loan application in a business plan

How to Write a Business Plan for a Loan

Business plans are often required when applying for funds from venture capitalists or other private investors, but even if you are seeking a bank loan for your company it is very helpful to prepare one since the lender wants to be confident that he is taking on an investment with growth potential so that you can repay the loan.

In this article, you will learn about the types of business loans, the importance of the business plan in your application for a loan, and how to write a business plan that will help you get the funding you need for your company.

Download our Ultimate Business Plan Template here

What Is a Business Loan?

A business loan is funding that is provided by a financial institution to a company for it to carry out its day-to-day operational activities. It also supports the purchase of equipment, refinancing of debt, and other purposes. Small businesses might need these loans because they may not have enough funds to buy equipment, refinance debt, or because they encounter financial difficulties.  

Your Loan Application

You can apply for a commercial loan with your local bank, credit union, Small Business Administration (SBA) lender, or community development financial institution like Capital Impact. You should expect that the lender will ask you detailed questions about all aspects of your business to ensure that he or she is lending you money that will be repaid.

In addition, if you are looking to purchase a business or commercial real estate, the lender may ask for additional information and documentation to assess your qualifications and ability to repay the loan.

Before applying for a business loan it can be helpful to research different types of loans so you understand what is available and what you will need to pay attention to in your loan proposal.

Common Types of Business Loans

There are many types of loans for small businesses, including:

• lines of credit
• commercial mortgages
• equipment financing

Contact different lenders in your area to see what kind of loan terms they offer and if their interest rates are within your budget.

What is a Business Plan?

A traditional business plan is a document that provides an analysis of the present situation and future financial projections for a company. It includes details about the owners, management team, customers, location of the business, finances, marketing plan, and other information.

A comprehensive and well-researched business plan will help lenders make informed decisions about providing a loan for your business.

To help you get started, you can download our sample business plan for bank loan pdf .

Why Do You Need a Business Plan to Get a Business Loan?

A loan proposal business plan is your opportunity to show the lender you understand your business, its capabilities, and how it operates within the industry in which it competes. By putting together a clear and concise document that outlines all of this information, the lender should have a much easier time understanding how you have arrived at your numbers and where you are going in the future.

A business plan is also helpful to the lender because it provides an opportunity for him or her to ask you questions, further clarifying details that might not be clear from your application materials alone. This way the lender can walk away from the meeting with a good understanding of what he or she is loaning money to and how likely it is he or she will see the loan repaid.

How to Write a Business Plan to Get Approved for a Loan

Different lenders may ask for different sections of your business plan, but most require some combination of the following key elements.

1. Executive Summary

The Executive Summary is the first section of your business plan that a lender will read, but typically the last section written. It is very important because it acts as a snapshot of your business plan and allows the person reading to get an overview of what you are proposing.

The summary should include:

• A statement about why you need the business loan
• Details on how much money you want to borrow, when you will repay it, and interest rates
• A description of how the proceeds from the loan will be used
• Your business’s historical and projected financial information (again)
• The expected impact on your company and the industry as a whole if you are successful.

2. Company Description

In the Company Description, you should include basic facts about your company such as:

• What is the business structure (corporation, partnership, limited liability company (LLC), etc.)?
• How long has your company been in operation?
• What is the size of your workforce?
• What accomplishments or milestones have you achieved within the last year?

This section should also include information about your future business plans.

• How do you plan to expand, if at all?
• Who are your main competitors and how is your company different from them?
• What changes will you make to excel against these competitors?

3. Industry Analysis

In the Industry or Market Analysis, you should include information about your industry in general.

• What are the strengths and weaknesses of your industry?
• How will your company compete in it?
• What trends within the industry affect its future success or potential struggles?

You may also include information about your specific niche in the market. If your company operates in a very specific area of the industry, be sure to highlight it.

4. Customer Analysis

The Customer Analysis section of your business plan helps a lender understand who your customers are and why they will buy from you.

In this section, you should include information on the following:

• Your target audience and the individual customer segments
• How many potential customers you have within your target market
• How much your customers typically spend, and how much you expect them to spend in the future
• What has caused these changes or trends to occur and how they will impact your business

5. Competitive Analysis

This section should show the competitive landscape and how you plan to compete against your competitors.

• What are their strengths?
• Where do they fall short?
• What changes will you implement to get ahead of them?
• What are your company’s competitive advantages over these competitors?

6. Marketing Plan

This section should include a detailed description of the marketing strategy you plan to implement.

• What is your customer acquisition cost? How much will it cost you to bring in one new customer?
• How will you reach these potential customers? Be specific about your marketing strategy, advertising methods and costs.
• Who is responsible for implementing each part of the marketing plan and how much it is expected to cost?

7. Operations Plan

Your Operations Analysis should describe the way your company currently operates and how it will operate with the help of the loan.

• What are your company’s strengths? Weaknesses?
• What have you implemented in the past 12 months that has led to increased revenue, decreased costs, or improved efficiency?
• How will you continue to operate efficiently with the proceeds?

8. Management Team

In the management section, you should describe your business in terms of its personnel structure.

• What are the responsibilities of each person on your team?
• Who are they? What are their qualifications?
• How will their roles change when you receive the loan proceeds?

9. Financial Plan

This section should include your company’s financial statements include the projected income statements, projected balance sheet, and cash flow statements for the next 3 – 5 years.

You can assume that you will receive loan proceeds in 20XX, so plan accordingly.

Include a five-year break-even analysis and an explanation of how you arrived at your income statement and cash flow projections. Don’t forget to include interest and loan payments in your financial projections.

10. Appendix

In this section, you will include the supporting documents for the claims within your business plan. This section should include:

• A loan agreement
• A list of all applicable business licenses, permits, etc. that your company holds or has applied for

You may also include:

• An organizational chart for your company
• The resumes of the members of your management team
• The resumes of any employees who will be making a significant impact on your business with the loan money
• Copies of contracts, leases, and other agreements that are relevant to your business plan
• Complete financial statements and projections if you only include a summary in the Financial Plan section

These documents should be attached to your business plan in a separate file if they are not included and may need to be submitted with the final small business loan application.

Tips for Writing a Business Plan for a Loan

To have a successful business plan and loan application, you need to know exactly what information your loan officer is looking for and how to find it.

• Before you submit your application, be sure to carefully edit and proofread it for errors. Errors in a business plan may lead a lender to question your attention to detail, so make sure it is polished and error-free.
• Always be sure to include an executive summary of the main points of your plan at the beginning, as some loan officers may not read all of the details.
• Be sure to keep your tone professional and business-like.
• Include detailed financials, market analysis, and other crucial information.
• Remember that any omission or inaccuracies will be carefully scrutinized by a lending officer, so be sure you have all of the necessary documents before submission.
• Finally, remember that lenders often appreciate creativity and outside-the-box thinking when it comes to business plans, but don’t let it distract from the necessary information for your application.

Writing a good business plan is one of the most important and necessary steps toward securing a loan or other source of capital.

Use our proven business plan template provided below, and you’ll be able to give your lender all of the information they need to make an informed decision.

The key is to do it right. By following the steps outlined above and including all of the necessary documents (and editing/proofing your application), you should significantly improve your chance of securing a loan for your business.

How to Finish Your Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

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4 Steps to Prepare the Best Business Loan Application

Meredith Wood

6 min. read

Updated October 27, 2023

The act of applying for a small business loan can be intimidating. You are excited about the prospect of obtaining a loan to grow your business, but at the same time, you are worried about making a mistake that could have a negative impact on your finances.

