Understand What Lenders Are Looking For and Position Your Business to Secure Loans

May 7, 2025 by Gordon Advisors

Whether growing your business, upgrading existing infrastructure, or acquiring new assets, applying for a loan is something almost every business owner must go through at some point in their entrepreneurial journey.

But not all loans—and not all lenders—are created equal. The right lending partnership for one business might not be a good fit for another. Understanding what different lenders are looking for is critical for those who want to position their business to secure the best possible loan with the most favorable terms.

The size of your business, the nature of your balance sheet, and the scope of your capital needs are likely to dictate the type of loan you need—and the types of lenders you should be looking to work with. Understanding those variables and recognizing the nuances between different lending options can be critically important in securing the resources your business needs to succeed.

Checking the Boxes

Much of what lenders are looking for is not much of a mystery. Financially responsible businesses and individuals with a strong credit history, a proven business model, and sufficient cash flow and capital assets to secure the loan will typically find themselves in a favorable position.

But while most business owners understand these basics, some fail to take the simple steps ahead of time needed to make themselves the most attractive possible candidate as a borrower. The first step in positioning your business to secure a loan is to make sure you have checked these boxes and done your due diligence. Key steps include:

• Review a copy of both your personal and business credit report. Identify and address any discrepancies or inaccuracies before applying for a loan.

• Ensure that you have documentation of a strong and consistent cash flow. If necessary, consider bolstering your cash flow by resolving or refinancing any debt still on the books or by making strategic inventory or billing modifications.

• Rigorously document any capital assets that may be useful as loan guarantees or collateral, including real estate holdings, infrastructure and inventory, and/or securities.

Context and Capital

While lenders will tend to view borrowing candidates who check the boxes above more favorably, business loan applicants should also be aware of the importance of context and market conditions. Lenders don’t evaluate businesses in a vacuum, but as part of an industry and a broader marketplace that can impact loan terms and conditions—not to mention their willingness and ability to lend.

With that in mind, business owners and operators who can make a compelling and well-documented case that the outlook for their business is favorable (both as an individual entity and as part of a business segment with meaningful growth potential) will be putting themselves in a great position.

Consider the Source

When it comes to business loans, the right product is almost always dependent on the right partner. And the right partner can vary considerably depending on your business’s capital needs, past performance and individual financial and credit profile.

Individual lenders may have specific preferences or priorities that may need to be emphasized or addressed, but the biggest decision that any business borrower needs to make is whether to pursue funding through a traditional bank loan or through a non-bank lender.

Conventional bank loans for businesses can encompass a wide range of financing flexibility, including industry-specific lending, specialized lines of credit, term loans, equipment or infrastructure funding, and commercial real estate loans. They can even be used to consolidate business debt. While conventional bank loans typically have lower rates and more favorable terms, they are also more likely to require extensive documentation and are often more demanding when it comes to financial qualifications.

Business owners and operators who don’t qualify for a traditional bank loan or who have specific needs for financing freedom and flexibility may find the right lending partner in a non-bank lender. Non-bank lenders and loans may have less rigid credit requirements and can sometimes offer a faster and more flexible funding process. They may, however, have higher collateral requirements.

A good alternative for many businesses is an SBA loan. SBA loans are secured by the Small Business Administration, which gives approved lender partners greater flexibility when it comes to working with a wider range of businesses and financial products. The SBA has a Lender Match Tool that can help prospective borrowers identify potential lenders and compare rates, fees and other details—all before even applying for the loan. SBA-guaranteed loans not only often have competitive terms to non-guaranteed loans, but may provide some of the financing flexibility of non-traditional lenders, along with (in some cases) available business/financial counseling and ongoing support.

The Right Advisor and the Right Lending Partner

Finally, and perhaps most importantly, owners and operators looking to position their business to secure favorable financing should recognize that the right partner can be an invaluable asset in helping to navigate the business lending landscape. The benefits of securing the right loan are considerable, and the potential consequences of failing to do so can be costly and consequential.

At Gordon Advisors, we work closely with business owners and decision-makers to navigate these complexities. We can help you clarify and articulate your needs, identify the right potential lender, and secure the best possible loan terms to help your business thrive and grow.

For insight or support into that process or to speak with a financial professional about how we can help your business, contact Gordon Advisors at gordoncpa.com.