Every business requires capital to run. If you have an established business and are looking to expand, obtaining commercial financing can help your business grow. Some may be just getting started and need an initial investment for large equipment or day-to-day expenses. Others may be looking to invest in commercial real estate.

Although some entrepreneurs can turn to investors — or their rich uncle’s pockets — most small business owners will need to apply for commercial financing at some point. Before you start interviewing loan companies, it’s important to follow some basic guidelines.

Start The Process Early

You don’t want to be waiting on a lender before you can move your business forward. Shopping around for commercial financing may take months, so it’s important to start planning long before you think you might need to apply for a loan. Find all of the necessary paperwork, get your files in order and keep your sales projections up to date. Create a financial packet, including tax returns that you file annually, and be sure your current year’s financials are up to date. Be prepared for lenders to dig deep into your financial history. They won’t just look at the business side; your personal history and credit will also be reviewed.

Decide How Much You Need

Look through your business plan and determine your needs. What are your growth goals? What are your expectations for your business from the time you open? Answering these kinds of questions will help you determine exactly how much to apply for and which institution can provide you with the best options for commercial financing. Remember, asking for too little could lead to problems with a lack of working capital, while asking for too much may make lenders question your credibility. Putting together a well-thought-out budget is crucial.

Consult People With Experience

Meet with others who are familiar with the process. Bankers may have behind-the-scenes knowledge that could come in handy, while attorneys and CPAs and other business owners may also be able to provide some valuable insight. Consider using a loan broker or loan placement specialist to help you navigate the complicated commercial loan financing process. You don’t want to go it alone.

‘It Depends’

Once it’s time to apply for commercial financing, keep in mind that the answer to most of your questions will be, “It depends.” All businesses are different, and the model or type of loan that works for some may not necessarily work for others. It’s all about finding the right funding solution for your own specific business needs.

Be sure to do your homework and talk to a qualified commercial loan financing professional. The process doesn’t have to be scary if you have the right expertise on your side.