For many small businesses, they’re start up and initial success is made or broken by securing a small business loan. These loans allow many to take their business forward in the direction they wish without selling or remortgaging their homes.

Research gathered from small business owners suggests that getting a business loan can be one of the toughest challenges for a new business. However, the following tips to can help you better understand and secure the financing you need:

1. Create a business plan
When you are reaching out to banks for a business loan, always be truthful, and present them with a clear, concise business plan that details your costs and what you will be using the loan for for. Most banks and lenders will not think of loaning money to a business owner without them clearly demonstrating how the money will be used.

2. Look for small business lenders
Not all banks will be willing to cater to a start up business. This is why you should first check to see whether the lender works with businesses of your size, and also business owners in your industry. Only then you should proceed further. The best small business loans can be obtained more successfully if the bank has a history of working in the industry you are in.

3. Check your credit score
Your personal credit score and your business’s credit score often depend on one another. This means you may not get a business loan if you have poor personal credit. First, ensure your credit score is good by verifying it with the credit bureau.

4. Down payment loans
When you are applying for a business loan, the lender may require down payment. In this case, the lender will expect to see that your business is running smoothly and there is incoming cash flow. The lender will require you to be able to make timely monthly payments on any loan and will require proof of positive return on their investment.

5. Research lenders
In order to get the best small business loans, you need the right lender. You must research the lenders available as far as the size of loans, interest rates, and duration of loans they offer. Go with the loan that provides the best terms for you. When you have a good credit score, the lender might decrease the interest rate. So be sure to clear any outstanding debts to get the best loan terms possible.