Securing your first major round of capital is a milestone for any entrepreneur, but the process is rarely straightforward. When you start looking into how to get a business loan, the sheer number of financial terms and acronyms can feel overwhelming. From our experience, there are several key details that, if understood early, could save months of stress and rejected applications.

Getting a loan in 2025 requires more than a strong business idea, it requires a clear understanding of what lenders expect. This guide breaks down business loan requirements, regulations and credit considerations so you can approach lenders with confidence and clarity.

How to Secure a Business Loan in 2025

Securing a business loan today involves more than a strong business idea; it requires understanding lender expectations, financial metrics, and regulatory changes that can make or break your application. Here’s a detailed guide to help you navigate the process with confidence.

The Right Mindset for Business Loans

Many founders view a loan as recognition for their hard work. In practice, a loan is a financial product, and the real cost is proving your ability to repay it. When learning how to get a business loan, it helps to see the process from the lender’s side. Their priority is managing risk, not forming a partnership.

This is why passion matters less than clear financial signals. Lenders pay close attention to numbers such as your Debt Service Coverage Ratio and any secondary sources of repayment that reduce their exposure.

Understanding the SBA Loan Environment

For many business owners, the Small Business Administration remains a trusted option for financing. That said, the rules have shifted in recent years. The SBA loan requirements for 2025 are guided by SOP 50 10 8, the current Standard Operating Procedure that lenders are required to follow.

One major change is the return of the Credit Elsewhere test. This requires borrowers to show they cannot secure a conventional loan on reasonable terms before the SBA will provide a guarantee. 

The updated guidelines have also made smaller loans easier to process, while larger loans now face stricter reviews around character and eligibility. Knowing how these rules work is an important step when learning how to get a business loan that supports your growth plans.

The Numbers Lenders Care About Most

Strong revenue alone does not make a low-risk borrower. If your business earns a million dollars but spends almost all of it, lenders will see that as a warning sign. This is where the DSCR business loan calculation becomes central to your application. 

DSCR, or Debt Service Coverage Ratio, measures how well your income covers your debt obligations. The formula itself is straightforward, but its impact on loan approval decisions is significant.

In 2025, most lenders look for a DSCR of at least 1.25x. In practical terms, this means your business should generate $1.25 in income for every $1 owed in debt payments.

If you are preparing to apply and learning how to get a business loan, reviewing expenses and improving cash flow several months in advance can strengthen this ratio and improve how lenders view your financial position.

Why Your Credit Score Still Matters

Can you qualify for a business loan with a weak personal credit score? In theory, yes. In practice, it is very challenging. For SBA and most conventional loans, the business credit score for SBA lending is usually a blended evaluation. Lenders review both your personal FICO score and your business’s FICO SBSS score to assess overall risk.

In 2025, many SBA lenders look for a personal credit score of at least 680 for 7(a) loans. Scores below 620 often narrow your options to microloans or higher-cost alternative financing. 

When learning how to get a business loan, personal credit should not be overlooked. Lenders view it as a strong indicator of how you will handle the business’s financial responsibilities.

For more details on building your business credit, check out our How to Build Business Credit From Scratch guide.

Equity Injection and Personal Investment

One of the biggest surprises for first-time borrowers is the requirement for an equity injection. Many entrepreneurs assume they can finance 100% of a startup or acquisition. Under the current SOP 50 10 8 guidelines, you are typically expected to contribute at least 10% of the total project cost in cash.

This “down payment” demonstrates to the lender that you are personally invested in the venture’s success. If the business fails, your own funds are at risk first, providing the lender with a safety net. 

In certain cases, “seller debt” on full standby can cover part of this requirement, but the rules for doing so are strict.

Understanding Security and UCC Liens

When applying for a business loan, you will encounter a document referencing a collateral UCC lien. While many borrowers overlook the fine print, it is a critical component. A UCC-1 filing is a legal notice that the lender holds a security interest in your business assets.

If you default on the loan, the lender has the right to seize assets such as equipment, inventory, and accounts receivable. In 2025, lenders are increasingly filing “blanket liens,” which cover both existing assets and any future acquisitions. 

Being aware of this in advance allows you to negotiate which assets are pledged and better protect your business.

The Ultimate Business Loan Documents Checklist

Submitting an incomplete application is the quickest way to get a rejection. In 2025, many lenders use automated systems that flag missing information, and once flagged, it can be difficult to regain priority in the review process. Use this checklist to ensure your application is complete and well-prepared:

• Tax Returns: Three years of personal and business federal returns.
• Financial Statements: Current Profit & Loss (P&L) and Balance Sheet, no older than 90 days.
• Business Plan: A detailed 12–24 month projection including assumptions explaining expected growth.
• Accounts Receivable/Payable: Aging reports showing who owes you and who you owe.
• Legal Documents: Articles of Incorporation, business licenses, and copies of your commercial lease.
• Owner Resumes: Evidence that you and your management team have the experience to run the business successfully.

Where to Apply: Choosing the Right Lender

Understanding how to get a business loan also means knowing where to apply. Different lenders serve different types of businesses and risk profiles:

• Big Banks: Offer competitive rates but have a low tolerance for risk. Best suited for established businesses with significant collateral.
• Community Banks: Often hold loans in-house as portfolio lenders. They may place more value on the story and potential of your business.
• SBA Preferred Lenders (PLP): For SBA loans, work only with PLP lenders. They have delegated authority to approve loans internally, which can significantly shorten the approval timeline.
• Online/Fintech Lenders: Provide fast access to capital but generally charge higher interest rates. Best for short-term working capital rather than long-term growth.

Read How to Spot Predatory Lenders in Merchant Cash Advance Deals to learn the red flags.

Common Pitfalls to Avoid

When learning how to get a business loan, certain overlooked mistakes can derail your application:

• Co-mingling Funds: Using your business account for personal expenses, even small ones, signals disorganization and increases perceived risk.
• Applying for Too Little: Loans under $100,000 may be rejected because banks face fixed processing costs, making smaller loans less profitable.
• Ignoring Online Presence: In 2025, underwriters research your business online. Poor reviews or a broken website can negatively impact your perceived credibility and character.

Understanding the Timeline

Getting a loan is not a weekend project. From the moment you decide how to get a business loan to the moment cash hits your account, expect a window of 45 to 90 days. SBA loans typically take the longest due to the government oversight, while conventional bank loans might move slightly faster if you are a “perfect” candidate.

Staying proactive during this time is key. Check your email daily. If a lender asks for a document, send it within an hour. The “speed of the borrower” is often the biggest factor in the “speed of the funding.”

Conclusion

Landing your first major funding is a transformative moment for any company. It provides the fuel for expansion, hiring, and innovation. However, the path to approval is paved with meticulous documentation and a deep understanding of lender expectations.

By focusing on the SBA loan requirements 2025 and ensuring your DSCR small business loan ratios are healthy, you position yourself as a low-risk, high-reward partner for any financial institution. 

Remember, the goal of learning how to get a business loan isn’t just to get the money; it’s to get the right money with terms that allow your business to thrive rather than just survive.

Applying for a loan is a rigorous process, but it also forces you to look at your business with a critical eye. Use this preparation phase to tighten your operations, clean up your books, and sharpen your vision. 

When you finally sign those closing documents, you won’t just have a check; you’ll have a more professional, stable, and scalable business. Now that you have the roadmap for how to get a business loan, the next step is yours to take.