6 Steps to Get a Loan to Start a Business in 2026

Step 1: Review Financing Options and Business Needs

Figuring out how to get a loan to start a business can feel like an enormous undertaking. It's crucial to break it down into manageable steps. First, review your financing options and business needs.

• Term loans: Provide lump-sum funding repaid over a specific term. Fixed rates are common, making monthly payments more predictable. funding repaid over a specific term. Fixed rates are common, making monthly payments more predictable.

• SBA loans: The U.S. Small Business Administration offers government-backed business loans, including the SBA 7(a) loan, SBA 504 loan, and microloans. Eligibility requirements and how the loans can be used vary by program.

• Equipment financing: Business owners can spread out the cost of purchasing major equipment with an equipment loan, which comes with built-in collateral.

• Business lines of credit: A flexible financing option that gives borrowers open-ended access to funds. Lenders offer a credit limit that owners can draw upon and repay, which replenishes the available credit.

• Business credit cards: Provide revolving credit, typically with high interest rates.

These are standard business financing options. But if you're an entrepreneur just launching a business, you may not meet the eligibility requirements for many of these.

For businesses with little to no revenue or operating history, SBA microloans are a potential option. These offer small-dollar loans up to $50,000, though the average is around $13,000. While SBA is the funding agency, loans are administered by non-profit community-based lenders.

If your new enterprise requires equipment, then equipment financing could be another option. The built-in collateral provides a safety net for lenders.

If you have a good-to-excellent personal credit score, you may qualify for a business credit card. Though not an ideal type of financing because of the high interest rates, it can help build business credit if used responsibly. Good credit habits include reducing overall balances relative to credit limit and always making on-time payments.

Step 2: Create a Solid Business Plan

When applying for any type of financing, you typically must provide a business plan. If you have a new startup, this is especially important.

To get started, the Small Business Administration has a guide to help you write your business plan. Key sections should include:

• Executive summary: This is a detailed overview of your company, what it does and its mission. Include your location, employees, plans to scale, and current financial information.

• Market analysis: Show that you understand the field you're entering, who your competitors are, and how you'll fill a need in the market.

• Product or service: Provide an in-depth description of your offering and the potential benefits for customers.

• Financial projections: The SBA recommends providing financial projections for five years. Including forecasts such as balance sheets and cash flow statements can help build your case.

• Revenue model: Part of learning how to get a loan to start a business is being clear on your revenue model. When applying for financing, lenders want to know how you'll generate revenue, pay expenses, and get on a path toward profitability.

While many online lenders may have automated underwriting, a business plan is always good to have. Whether it's for yourself, lenders, or investors, it can help set you up for success.

Step 3: Register Your Business

If you haven't done so already, it's essential to formalize your business entity. Whether you plan to form a limited liability company (LLC) or corporation, you need to file the appropriate documents and register with the state.

You'll also need to apply for an Employer Identification Number through the Internal Revenue Service (IRS). You'll need your business entity type and Social Security Number or taxpayer ID of the responsible party to get started. The good news is that you may be able to apply for an EIN online in a matter of minutes.

The next step is to set up business banking. Having a business checking account can help with day-to-day transactions. A business savings account can help you save for taxes or future expenses.

Separating your personal and business finances shows that you're serious. Plus, it may be a requirement if you're trying to get a loan to start a business.

Lastly, make sure you get any necessary licenses or permits to operate your business. Taking steps to register your business and get your finances in order can help strengthen your application.

Step 4: Check Your Creditworthiness

Small business loan requirements tend to vary by lender. But there's one thing that often takes center stage: your credit history. If you're launching a startup, you might not have a business credit score yet.

In that case, lenders place emphasis on your personal credit score. So, before trying to get a loan to start a business, check your credit.

Go through your credit reports, which you can access at no cost through AnnualCreditReport.com. With a fine-tooth comb, check for potential errors that could hurt your credit score. If you find inaccuracies, contact the credit bureaus to rectify the issue. You may also be able to check your score through your bank or financial institution.

Lenders typically review payment history and debt-to-income (DTI) ratio. To boost your creditworthiness before applying, pay down existing debt. Continue to pay all bills and debt obligations on time.

Step 5: Prepare Business Documentation

When you're trying to get a loan to start a business, it's key to provide supporting documentation. You may not have the proven track record of more established businesses. So, it's important to give lenders as much information as possible to show that you're a good candidate for financing.

Here's a sample business loan documentation checklist:

• Bank statements
• Tax returns
• Financial statements
• Business plan
• Licenses and permits
• Employer Identification Number (EIN)

Many online lenders allow you to upload these documents securely for faster verification.

Step 6: Submit Application with Lender

When researching how to get a loan to start a business, you may struggle to find options you qualify for. Most lenders require a minimum amount of time in business, such as one year.

If you have a startup, your best options might be SBA microloans, equipment financing, and loans from alternative and online lenders.

Online lenders typically offer a streamlined experience, thanks to automated underwriting. You may be able to get prequalified and check out potential offers.

Review potential interest rates and repayment terms to have a better understanding of borrowing costs. These determine your monthly payments. Look for hidden fees and don't accept a loan offer before comparing all of these variables.

After deciding on a lender, submit an application and provide supporting documentation. If approved, you'll receive funding and begin repayment according to the terms of your loan. From there, you can invest the funds in growing your business.

Final Thoughts

Starting a business can be a dream you finally realize. But it's not without challenges. In the early stages, you may not have sufficient working capital, and growth can be difficult. As a startup, you may not meet the eligibility requirements for certain types of loans.

Even so, it's possible to secure funding in 2026 to get your company off the ground. Understanding how to get a loan to start a business can feel complex, but using these six steps as a guide can help you move forward with more confidence to get the funding you need.