Learning more about a small business loan does not mean you have to apply. Instead, you can use this process to better understand what goes into obtaining a loan, how it could benefit you, and which steps to take if you decide it is the right decision.

Every business is in a unique position. For example, you may be seeking a loan despite the fact that your credit is less than excellent. Or maybe you are buying a home at the same time you are seeking a business loan.

Regardless of your situation, there are things you need to understand about applying for a business loan, before starting the application.

• 1. Prep your finances before you start

The process of getting started is easier than most people realize. This is all about organizing your finances, knowing your options, and moving forward in the appropriate manner.

Here are two things you want to do before you get started:

Organize your finances

One of the primary fears associated with a small business loan application is the amount of information required. There is no way around this, as every lender requires a variety of information. The U.S. Small Business Administration provides helpful information about loans and the financial documents required to apply for various types of loans.

Know what type of business loans are available, the terms and conditions associated with each one, and the process of applying. It may take some time to collect this information, but it will help you make the best decision going forward.

• 2. Decide if you want to apply to a local bank or online

Many years ago, the only way to obtain a small business loan was to get in touch with a local lender and let them guide you through the process.

In today’s world, getting an online business loan is also an option. But, what does that mean for you? Where should you start? Let’s break it down:

The benefits of dealing with a local bank:

• Ability to meet face to face throughout the process
• You may already have an existing relationship with the bank
• Opportunity to ask others in your area about their experience with the lender
• A bank loan will always be cheaper than an online loan

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The advantages of an online business loan:

• Faster time to funding
• Easier applications
• Ability to connect with multiple lenders via one application
• Options for those with bad credit

Obviously, both products have benefits, but there are only two questions you should really ask yourself to decide where to start your search:

Can I qualify for a bank loan?

Bank loans are notoriously hard to get approved for. You’re going to need a 700+ credit score, strong revenues, profitability, and good cash flow. If this sounds like your business, you should probably start with a bank, as you stand a better chance than most, and to reiterate, a bank loan will always be the lowest cost capital available.

How fast do I need this money?

Even if you think you could get approved by a bank, keep in mind that the process could take weeks, if not months. If you need cash fast, your best option is going to be online. Many online lenders can get you funded in days, and it may be worth it for you to pay a little bit more to meet this immediate need.

Only you can decide which option is best for you and your company, but make sure to be honest with yourself about your approval chances, and what you really need this money for.

• 3. Think like a lender

You’ve prepped for your loan search, decided where you want to start the search, so lets talk about what lenders will be looking for during this search. Now, every lender has different criteria they use to underwrite, but here are the most common factors these lenders will consider:

• Desired loan amount. Yes, the loan amount you want could affect your chances of finding funding. Most often, lenders will not make a loan greater than eight to 12 percent of your annual revenue. So if you have $50,000 a year in revenue, you’re doing yourself a disservice by asking for a $300,000 loan.
• Loan purpose . What are you going to use this loan for? Depending on your answer, you may not be able to work with certain lenders. For example, if you’re looking to buy out a partner or acquire a new business, you might have more trouble finding a loan than if you were looking for working capital or to expand your business. Be upfront and specific about how you intend to use the funds with any lender.
• Credit score. Your personal credit score is a very important factor in the process. Some lenders have a set threshold that they can work with (only borrowers with a 600+ credit score, or 700+, for example.). You should pull your credit score before you apply, and then ask lenders what their minimum credit score requirement is. This way, neither of you waste your time.
• Annual revenue. Lenders want to know your business is making enough to pay back your loan. The higher your revenue, the better.
• Average bank balance. Not only do lenders want to know how your sales are, but they want to know how you manage the cash coming in. Almost every lender will ask to see your business bank statements to verify what your average bank balance is. They want to know you keep cash on hand, ensuring your business has the funds to cover loan payments.
• The profitability of your business . To reiterate, it’s great if your business has strong sales, and your bank balance is solid, but if your business isn’t profitable, lenders may be hesitant to work with you. How will the loan payment work into this equation? That being said, lack of profitability can happen when businesses experience high-growth, so if you aren’t profitable, you still might have a chance, as long as the other factors are strong.
• Industry. There are some industries that certain lenders deem “riskier,” and every lender is different. Along with asking a lender what their minimum credit score threshold is, ask them if they will work with your industry.
• 4. Follow best practices

Before you do anything, review the business loan application in its entirety. If you have any questions, reach out to the lender before starting. This will clear the air and improve your chances of avoiding mistakes that delay the process.

As you move through the application, these tips are critical to your success:

• Be truthful and accurate with every bit of information you provide. Lenders will require certain documentation to verify this information (such as your tax returns to verify revenue), so you need to make sure your answers match what these documents reveal.
• Be thorough. More information is always better.
• Don’t delay in providing follow-up information, if required. You want to provide lenders with what they need while your application is still top of mind.

Once you have an application in front of you, the only thing left is to complete it and wait for final word from the lender. 

Meredith Wood is the Editor-in-Chief at Fundera , an online marketplace for small business loans that matches business owners with the best funding providers for their business. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith is a resident Finance Advisor on American Express OPEN Forum and an avid business writer. Her advice consistently appears on such sites as Yahoo!, Fox Business, Amex OPEN, AllBusiness, and many more.

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How To Write A Business Plan for A Bank Loan (3 Key Steps)

Wondering how to create a business plan that will wow your banker.

You're not alone.

Most entrepreneurs see writing a business plan as a gargantuan task – especially if they've never written one before.

Where do you start?

How do you calculate the financials?

How can you be sure you're not making a mistake?

And if you need a business plan for a bank loan, getting this document right is absolutely essential.

So here's what we recommend: simplify the planning process by breaking the work up into manageable, bite–sized steps. That way, you can focus on one section at a time to make sure it's accurate.

Here's a quick overview of the step–by–step process we guide entrepreneurs through when they sign up for LivePlan.

Step 1: Outline The Opportunity

This is the core of your business plan. It should give loan officers a clear understanding of:

• What problem you're solving
• How your product or service fits into the current market
• What sets your business apart from the competition

There are three key parts to this step:

The Problem & Solution

Detail exactly what problem you are solving for your customers. How do their lives improve after you solve that “pain point” for them?

We recommend actually going out and chatting with your target audience first. That way, you can validate that you're solving a real problem for your potential customers.

Be sure to describe your solution in vivid detail. For example, if the problem is that parking downtown is expensive and hard to find, your solution might be a bike rental service with designated pickup and dropoff locations.

Target Market

Who exactly are you selling to? And roughly how many of them are there?

This is crucial information for determining whether or not your business will succeed long–term. Never assume that your target market is “everyone.”

For example, it would be easy for a barber shop to target everyone who needs a haircut. But most likely, it will need to focus on a specific market segment to reach its full business potential. This might include catering to children and families, seniors or business professionals.

Competition

Who are your direct competitors? These are companies that provide similar solutions that aim to solve your customers' pain points.

Then outline what your competitive advantages are. Why should your target market choose you over the other products or services available?

Think you don't have any competition? Think again. Your customers are likely turning to an indirect competitor that is solving their problem with a different type of solution.

For example: A taco stand might compete directly with another taco stand, but indirectly with a nearby hot dog vendor.

