Understanding Business Loans


Getting a business loan can be intimidating, especially for first time owners. Cultivate sat down with Vinton County National Bank to get you the answers to questions you might be hesitant to ask. 

Topics include: 

  • How is the loan process different at a community bank versus one of the giant banking institutions? 
  • How much of the final loan decision is computerized versus considered by actual bankers that discuss the loan together after reviewing all of the financial details?
  • How many years in business are usually needed to get a business loan and why? 
  • How does the type of loan matter for the use of the loan funds, such as if I’m trying to get a loan to purchase a commercial property versus trying to get a loan to renovate a leased space?
  • What are you looking at in the business and personal tax returns? Are you looking at a few key numbers or digging deep? For instance, are you looking at things like depreciation that is reducing net income but doesn’t impact cash or principal payments that impact cash but not net income?
  • What are the key metrics that a bank is looking at to evaluate capacity to repay the loan?
  • Generally speaking are these metrics less stringent on an sba vs bank loan 
  • What are the differences between a loan from your bank versus an SBA 7a loan or an SBA 504 loan?
  • What do you think are some of the more unexpected parts of the loan process for a small business that is doing this for the first time? 
  • How long does the loan process usually take? How is that different with an SBA loan?
  • Why do banks usually insist on maintaining accounts? Is it more than just the fees and income they earn from deposits?
  • How do banks use your credit score when determining if they will give a business loan? What difference does a 650 versus a 750 or 800+ make? What does this really tell you?
  • What is a personal financial worksheet and why is it important?

Click here for business funding assistance and a free advisory consultation, and find Vinton County National Bank here.