5 min read · Applications
Before a lender reads your financials, it reads one paragraph: what the money is for. It is the cheapest thing in your file to get right, and the one most owners write in a single line.
What the Federal Reserve found
These are from the Federal Reserve Banks' 2025 Small Business Credit Survey of employer firms. It is not a random sample, so use it as a guide and not as a forecast for your business. The point it makes is simple: roughly half of applicants do not get everything they ask for. Part of the work is making the request easy to say yes to.
Invert it: what makes a lender stop reading
- ◆You write "working capital" and stop. It answers none of the lender's questions.
- ◆The numbers do not add up. If the lines and the request disagree, the file slows down.
- ◆A personal line is tucked in. Personal bills, personal debt and household costs cannot be part of a business-purpose loan.
- ◆There is no payback source. The lender has to see which money pays the loan back.
- ◆The product does not fit the use. A short loan for a building, or a long one for inventory, strains the payment.
The three questions your paragraph answers
- 1
What does the money pay for?
Name each use. Equipment, inventory, a hire, a build-out.
- 2
How much for each thing?
One line per use, with an amount. The lines add up to the request, to the dollar.
- 3
How does it pay back?
Name the source. Customer payments, a contract, rent saved, a sale.
A hypothetical example
Hypothetical request of $60,000: $38,000 to buy a used delivery van (quote attached), $14,000 for first-quarter inventory, and $8,000 for a new hire's first two months. It pays back from customer payments on the five new routes the van allows. Three uses, three amounts, one source. A lender can follow that in ten seconds.
Every dollar has to serve the business
A business vehicle or an investment property can be a business use. Anything for your own home, a personal car or household bills cannot. If a use is in doubt, take it out before the lender finds it.
What to have ready
- ◆Quotes or invoices for equipment and inventory.
- ◆A payroll plan or hiring offers.
- ◆A marketing budget or agency proposal, by month.
- ◆A statement of any business debt being refinanced, and what that saves.
- ◆A signed business-purpose certification.
The plain version
One paragraph. Each use, each amount, one payback source, all for the business. Write it before you apply, and ask any lender which of your uses it funds and which it does not. We are a broker, and the lender decides.
Run the numbers
Free, no credit pull, no obligation. See the math before you talk to anyone.