Boost your chances of securing a loan

See how LivePlan can help you write a fundable business plan

Step 2: Show how you'll execute

This is where the action happens! Here you'll get into the details of how you'll take advantage of the opportunity you outlined in the previous section. This part demonstrates to banks that you have a strong plan to achieve success.

The three main components of this step include:

Marketing & Sales Plan

There can be a lot of moving parts to this one, depending on your business model.

But most importantly, you'll need to fully explain how you plan to reach your target market and convert those people into customers. A few example of what should be included:

• Positioning strategy. What makes your business both unique and highly desirable to your target market?
• Marketing activities. Will you advertise with billboards, online ads or something else entirely?
• Pricing. What you charge must reflect consumer demand. There are a few models to choose from, including ‘cost–plus pricing’ and ‘value pricing.’

This is the nuts and bolts of your business. It's especially important for brick–and–mortar companies that operate a storefront or have a warehouse.

You may want to explain why your location is important or detail how much space you have available. Plan to work at home? You can also cover your office space and any plans to move outside your house.

Any specialized software or equipment and tools should also be covered here.

Milestones & Metrics

Lenders and investors want to be confident that you know how to turn your business plans into financial success. That's where your milestones come in.

These are planned goals that help you progress your company. For example, if you're launching a new product your milestones may include completing prototypes and figuring out manufacturing.

Metrics are how you will gauge the success of your business. Do you want to generate a certain level of sales? Or keep costs at a certain level? Figuring out which metrics are most important and then tracking them is essential for growth.

Step 3: Detail your financial plan

This is the most crucial – and intimidating – part of any business plan for a bank loan. Your prospective lender will look especially close at this section to determine how likely your business is to succeed.

But the financial section doesn't have to be overwhelming, especially if you break the work into smaller pieces. Here are 3 items that your plan must have:

Simply put, this is your projections for your business finances. It gives you (and the bank) an idea of how much profit your company stands to make. Just a few items you'll need to include:

• Revenue. List all your products, services and any other ways your business will generate income.
• Direct costs. Or in other words, what are the costs to make what you sell?
• Personnel. Salaries and expenses related to what you pay yourself, employees and any contactors.
• Expenses. Things like rent, utilities, marketing costs and any other regular expenses.

Exactly how will you use any investments, loans or other financing to grow your business? This might include paying for capital expenses like equipment or hiring personnel.

Also detail where all your financing is coming from. Lines of credit, loans or personal savings should be listed here.

Bankers will be giving this section a lot of attention. Here's what you'll need:

• Profit & Loss. This statement pulls in numbers from your sales forecast and other elements to show whether you're making or losing money.
• Projected Balance Sheet. This is likely the first thing a loan officer will look at: it covers your liability, capital and assets. It provides an overview of how financially sound your business is.
• Projected Cash Flow. Essentially, this statement keeps track of how much money you have in the bank at any given point. Loan officers are likely to expect realistic monthly cash flow for the next 12 months.

Don't forget the Executive Summary

The Executive Summary is the first section of your business plan, but we recommend you tackle it last.

It's basically an introduction to your company, summarizing the main points of your plan. Keep it to just one or two pages and be as clear and concise as possible.

Think of it as a quick read designed to get the lender excited about your business.

If you need help writing your plan

Not everyone feels confident writing a business plan themselves, especially if it's needed to secure a bank loan.

And although you don't need an MBA to write one, getting your business plan right often does require quite a bit of work. So if you need help writing your plan, here are two options to consider:

• Hire a professional business plan writer to do it for you. This is typically the most expensive route, but worth it if you're pursuing $100,000 or more in capital.
• Sign up for LivePlan. It's business planning software that walks you through a step–by–step process for writing any type of plan. It's an affordable option that also gives you an easy way to track your actuals against your business plan, so you can get the insights you need to grow faster.

LivePlan makes it easy to write a winning business plan

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How to get a business loan in 6 steps

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Key takeaways

• The type of business loan you choose depends largely on why you need the loan and what you’ll be using it for.
• Lenders set their own qualifications for business loans, including time in business, personal and business credit score, annual revenue and collateral.
• The application process may vary depending on the lender and type of loan, and the funding time can range from a few days to 90 days or more.

Getting a business loan requires careful research and consideration to make sure you’re choosing the best funding option for you. Different loans serve different purposes, so researching loan options is a good starting point.

You’ll also need to make sure that you meet the lender’s requirements for credit score, time in business and cash flow, ensuring that your business can easily handle loan repayments. Let’s walk through the process of choosing and applying for a business loan step by step.

1. Choose a type of loan

The type of business loan you choose depends largely on why you need the loan and what you’ll be using it for. You might need a business loan to:

• Purchase equipment, assets or real estate
• Restock inventory
• Fund the development of a product
• Pay for an emergency expense
• Keep payroll and accounts payable up to date despite gaps or delays in revenue
• Draw from as needed for small- or medium-sized purchases

You’ll see many types of business loans on the market, and each comes with its own advantages and disadvantages. Take a look at some of the most common business loans and what they’re best used for.

2. Decide how much you can afford to borrow

At the end of the day, how much you can afford to borrow depends on the wiggle room in your business finances. You want to use business profits to make repayments on the loan.

To find out whether your business can afford a loan, many lenders will use something called a debt service coverage ratio (DSCR). The ratio essentially figures your business’s yearly cash flow divided by the cost of the loan.

DSCR = annual net operating income / total annual debt, including principal and interest

Many lenders won’t consider any business with a DSCR below 1.25, and the higher the number, the stronger you look.

For example, let’s calculate your DSCR if your annual net operating income is $500,000 and your loan’s yearly principal and interest is $225,000.

Step 1. Find your annual net operating income. Calculate your business revenue minus operating expenses.

Step 2. Calculate the yearly cost of your loan , including principal and interest. Use our business loan calculator to help you.

Step 3. Divide the annual net operating income by the annual loan cost.

$500,000 / $225,000 = 2.2222222

Here, your DSCR is 2.2, a number that shows a strong ability to repay the loan you’re vying for.

3. Check your eligibility

Requirements across lenders vary widely because lenders set their own qualifications for business loans . Brick-and-mortar banks tend to work with businesses that have a strong financial profile. Alternatives like online lenders may lower their qualifications, helping startups and business owners with subprime credit get a business loan.

Lenders may set requirements for:

Time in business

Traditional banks may require one to two years of business under your belt to qualify. Alternative and online lenders may fund businesses as young as six months old. Taking time to get your business on solid financial ground will help when making loan repayments.

Personal and business credit score

Since many small businesses don’t have established credit, lenders often use your personal FICO score to get a picture of your creditworthiness. For the best interest rates, most banks will look for a score of 680 or higher.  Online lenders may drop to the 500s to approve businesses with bad credit for a loan.

Once you’ve built up your business’s credit profile, lenders may rely on your business credit score to approve a loan. Your business credit score will range from 0 to 100 (or 0 to 300 with the FICO Small Business Scoring Service). The score factors in your company’s size, payment history, industry and other debts. A strong business credit score could mean that you don’t need to guarantee the loan with your personal assets.

Annual revenue

Most lenders require you to meet a minimum amount of revenue to prove you have enough cash flow for a loan. Requirements are different based on the lender and type of loan. Some lenders go as low as $40,000, while others set the annual revenue at $100,000 or more.

