What Do Banks Require fora Business Loan? - 5 Criteria you Need to Know

🧠 Why It Is Important to Prepare Properly

Banks review every business loan application with strict banking criteria. A well-designed business plan and a full understanding of the bank’s requirements can significantly increase the chances of approval.

✅ 1. Financial Viability and Liquidity

Banks want to know if your business can generate profit and repay loan obligations. They will examine:

  • Turnover and net profits from previous years
  • Cash flows
  • Obligations to third parties (debts, loans, taxes)

🔢 Indicative Income – Expense Table (3 years)

Year Income (€) Expenses (€) Net Profit (€)
2022 120,000 85,000 35,000
2023 140,000 90,000 50,000
2024 160,000 100,000 60,000

✅ 2. Business Plan

Necessary to justify the loan. The plan should include:

  • SWOT analysis (strengths, weaknesses, opportunities, threats)
  • Marketing & sales strategy
  • Development plan
  • Loan repayment timeline

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✅ 3. Personal and Business History

The entrepreneur’s experience, creditworthiness, and tax status matter. Banks examine:

  • Credit rating (Teiresias)
  • Industry experience
  • Legal form and business consistency

✅ 4. Collaterals & Guarantees

Depending on the amount, the following may be requested:

  • Real estate collateral
  • Personal guarantees
  • Business assets (equipment, vehicles)

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✅ 5. Use of Capital & Realism

The loan amount must be documented and proportional to the plan:

  • Detailed expense breakdown (equipment, personnel, rent)
  • Implementation timeline
  • Return on investment (ROI)

🔍 Featured Snippet Answer :

What do banks examine for a business loan?

  1. Financial stability & cash flow
  2. Business plan with forecasts
  3. Entrepreneur profile & creditworthiness
  4. Guarantees or collateral
  5. Realistic use of the loan

❓ Frequently Asked Questions (FAQ)

What do banks examine for a business loan?
Banks check the business viability, cash flows, business plan, guarantees, and the entrepreneur’s financial status.

Is a business plan required for a bank loan?
Yes, it is essential to justify the loan need and repayment ability.

What is the minimum amount for a business loan?
It depends on the bank and program, but often starts from €10,000.

🏁 Conclusion

Applying for a business loan requires serious preparation. At MegaProfit.gr we undertake the preparation of a complete file with all the necessary elements requested by the bank, increasing the chances of approval.

📞 Request a free evaluation today or visit our service for Business Plan for Loans.