Log in or select an account:
Select your account type
Log In for Commerce Connections®
Log In for Small Business Bill Pay Log In for ClientLine Reporting Log In for Global Gateway Virtual Terminal Log In for ClientLine Merchant Login Log In for Capital Markets Access Log In for SmartPay Business
Search
Find a Branch or ATM Contact Us
Print this page
January 08, 2020
The short answer is yes.
Approximately 80-90% of startups fail, so banks take on higher-than-average risk when they lend to new companies. To manage that risk, the bar for loan approval is often higher than it might be for established companies. Also, banks usually require startups to secure loans guaranteed by the Small Business Administration, whose lending guidelines tend to weed out candidates who might have a high risk of defaulting.
So yes, banks do make loans to startups – provided they demonstrate the ability to repay them. Generally, that means:
-
Strong collateral. Lenders expect borrowers to put up something – usually their home or other significant asset. Collateral helps demonstrate that borrowers have “skin in the game” and will not walk away should their business go south.
-
How much collateral is needed? The chances for loan approval are highest when the collateral at least matches the loan amount. The lower the collateral, the lower the chances of approval.
-
At least two months of cash reserves. History is filled with startups that obtained a loan and put the required 10-20% down only to find themselves cash-poor and unable to make regular payments. That’s why it’s essential to have a cushion.
The SBA and its partner banks want to see enough money in your accounts to cover loan payments for at least two months. And they will expect to see these funds on your bank statements two months before you apply for the loan.
An experienced SBA lender can share more tips like these to help improve your chances of financing success. So plan ahead – and seek advice from your banker.
Also See:
What should I do before applying for a loan?
Estimating start-up costs
About Us
- About Us Overview
- Corporate Social Responsibility
- Investor Relations
- Media Center
Careers
- Careers Overview
- How to Join Our Team
- Our Hiring Process
- Why Commerce
- Search All Jobs
Security Center
- Security Overview
- Privacy Statement
- Security Practices
- Cardholder Security
Other Links
- Contact Us
- Locations
- Challenge Accepted.®
- Website Accessibility
- Site Map
You are now leaving the Commerce Bank website.
By clicking the "I Agree" button below, you acknowledge and agree to the following:
You will leave the Commerce Bank website and enter a third party social media/collaboration website. The information shared on Facebook.com is not the responsibility of Commerce Bank and we are not responsible for the content shared between users and participants on the site. Please note that Facebook.com may have its own privacy and security policies which differ from those of Commerce Bank.
Never share your personal information on Facebook.
You are now leaving the Commerce Bank website.
By clicking the "I Agree" button below, you acknowledge and agree to the following:
You will leave the Commerce Bank website and enter a third party social media/collaboration website. The information shared on Twitter.com is not the responsibility of Commerce Bank and we are not responsible for the content shared between users and participants on the site. Please note that Twitter.com may have its own privacy and security policies which differ from those of Commerce Bank.
Never share your personal information on Twitter.
You are now leaving the Commerce Bank website.
By clicking the "I Agree" button below, you acknowledge and agree to the following:
You will leave the Commerce Bank website and enter a third party social media/collaboration website. The information shared on LinkedIn.com is not the responsibility of Commerce Bank and we are not responsible for the content shared between users and participants on the site. Please note that LinkedIn.com may have its own privacy and security policies which differ from those of Commerce Bank.
Never share your personal information on LinkedIn.
You are now leaving the Commerce Bank website.
By clicking the "I Agree" button below, you acknowledge and agree to the following:
You will leave the Commerce Bank website and enter a third party social media/collaboration website. The information shared on Instagram.com is not the responsibility of Commerce Bank and we are not responsible for the content shared between users and participants on the site. Please note that Instagram.com may have its own privacy and security policies which differ from those of Commerce Bank.
Never share your personal information on Instagram.
Learn more about Commerce Bank
Privacy Statement | | En Español
Copyright © 2024 Commerce Bancshares, Inc. All rights reserved. Commerce Bank, Member FDIC.