Collateral or personal guarantee

Since small businesses pose a higher risk to lenders, many lenders require you to secure the loan with assets like business equipment. Another way to secure the loan is to sign a personal guarantee , which allows the lender to seize your personal assets if you default on the loan. Some lenders require both.

Bank relationship

Relationships can make a big difference in managing your business finances and getting a loan. If your business finances are in a gray area, having an established bank relationship can help your business get approved for a loan.

And if you find yourself in a tight spot with repayments, your lender may be willing to work with you to defer payments or restructure the loan. You can start your banking relationship by opening a business bank account at your preferred bank.

4. Compare small business lenders

Once you’ve narrowed down the type of loan you need, you can compare lenders side by side to find the best small business loan for you. Take a look at the following types of lenders that offer small business loans.

Both traditional banks and online lenders offer wide-ranging loan amounts, anywhere from $5,000 to $600,000 or more. However, the interest rates are where you’ll see a real difference. Maximum interest rates for online lenders can range from 30 percent to 100 percent — much higher than you’ll see with banks.

Banks and credit unions

Banks and credit unions can offer APRs between 5.5 to 12 percent for conventional loans and lines of credit, though the exact rate varies based on your business’s financial standing.

Many banks also offer loans backed by the U.S. Small Business Administration. As of April 2024, SBA loans have interest rates between 11.50 to 16.50 percent, and you can secure loan amounts up to $5 million. Repayment terms may also stretch out longer than conventional loans, ranging from five to 25 years.

Community Development Financial Institutions

Community Development Financial Institutions (CDFIs) are a network of organizations that offer financial services and educational support to underserved communities. Each CDFI serves a specific target group for the purpose of building up the community, and they often accept customers with poor or no credit history.

If you’re part of an underserved community, working with a CDFI could help you build a sustainable business through funding, mentorship and additional resources.

Minority Depository Institutions

Minority Depository Institutions (MDIs) are financial institutions in which minority individuals own most of the stock or the board of directors are mostly minority individuals. Many MDIs focus on serving minority communities, providing business loans to entrepreneurs who are historically underserved in the banking industry.

5. Gather required documents

Lenders not only need to know your business’s financial standing and legal status, but they also want documentation on how you plan to use the loan and its expected effect on your business. When you apply for a business loan, your lender should have a full list of required documents . Some of the documents you should have ready to go include:

• Personal documentation. Your lender may request information about your finances, background, other sources of income and resume. If you have a business partner or co-owner, you must include their information too.
• Business plan. While not every lender will require a business plan, having one is beneficial. Your business plan should outline how you intend to use your loan funds and how additional financing will benefit your business. You should also include how the funds will improve revenue and your ability to repay the loan.
• Business financial statements. Most lenders require two years of income tax returns, balance sheets, profit and loss statements, bank statements and cash flow projections to determine if your business can repay a loan.
• Legal documents. To prove ownership and your business’s status, you’ll need to provide business insurance, a business license and any other legal documents pertaining to your business.

6. Apply for a business loan

Most lenders — both banks and online lenders — offer online applications that require minimal initial paperwork. With some banks, you’ll go in person to apply for the loan. In this case, you may want to contact the bank for a list of required documents ahead of time.

Once your application is received, the lender should be in contact within a few days to discuss your business’s eligibility and any additional paperwork required. But, the exact amount of time until you get the funding can vary depending on the lender and type of loan.

Every lender is different. Some may take only a few days to review your application. Others may take weeks. Many online lenders boast funding in as little as one to two business days. An SBA loan can take 30 to 90 days or more to fully process.

However, since the average application requires basic documentation, you can have a Small Business Development Center review it. They can give you tips, advice and strategies on improving your application — and thus your chances for approval.

Bottom line

If you’re considering applying for a business loan, you first need to decide what type of loan your business needs, how much you can afford and if your business meets the minimum qualifications.

Reach out to lenders you have worked with in the past or banks you already have a relationship with to discuss the process. You could also meet with a business advisor or a member of a Small Business Development Center in your area to learn more about what your business may qualify for.

Frequently asked questions

How hard is it to get a business loan, what disqualifies you from a small business loan, how long does a business loan take to get.

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How to Apply for an SBA Loan in 5 Steps

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Table of Contents

1. Choose the right SBA loan for your needs

2. determine if you qualify for an sba loan, 3. find an sba lender, 4. prepare your sba loan application, 5. submit your sba loan application package.

U.S. Small Business Administration loans typically offer long repayment terms and low interest rates. As a result, these small-business loans are among the most affordable and sought-after forms of funding for entrepreneurs — but SBA loan applications are also among the most rigorous.

By taking the time to understand the process and your loan options, however, you’ll put yourself in the best position to apply and get approved.

Here are five steps to apply for an SBA loan.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

There are three main SBA loan programs : the 7(a) loan program, the CDC/504 loan program and the microloan program.

SBA 7(a) loans are issued by participating lenders, like banks and credit unions. 504 loans, on the other hand, come from three sources — a third-party lender, a Certified Development Company (CDC) and the borrower. Both of these loan types are partially-guaranteed by the SBA.

With microloans, the SBA funds intermediary lenders (typically nonprofits and community organizations) directly and they completely process, distribute and administer the loans themselves.

Here’s an overview of these three SBA loan options:

Ultimately, the right SBA loan for you will depend on why you need funding, how much funding you need and your qualifications, among other factors.

SBA loan requirements will vary based on your loan program and lender — but you’ll also have to meet a set of standard criteria laid out by the SBA. These qualifications include:

Must be a for-profit business operating in the U.S.

Must be a small business, as defined by the SBA.

Must be able to demonstrate the need for the loan funds and show how you’ll use them.

Must have sought out other forms of financing before turning to an SBA loan.

Must be able to show that you’re creditworthy and that you can repay a loan.

Cannot be delinquent on any existing government loans.

If you can meet these requirements, you’ll then need to confirm that you can qualify with an SBA lender. Because 7(a) and 504 loans are issued by traditional lenders, they tend to have more stringent criteria than microloans. You’ll typically need:

Good credit (score of 650 to 680 or higher). 

Strong revenue.

Multiple years in business.

For microloans, on the other hand, you may be able to qualify with a credit score of 620 or higher and less than two years in business.

If you don’t think you can qualify for an SBA loan, you might pivot your search to online lenders. These companies typically have more flexible qualification requirements and faster funding times compared to bank and SBA lenders.

» MORE: Compare the best online business loans

You’ll want to find an SBA lender that has sufficient experience processing and issuing SBA loans — and one that offers the loan type you’re looking for.

To start, you can try reaching out to a bank or financial institution with which you have a previous relationship. Popular small-business banks like Bank of America , Wells Fargo and Chase , for example, each offer 7(a) and 504 loans.

You can also browse a list of active CDCs and a list of active microlenders on the SBA’s website.

To connect with lenders directly, you can use the SBA’s lender match system . With Lender Match, you’ll answer a few questions about your business and in two days, you’ll receive an email with possible lender matches. You can then contact the lenders for more information and compare their rates, terms and fees.

The details of your SBA loan application will vary slightly based on your lender and loan type. In general, however, you’ll need to provide the following documentation:

SBA-specific forms

SBA Form 1919, Borrower Information Form.

SBA Form 912, Statement of Personal History.

SBA Form 413 , Personal Financial Statement.

