scores.

While we’ll check your credit history, we also consider:

· How you’ve managed finances recently

· Any challenges your business has faced

· What steps you’ve taken to improve

So even if your credit isn’t perfect, you still have options when applying for a business loan.

How much can I borrow as a business loan?

The amount you can borrow depends on your business size, purpose of the loan, and ability to repay.

At Let’s Do Business Finance we offer affordable loans typically ranging from £500 to £250,000, with flexible terms designed around your cash flow.

We’ll work with you to make sure the loan amount and repayment schedule are realistic for your business.

How long does it take to get a decision on my business loan?

Every business is unique, and so the decision-making process can differ. Once we’ve received all the information we need, we aim to make a decision within 7 days.

Having your documents ready such as recent accounts, bank statements, and business plans can really speed things up when applying for a business loan.

What can I use a business loan for?

Our business loans can support a wide range of needs, including:

· Working capital

· Buying new equipment or stock

· Marketing and digital upgrades

· Hiring staff or expanding premises

As long as the loan supports sustainable business growth, we’ll consider it.

What support do I get alongside the business loan?

Unlike many traditional lenders, CDFIs like Let’s Do Business Finance offer wraparound business support. That means you’ll have access to guidance on financial planning and business strategy, helping you make the most of your funding.

We’re not just here to lend money; we’re here to help your business thrive.

How can I improve my chances of approval?

Here are a few tips to strengthen your application when applying for a business loan:

· Be clear about how the loan will benefit your business.

· Keep your financial documents accurate and up to date.

· Show that you understand your market and customers.

· Be honest about challenges — lenders value transparency.

The more prepared you are, the easier it is for lenders to see the strength and potential of your business.

Ready to Apply?

If you’re thinking about applying for a business loan and want to speak with a team that truly understands SMEs, get in touch today. We’ll take the time to understand your story, your goals, and how we can help your business grow sustainably.

Talk to us today to find out what funding options are available for your business.

Contact us