Applying for a business loan or grant for the first time
Finance & Funding
Key learnings
- Grants and loans are a great way to inject cash into your business, whether you’re just starting out, or looking to grow.
- You can apply for loans online or, if you’d prefer to speak to someone directly, you can go through your bank or lender.
- It’s important that you provide the correct information when applying for loans and grants, as even the smallest mistake could affect the outcome of your application.
Sourcing business finance can be an integral part of building a great business, from helping you get started to supporting growth. But what can you expect when you’re applying for a business loan or grant? In this article, we shed some light on the process and provide you with some top tips for securing finance to take your business further.
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What is the usual loan application process?
When you apply for a business loan, most lenders will begin by doing a quick eligibility check to make sure the application process is going to be worth your time.
After this, you will be asked some questions about your business, what the loan is for and some specific financial information. A credit check will take place before you receive a decision.
Most of this process can be carried out online, but you can always go directly to your bank or lender if you would prefer some support with your application.
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Tips for applying for a business loan or grant
Check for business grants first – before you take on any lending always check what grant funding is potentially available for your business. Unlike loans, grants don’t usually require any repayment. Search for available grants in your area with UMi's Funding and Grants Finder.
Prepare your information – before your application, get your business information together. Each lender might ask you different things to support your application, so make sure you gather as much as possible in advance. Prepare and collect things such as financial information, unique taxpayer reference (UTR) or company number, and business plans.
Check your application before you submit it – everybody makes mistakes sometimes, so it’s essential you check your application to ensure the information you’ve provided is correct and you’ve understood what has been asked. One misunderstanding or wrong figure could affect the outcome of your application.
Take it one application at a time – making multiple applications at once might seem like the most efficient approach to securing finance for your business, however, lenders will likely carry out credit enquiries. Applying for several loans at once could affect your credit report and raise questions in relation to your suitability for a loan.
Next steps...
- Work out what your business needs and shop around to find the best financial option available to you. Our article on Understanding the different types of business finance will help.
- If you think your business may be eligible for grant funding, the best way to get started is to check out UMi's 'Get Grant Ready' service.
- Use the UMi Funding & Grants Finder to explore the grants currently available to you.
- Use our cashflow forecast template and personal survival budget template to figure out what you can afford to borrow.