SBA Form 148, Unconditional Guarantee (or the lender’s equivalent). The SBA requires that anyone with 20% or more ownership in the business provide an unlimited personal guarantee. Owners with less than 20% ownership may provide a full or limited guarantee (SBA Form 148L) [0] U.S. Small Business Administration . Lender and Development Company Loan Programs . View all sources .

Financial statements

Current income statement and balance sheet.

Income statements and balance sheets from the previous three years.

Cash flow projections.

Three years of business tax returns (or all tax returns to date).

Three years of personal tax returns.

Existing debt schedule, if applicable.

Detailed listing of all collateral.

Supporting documents

Business certificates or licenses.

Loan application history.

Resumes for each business owner.

Business overview and history.

Business lease.

If you’re using your SBA loan to buy a business , finance a franchise or purchase real estate, you may be required to provide additional documentation.

Once you’ve gathered all of your documentation, it can be helpful to have a mentor or business advisor look over your loan application in its entirety. They can point out missing pieces of information or help you strengthen any weak spots to increase your chances of approval.

Then, you’ll submit the application to your SBA lender. The lender will underwrite your application and decide whether or not to approve the loan.

If you’re approved, the lender will send your application to the SBA for review. During this process, the SBA may re-request documents or ask for additional information. Once you’re approved by the SBA, you’ll receive an initial commitment of your loan terms and you’ll start the closing process.

» MORE: Was your SBA loan application denied? Here’s what to do next

It’s important to note that not all SBA lenders have to send their applications to the SBA for review. Preferred lending partners, or PLPs, can make final credit decisions without SBA approval, thereby expediting the application process [0] Congressional Research Service . Small Business Administration 7(a) Loan Guaranty Program . View all sources .

Microloans are also not subject to SBA review, as these intermediary lenders have the authority to process, distribute and close loans on their own.

Overall, it can take anywhere from 30 to 90 days to get an SBA loan . PLP and microlenders can likely offer the fastest timelines, but SBA loans will still be slower to fund than many other small-business loan options.

Find the right business loan

The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.

A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.

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How to Properly Write a Business Loan Request

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Have to submit a business loan request letter as part of your loan application? Not sure how to get started?

We don’t blame you. These kinds of letters aren’t as common as they used to be. While online lenders don’t usually ask for small-business loan requests, some traditional banks and credit unions still do. And if you apply for an SBA business loan (a loan backed by the US Small Business Administration), you’ll need a small-business loan request as part of your loan application package.

No matter which lender you’re applying with, this guide will help you write a strong business loan request letter―and to get the business loan you need.

How to write a business loan request letter

• Start with the easy stuff
• Write a brief summary
• Add information about your business
• Explain your financing needs
• Discuss your repayment plan
• Close the letter

1. Start with the easy stuff

Writing a loan request can feel overwhelming. After all, it’s not an everyday part of being a small-business owner. What do you say when applying for a bank loan? How do you write a business proposal for your loan application? What’s your lender even looking for in a business loan request letter?

That’s why we suggest starting your request writing process with the easy bits: formatting.

You’ll want to begin your business loan request with some pretty standardized formatting that includes your contact information, the date, your lender’s contact information, a subject line, and a greeting.

Typically, you’ll want to format the beginning of your small-business loan request roughly like this:

First and last name

Business’s name

Business’s phone number

Business’s address (this one is optional)

Lender name (or loan agent’s name and title, if you have one)

Contact information for your lender or loan agent

Subject line

Obviously you can simply plug in the relevant information for most of this. Easy peasy, right?

You’ll really only have to come up with your own subject line and greeting. But don’t overthink it. Something like this will work just fine for your subject line:

• Re: [Your business’s name] business loan request for [loan amount]

Likewise, keep your greeting simple. “Dear [lender]” or “Dear [loan agent]” will do quite nicely.

Got all that? Then you’re ready to get into the actual loan request.

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2. Write a brief summary

Before you dive into the meat of your loan request, you should give a brief summary of your letter. Just write a short paragraph that says why you’re writing and what you want.

So you’ll probably want to include the following details:

• Business name
• Business industry
• Desired loan amount
• What you’ll use the loan for

No need to get fancy with this. You’re trying to condense the most important information into one or two sentences.

For example, your summary might look something like this:

• I’m writing to request a [loan amount] loan for my small business in the [industry name] industry, [business name]. With this loan, [business name] would [describe your intended business loan use].

As you can see, you don’t need much detail here. You’re just giving the reader a quick overview of what’s to come.

And now that you’ve given them that preview, it’s time to get more in depth.

Remember, your lender isn’t here to grade your writing. Try to use good spelling, grammar, and punctuation―but don’t stress about crafting beautiful sentences.

3. Add information about your business

Your next section should add more detail about your business. You’ll want to include information like this:

• Business’s legal name (if different than name used)
• Business’s legal structure (LLC, partnership, S corp, sole proprietorship, etc.)
• Business’s purpose
• Business’s age (or date it began operating)
• Annual revenue
• Annual profit (if applicable)
• Number of employees

Now, keep in mind that you’re not trying to give your reader an encyclopedic history of your business. Instead, you’re trying to show that you have a well-established business―one that’s solid enough to deserve a business loan. So focus on relevant details that show your business’s maturity.

You can keep this section as short as a few sentences or as long as a few (brief) paragraphs. Just make sure you leave plenty of room for the next two sections.

4. Explain your financing needs

After discussing your business, it’s time to explain why you need a bank loan.

That means you’ll want to offer some details about how you plan to use your business financing. For example, you can talk about the employees you plan to hire, the building you want to expand, or whatever else you intend to do with your term loan .

Take note, though, that you also need to explain why your loan request makes sense. Because your lender doesn’t really care that you want a loan―it cares whether or not it makes sense to lend to you. You need to convince your lender that you have a good plan for your loan―one that will make it easy to repay the money you borrow.

Try to answer questions like these as you write this section:

• Why should your lender want to approve your loan application?
• What happens to your business if you get your small-business loan?
• What kind of growth will your business loan allow for?

Dig into your business plan and projections to find some good stats. Explain how hiring those additional employees will increase your revenue by a certain percentage or dollar amount. Break down how opening that add-on to your restaurant will allow you to seat a number of additional customers, and how much revenue you expect that to bring in.

The more specific you can get, the better. Because again, you’re trying to convince your lender that you’re borrowing as part of a thoughtful business plan ―not just because you want some cash.

And take your time with this part. In most cases, this section and the next one will form the meat of your business loan request letter. 

As a rule, you should keep your business loan request letter to one page.

5. Discuss your repayment plan

By this point, your lender should understand what your business does and why a loan would help it grow. Now you need to prove to your lender that you can repay your small-business loan.

This doesn’t mean you have to show precise calculations breaking down your desired interest rate and monthly payment. (After all, your bank probably hasn’t even committed to a specific interest rate yet.)

Instead, talk about things like your business’s past finances, other existing debts, and any projections can you offer.

So if you have a profitable business, point that out, and discuss how that will free up cash flow to repay your loan. Offer summaries of profit-and-loss statements that show your business has been growing. Tell your lender how you’ll pay off that existing loan within a few months, so they don’t need to worry about it interfering with repayment of your new term loan.

Put simply, this is your chance to convince your lender of your creditworthiness. Especially if you have a slightly low credit score or some other concern, you want to use this section to show that you will absolutely repay your loan.

6. Close the letter

Finally, you can add a few finishing touches.

