Small business owners couple

If you run a small business, you know the worry that comes from financial pressure.

No matter how much planning you did before opening or how careful you are with spending now, expenses just seem to crop up for small businesses. They’re especially stressful when you’re trying to turn even a small profit.

First, rest easy knowing that you’re in good company—many small business owners find they need more cash in the early days to keep things running, or even a few years in as they work to grow. And there are a lot of small business owners, with the majority of United States companies having less than 20 employees, according to the Small Business & Entrepreneurship Council (SBEC).

American business is overwhelmingly small business,” the SBEC says.

Second, know that you have the option to get a small business loan to help you keep chugging along. As you prepare to apply for a loan, here are three tips that will help make the process smooth.

Know how much you’ll need

Even if you have a small range in mind, as opposed to an exact number, knowing how much you need before speaking to a loan officer is essential. This may sound obvious, but lenders at Member One Federal Credit Union say many business owners are too vague when applying for a loan, and they end up not being approved because they didn’t have a clear plan.

Ask yourself, what are all the areas of your business that need an infusion of cash? Do you need to cover one-time expenses or ongoing expenses—or both? Be prepared explain exactly how the money will be spent, who will sign for the loan, and your plan for paying it back.

Understand the risks

Taking out a business loan may be more difficult than taking out a personal loan. The paperwork is more extensive, and your lender may require that you put up some type of collateral to guarantee you will pay back the money.

You’ll also need to share revenue projections to show you understand how much money your business can make and that you’re a worthy investment. Additionally, plan on gathering your past tax returns, sales receipts, and other financial records. Having them from the beginning will speed up the loan process and make it more likely that your loan will be approved.

Consider the benefits

If you’ve been funding your business with personal money, your stress level is probably through the roof. Most entrepreneurs invest at least some of their own money during the first few years. However, while business loans usually take longer to secure than personal ones, they will help you disentangle complicated accounting and focus on day-to-day operations and long-term goals instead of thinking about your dwindling savings account.

Taking out a business loan also helps you build credit, an important step to securing future investors and funds. Additionally, many banks and credit unions offer high lending limits and low interest rates for small business loans.

While starting and running a business is hard work, finding the money you need to fund your dreams doesn’t have to be. Member One Federal Credit Union specializes in working with small business owners, so contact one of its loan experts to discuss your specific needs and to see if you qualify.