Usually you should close with a short paragraph or two that refers the reader to any attached documents (like financial statements) and asks them to review your loan application.

You may also want to include a sentence expressing willingness to answer any questions―or just saying you’re looking forward to hearing back.

Then end things with your signature, list any enclosed documents, and you’re done!

Well, sort of.

At this point, we strongly recommend you print off your business loan request letter and read it―out loud, if possible. This will help you catch any errors. Because no, your lender isn’t a writing teacher, but you still want to make a good impression.

Plus, if you make typos on something like your business name or desired loan amount, that inaccuracy could lead to confusion from your lender―slowing down your loan approval process.

Once you’ve proofread your loan request letter, you’re ready to submit it to your lender. With any luck, your thoughtful letter will help convince your lender to give you that loan you want.

Loan proposal letter template

So how do all those steps look when you put them together? Something like this:

            First and last name

            Business’s name

            Business’s phone number

            Business’s address (this one is optional)

            Date

            Lender name (or loan agent’s name and title, if you have one)

            Contact information for your lender or loan agent

            Subject line

            Greeting

This first paragraph should summarize the rest of your letter. Keep it to just a couple sentences.

The next one to three paragraphs add more detail about your business. Include facts about its age, revenue, profit, employees, and other relevant information.

Then explain why you need financing and how you’ll use it to grow your business. This section can be a little longer (but remember your whole letter  should fit on one page).

Next, talk about how your business will repay your loan. You may want to mention how financial documents show your business’s financial health, for example.

Finally, close with a short paragraph or two that list any enclosed documents and invite the lender to consider your loan application.

Printed name

List of enclosed financial documents

That’s not so hard, is it? With this basic business loan request letter template, you can easily write your own personalized business loan proposal.

The takeaway

So there you have it―that’s how to properly write a business loan request.

Get your formatting right, include a short summary, talk about your business, explain your loan needs, prove you can repay your loan, and close things off. (And don’t forget to proofread.)

We believe in you. You can write this thing.

And good luck getting your loan application approved!

Don’t just tell your lender you can repay your business loan―make sure you can with our business loan calculator .

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How To Apply for a Personal Loan

Before you apply for a personal loan, apply for a personal loan, alternatives to a personal loan, the bottom line.

• Personal Loans

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

• Personal Loan: Definition, Types, and How to Get One
• Different Loan Types
• Unsecured Loans
• Signature Loans
• Peer-to-Peer Lending
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• Personal Loan Calculator
• Tax Implications
• Income Considerations
• Personal Loans and Bankruptcy
• Transferring Personal Loans
• Personal Loans and Credit Scores
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• Best Small Personal Loans
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• Personal Loans vs. Credit Cards
• Personal Loans vs. Car Loans
• Car Title Loan Alternatives

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A personal loan can help you finance a wide range of expenses, such as unexpected expenses, debt consolidation, or large purchases like a new appliance or vacation.

Applying for a personal loan may seem intimidating, but it's fairly straightforward. Let's walk through the key steps for how to apply for a personal loan as well as actions you can take ahead of time to make the process go more smoothly.

Key Takeaways

• Determine how much money you need and the amount of monthly payments you can afford to pay so you avoid borrowing too much.
• Check your credit score and credit report to understand how lenders will view you as a borrower.
• Research lenders and then get pre-qualified to narrow your personal loan choices.
• Gather copies of required documents to save time.

When you apply for a personal loan from any lender, you’ll likely go through each of these key steps, which we review in more detail below:

• Determine how much you need : Is the loan for a home improvement ? A vacation? To consolidate debt ? Whatever the need, be sure you understand how much you need, as a first step.
• Review your finances : With an amount in mind, look at your financial situation. Can your budget support another monthly payment? How is your credit score?
• Research and compare lenders : Lender options are limitless. Narrow your options by starting with your current bank and researching lender reviews , including those from Investopedia.
• Pre-qualify : Most lenders will allow you to pre-qualify—without damaging your credit score. Go through the process with at least three lenders to review rates, terms, fees, and estimated payment amounts.
• Apply : Once you've selected a lender, complete a formal application.

Most loan applications take only a few minutes to complete (and funding can arrive the next day—or sooner). But the process before you apply can take a little longer.

Determine How Much You Need

Consider why you're applying for a personal loan and estimate how much you'll need to borrow. This is a key step in getting a personal loan. You can borrow between $250 and $100,000, so honing in on an appropriate amount will prevent you from borrowing more than you need. Later in the process, this information can help you narrow your options because permitted loan amounts and interest rates vary by lender.

Review Your Finances

Assess your finances to figure out what you can afford before you apply for the loan. Review your income and expenses to understand your budget , or how much money you have coming in and going out each month. Can your budget handle another monthly payment? How much can you comfortably add?

Check your credit score , too, because it will play a role in your loan eligibility and interest rate. Higher credit scores improve your odds of approval and allow you to qualify for lower rates. If your credit score is lower than you expected, review your credit report to see whether it includes errors that need to be disputed.

Research and Compare Lenders

Shop around with banks, credit unions, and online lenders to compare loan amounts, interest rates, terms, and fees. Review loan requirements, if they're available. For example, some lenders have a minimum credit score, income, or loan amount requirement, or only offer loans in certain states.

Read personal loan and lender reviews and ratings to help you zero in on the best personal loan lenders , and then rank your top choices. Interest rate is always a key consideration, but many borrowers say they are most satisfied when they work with a lender whose products, such as credit cards, savings accounts, and other types of loans, they already have, according to J.D. Power.

J.D. Power, an industry intelligence research firm, also found that, in the current climate of high interest rates, customer satisfaction with consumer loans is highest among those with the greatest levels of financial health and significantly lower among those who are overextended or financially vulnerable.

Lenders that ask for an upfront fee or that guarantee approval are often scammers.

Pre-Qualify

Most lenders offer pre-qualification that allows you to view the loan terms you are likely to be approved for. To pre-qualify, you usually only have to enter a minimum amount of information: your personal identifying information, income or employment details, and desired loan amount. The lender will review your information and do a soft credit check , which unlike a hard inquiry that will occur when you officially apply, won't affect your credit. A soft credit check can give you a preliminary decision, but keep in mind it doesn't guarantee you'll get approved.

With the preparation out of the way, and your choice of lender set, you can apply.

Many lenders offer online applications, which are quick and convenient. Some lenders, particularly traditional banks, may require you to apply in person. Either way, the loan application will ask for personal and financial information, like your name, home address, and employment information. You may have to provide additional documents, including your:

• State-issued ID
• Proof of residence
• Income documents, like a bank statement or pay stub

After you submit the application, wait for the results, which may be within minutes or may arrive in a few days. You'll receive a decision faster if your application is complete and free of errors.

If you're approved, the next step for how to apply for a personal loan is to review your final loan documents, then accept and sign them. Your loan documents will include the loan amount, interest rate, repayment term, and monthly payment amount. Within a few days of acceptance, you should receive funds in your bank account or in a check, if you opt for that method of payment.

Loan applications involve a hard credit pull , which can hurt your credit score. If you're shopping around with multiple lenders, your applications will be treated as one credit inquiry if they are made within a 14-day window. That limits damage to your credit score.

Investopedia / Jake Shi

If you need financing for a large expense but don’t want to use a personal loan, you can consider alternative options. Some of them include:

• Credit card installment plan : You can pay off large transactions with fixed payments with a credit card installment plan. If your purchase is eligible, you can select the installment plan option through your online account.
• Home equity loan or line of credit : If you use your home equity as collateral for a loan, you can usually get a lower interest rate. If you have enough equity and good credit, you can borrow a percentage of your home equity, typically no more than 80%.
• Savings-secured loan : You can use your savings account balance as collateral for a loan with a savings-secured loan. These loans are generally fixed-rate loans that may allow you to borrow up to 100% of the amount in your savings account. However, if you can’t afford to repay the loan, you will lose your savings to the lender.
• Family loan : Borrowing from family members can provide funds for your expenses, but this strategy does have downsides to consider. Late payments or unpaid loans can potentially damage your relationship.

How Much Can You Borrow With a Personal Loan?

You can generally take out a personal loan for up to $100,000, but several factors affect the amount you can borrow with a personal loan . Maximum amounts vary by lender and your state. Lenders will consider your credit history, ability to pay, and other factors to determine your loan amount.

How Long Does It Take To Get a Personal Loan After You Apply?

It can take several business days to get a personal loan . First, the lender will review and approve your application. You'll have to review and accept the loan agreement . After signing, you could receive your funds the next day or it may take several business days to receive your funds, depending on the lender.

Can You Return a Personal Loan If You Don’t Use It?

Depending on the lender, you may have a limited time to cancel and return a personal loan with no interest or penalty. Otherwise, if your lender doesn't offer the option to return your loan, you can pay it off immediately, although you may be subject to interest and prepayment penalties .

Does Your Credit Score Go Up After Paying Off a Personal Loan?

The impact on your credit score of paying off a personal loan depends on the information in your credit history. Your credit score may drop after paying off a personal loan if you don't have any other open installment loans on your credit report because it will affect your credit mix.

When preparing to apply for a personal loan, figure out how much money you need and the amount of monthly payments you can afford so you avoid taking out too large a loan. Next, check your credit score and credit report to understand how lenders will view you as a borrower.

Research lenders and get pre-qualified to narrow your lender choices. Finally, pull together copies of required documents to save time when you start applying to get a personal loan. Many lenders offer online applications, which are quick and convenient.

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Biden Cancels Billions in Student Loan Debt, a Centerpiece of His Campaign

The announcement applied to 160,000 borrowers and brings the total debt canceled by the administration to $167 billion.

By Zach Montague

Reporting from Washington

President Biden announced another round of student loan forgiveness on Wednesday, canceling $7.7 billion in debt for 160,000 people in what has become a centerpiece of his campaign for re-election.

The announcement builds on Mr. Biden’s strategy of chipping away at college debt by refining existing programs, even as his administration pursues an even larger plan over the opposition of Republicans.

Many borrowers in this round of forgiveness, who qualified through public service loan forgiveness , the president’s SAVE plan or another income-driven repayment plan, have already begun receiving emails notifying them of their approvals, the Education Department said in a statement.

The Biden administration has now canceled about $167 billion in loans for 4.75 million borrowers, or roughly one in 10 federal loan holders. The president has set forward a much bigger goal : forgiving debt for nearly 30 million borrowers as soon as this fall. But the broader program is still being finalized and could fall victim to legal challenges, as Mr. Biden’s first, far more ambitious attempt at mass debt cancellation did.

Forgiving student loan debt is a key part of Mr. Biden’s outreach to the younger voters who overwhelmingly supported him in 2020 but have shown signs of drifting away.

“From Day 1 of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” the president said in a statement.

To keep the loan forgiveness rolling despite court challenges, the Biden administration has in many cases overhauled or made better use of programs that were already on the books.

In some cases, borrowers discovered that their monthly payments had been miscalculated, often for higher amounts than they actually owed.

Of the total announced on Wednesday, $5.2 billion in forgiveness went to about 66,900 borrowers who qualified through adjustments that the Education Department made to the Public Service Loan Forgiveness program, which aids teachers, firefighters, and other government and nonprofit workers.

Congress created the public service program in 2007, but it was plagued by poor coordination between the department and loan servicers which meant that an overwhelming share of applicants were denied for more than a decade . When Mr. Biden came into office, only 7,000 people who applied for relief through program had been approved, administration officials have said.

About $600 million in relief will go to around 54,300 borrowers who are enrolled in the SAVE plan, which ties monthly payments to income and household size, and who took out smaller loans for graduate school. All borrowers enrolled in the plan can receive forgiveness after 25 years at the most, but borrowers who took out $12,000 in loans or less can qualify after 10 years of payments.

An additional 39,200 borrowers enrolled in other income-driven repayment plans also had $1.9 billion forgiven through “administrative adjustments” to the number of payments they owed. The department said those adjustments were largely to correct a misuse of forbearance by certain loan servicers.

The department has also leaned on other methods to extend debt cancellation, including discharging loans held by students who the department found were defrauded by their schools. Just this month, for example, the department forgave the federal loans of the 317,000 people who attended the Art Institutes .

The much larger part of the strategy — which involves forgiving runaway interest on loans that grew far beyond the original amount borrowed — is still pending, as the administration works to approve new rules. The administration has said more than 25 million people could qualify for relief under those regulations.

Zach Montague is based in Washington. He covers breaking news and developments around the district. More about Zach Montague

Inside the Biden Administration

Here’s the latest news and analysis from washington..

War in Ukraine:  President Biden barred Ukraine from firing U.S. weapons into Russia to “avoid World War III.” After a sobering trip to Kyiv, Secretary of State Antony Blinken wants to ease that rule .

Live Nation:  The Justice Department is suing Live Nation Entertainment , the owner of Ticketmaster, asking a court to break up the company over claims it illegally maintained a monopoly in the live entertainment industry.

Relations With Kenya:  During the Kenyan president’s state visit , Biden will designate the East African nation as a “major non-NATO ally.”

Hidden Fees:  Biden’s effort to crack down on “junk fees”  from airlines and credit-card companies is doubling as a war against inflation.

Student Loans:  Biden announced the cancellation of another $7.7 billion in student loans , building on his strategy of chipping away at college debt by tweaking existing programs.

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Statement from President Joe   Biden on $7.7 Billion in Student Debt Cancellation for 160,000   Borrowers

Today, my Administration is canceling student debt for 160,000 more people, bringing the total number of Americans who have benefitted from our debt relief actions to 4.75 million. Each of those borrowers has received an average of over $35,000 in debt cancellation. These 160,000 additional borrowers are people enrolled in my Administration’s SAVE Plan; are public service workers like teachers, nurses, or law enforcement officials; or are borrowers who were approved for relief because of fixes we made to Income-Driven Repayment. 

Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years. That includes providing the largest increases to the maximum Pell Grant in over a decade; fixing Public Service Loan Forgiveness so teachers, nurses, police officers, and other public service workers get the relief they are entitled to under the law; and holding colleges accountable for taking advantage of students and families. And last month, I laid out my Administration’s new plans that would cancel student debt for more than 30 million Americans when combined with everything we’ve done so far. 

From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt – no matter how many times Republican elected officials try to stop us.

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We'll be in touch with the latest information on how President Biden and his administration are working for the American people, as well as ways you can get involved and help our country build back better.

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Understanding loan forgiveness options

How to qualify for student loan forgiveness, your guide to student loan forgiveness.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate student loans to write unbiased product reviews.

• You can't get forgiveness with private student loans, unlike with federal ones.
• Certain federal student loan holders are eligible for forgiveness, such as nurses and teachers who meet specific requirements.
• Income-driven repayment plans offer forgiveness for a remaining balance after the payment term is up.

Public Service Loan Forgiveness (PSLF)  

Public Service Loan Forgiveness is a loan forgiveness program meant for those working in certain government or not-for-profit organizations. PSLF will be applied to the remaining balance that eligible borrowers have on their Direct Loans. Eligibility kicks in if you're working full-time for an eligible employer, and after the equivalent of 120 qualifying monthly payments have been made.

Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness program is designed for educators who don't have an outstanding balance on Direct Loans or Federal Family Education Loan Program (FFELP) loans, have been employed full-time for five consecutive academic years, have been employed at an elementary or secondary school, or educational agency serving low-income students, and lastly, the loans you're seeking forgiveness for must be from your minimum of five years of teaching.

Income-Driven Repayment (IDR) Forgiveness

An IDR plan restructures and bases your monthly student loan payment on your income and the size of your family, with the goal of setting up lower monthly payments. Under an IDR plan, at the end of your repayment term, any remaining balance will be forgiven.

Nurse Corps Loan Repayment Program

The Nurse Corps Loan Repayment Program (NCLRP) forgives educational debt for registered nurses, advanced practice registered nurses, and nurse faculty members.

Those who receive an award must have worked for at least two years in a critical shortage facility, or an eligible nursing school as a faculty member.

Perkins Loan cancellation and discharge

If you're an educator with a Federal Perkins Loan, it's possible to get 100% of your loan canceled incrementally. The following jobs are eligible for loan cancellation, under certain conditions:

• Elementary or secondary school teachers
• Special education teachers
• Preschool or Pre-K teachers
• Other educators
• Law enforcement
• First responders
• Nonprofit workers
• Those in the Military
• Health care workers
• Those who work with people with disabilities.

You may be eligible to get your Perkins Loan discharged if you've gone through any of the following life events:

• Certain types of bankruptcy
• School closure before you completing your program of study
• Total and permanent disability

Understand the specific requirements of each program

Every loan forgiveness program is different, and set up for different borrowers in different situations. Compare your options to identify your strongest chance for loan forgiveness.

Verify your loan eligibility

Even if you are in an eligible role for any of these forgiveness program, that doesn't mean the type of loan you have is eligible for loan forgiveness. 

Stay on top of your payments

For certain programs, such as IDR and PSLF, you are only eligible for loan forgiveness if you're up to date on your payments and your account is in good standing. 

Keep accurate records

To prepare your application and any questions the lenders may have, be sure to have all important documents on hand. That includes your employment verification, social security information, and other personal credentials. It also means keeping a record of your paystubs, payment history, and other relevant documents.

No, not all student loans are eligible for all programs. Be sure to check program details carefully.

The limit on how much student loan debt can be forgiven is entirely dependent on the program. PSLF, for example, may forgive the entire remaining balance.

Generally speaking, you have to pay taxes on forgiven student loans. Consult a tax advisor for specific details.

Private student loans are rarely forgiven, unless otherwise handled through specific employer programs. Most forgiveness is for federal loans.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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How to start a candle business in 2024: 5 easy steps to selling candles from the comfort of your home

Starting a candle business can be an excellent source of additional income.

Small business owners fear they won't survive a second Biden term

Katlyn Swaffer and Maher Youssef explain how their small businesses have been affected by inflation and call on President Biden to address the issue.

Americans are rapidly working on side hustles as an additional source of income.

Fifty-four percent of Americans have begun a side hustle in the last twelve months, according to MarketWatch, as a means of making more money in addition to a primary source of income. 

All you really need to start a side hustle is an idea and an understanding of how to execute that idea. Taking a creative approach to your entrepreneurship can include a hobby-like business, and one of the more popular ones today is candle making.

Whether you have made a candle before or not, through trial and error, there are simple tricks to producing a product that is unique from what else is on the market.

One side hustle that can bring you extra income is a candle business. You can begin the business at home, selling online and at local craft fairs.  (David Crane/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)

WANT TO MAKE MONEY OFF YOUR FLOURISHING GARDEN? HERE ARE 4 WAYS TO TURN YOUR CROPS INTO CASH 

You can make candles in your own home pretty easily. Here's a guide to get you started on your candle business. 

• Learn how to make candles from home
• Come up with a brand name, logo and label for your candles
• Write a business plan
• Register your business
• Decide how you are going to sell and get your business going

1. Learn how to make candles from home

The first step to starting your business is learning how to make candles. You'll need minimal supplies to get you started, including containers for your candles, wax, wicks and fragrance. 

It will take trial and error to perfect the look of your candle, the wick placement and the amount of fragrance you need for the perfect scent. If you want to add color to your candle, you'll also need to purchase dye. 

At first, the top of your candle may not appear totally smooth, your wick may be crooked, or you may not have enough fragrance for the scent. 

Practice makes perfect. The more candles you make, the better you'll get and the quicker you'll be ready to sell.  (Creative Touch Imaging Ltd./NurPhoto via Getty Images / Getty Images)

All the candles you make during your trial and error period can be gifts for friends and family because they probably won't be good enough to sell.

You could also buy wax molds to add uniqueness to your candles. 

TIPS FOR SELLING EGGS AND TURNING A PROFIT RIGHT FROM YOUR BACKYARD 

Once you have made numerous candles with success, you're ready to move to step two. 

2. Come up with a brand name, logo and label for your candles

You will need a unique brand name and logo for your business and a label for your candles. 

Your brand name should be something unique and memorable. You'll also want to create a logo for your business and a label to put on each of your candles. 

On each candle should be your brand name/logo as well as information about the candle itself, like the scent, instructions and safety information. 

3. Write a business plan

All businesses start out with a plan. 

A business plan is a document that describes the company and also highlights its goals. 

In a business plan, you can include elements like the mission statement, the products offered, the target audience of the company, marketing plans and financial information. 

HOW TO START A LEMONADE STAND WITH YOUR KIDS THIS SUMMER 

Your business plan is by no means set in stone. As your company grows and changes, your plan will, too. You can always make edits to your business plan when needed. 

4. Register your business

To run a business, you'll need to register it. The process varies depending on your state, so you'll need to look into the legal requirements where you live to avoid getting fined or having your business shut down. 

Once your business is registered, you'll receive an Employer Identification Number (EIN). This number is given to businesses for tax purposes.  

Also, make sure you obtain any necessary business licenses or permits in the state to legally operate your business. 

You'll want to have all these legal steps taken care of before you start selling candles. 

Make sure to have the scent of the candle and the name of your business clearly displayed on each container.  (David Crane/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)

5. Decide how you are going to sell and get your business going

Now, it's time to officially launch your business. 

You will need to determine a price for your candles. According to Forbes, you'll want to aim for a 25% to 50% profit margin, so keep that in mind when you are considering how much to charge. 

You should create a website for your business with your contact information for customers to reach out to you. You can also sell your candles through your own website. 

Another way to sell is through an online marketplace like Etsy. 

GET FOX BUSINESS ON THE GO BY CLICKING HERE 

It's also a good idea to start social media channels for your business. Include high-quality pictures of your product on these channels. 

Social media is not only a great way to market your business, but another way you can sell your candles. 

During the warmer months, consider buying a booth at a local craft fair to sell your products. This is a great way to spend some time outside while also speaking directly with customers.