Understanding your audience is helpful regardless of the situation.
When you're applying for a loan, you're not just submitting paperwork — you're making a case for your business. Understanding how lenders think can give you an edge and help you present a stronger, more complete application.
At Craft3, we look beyond the numbers. And while every lender is different, most want answers to a few core questions.
Lenders Want to Be Repaid — Plain and Simple
It might seem obvious, but it’s the foundation of any loan decision. Lenders need to feel confident that you can repay the loan — and that you’ve thought through how that will happen.
They’ll look for:
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A clear and realistic repayment plan
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Financial projections grounded in actual performance or reasonable assumptions
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A margin for error — because things don’t always go according to plan
💡 Pro tip: Be prepared to explain your assumptions and show how you’ll adapt if things change.
Financial statements don’t have to be intimidating.
Our guide, Understanding and Using Financial Statements for Your Business, breaks down the essentials — balance sheets, income statements, and cash flow — in plain language.
Learn how to read your numbers, spot trends, and use financial insights to make smarter business decisions (and impress your lender while you're at it).
Lenders Want to See That You’re Personally Invested
Commitment counts. Lenders want to know that you're all-in.
They may ask:
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How have you funded the business so far?
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Have you invested your own money, time, or assets?
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Are you willing to share in the risk through a personal guarantee or collateral?
Showing a personal stake in your company signals that you believe in your business — and that you’ll work hard to make it succeed.
Craft3 can do deals with little collateral, but a willingness to offer personal assets as collateral indicates a confidence in your business that will likely instill confidence in a lender.
Lenders Want to Understand You
Your skills. Your drive. Your experience. It all matters.
A strong business idea is only as good as the person behind it. Lenders will want to know:
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What have you done before starting this business?
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What relevant skills have you developed?
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Have you overcome obstacles or setbacks — and what did you learn?
They’re also evaluating your ability to run a business:
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Can you manage cash flow, operations, and people?
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If you’re still learning, how are you filling in the gaps?
💡 Remember: Your story matters. Persistence, adaptability, and learning go a long way.
OUR CUSTOMERS
“If there’s one thing we’ve learned and want people to take away from our experience it is that for every “No” you hear, there are 100 “Yeses” waiting on the other side. If you stay authentic to who you are, what you stand for, and how you can raise up your community, then the sky can’t even hold your greatness.”
-Daniel, Bonito Café y Mercadito owner
Lenders Want to Understand Credit Challenges in Context
We get it — life happens. A tough year, medical bills, or a personal emergency can affect your credit. At Craft3, we don’t assume bad credit equals bad character.
But all lenders will want to know:
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What’s the story behind any credit challenges?
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Are they one-time events or part of a pattern?
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What have you done to rebuild or take control of your finances?
Even if your credit history isn’t perfect, transparency and context can make a big difference.
“As a banker, I often found myself saying, “No,” to good people with good ideas. Craft3, a mission-driven community development financial institution, can take more risks and make loans banks can’t. For example, we’re often able to finance good businesses with “bad” credit, so long as there’s strong business opportunity and plausible explanations for any credit blemishes.”
-Turner Waskom EVP, Chief Lending Officer
Bonus: Lenders Value a Plan for the Loan
Don’t just say how much money you want — show how you’ll use it.
Be specific:
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What will the loan fund?
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How will it help your business grow or stabilize?
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What impact will it have on your revenue or profitability?
💡 A well-articulated plan shows you’re strategic, not just hopeful.
Not sure how to build a clear, compelling plan?
Our guide, Unleash the Potential of Your Business with a Solid Plan, walks you through how to define your goals, connect them to financial needs, and communicate your vision in a way that resonates with lenders — and helps you stay focused as you grow.
Tools and Resources to Help You Get Loan Ready
Thanks for spending time with this resource — and congratulations on taking a meaningful step toward strengthening your business.
This guide is just one piece of the support we offer small business owners. If you're looking for a deeper dive into preparing for financing, check out our comprehensive Definitive Guide to Getting Loan Ready page.
Start with the Basics
- Glossary of Finance and Business Terms Make sense of unfamiliar financial language. You don’t need to talk like a banker — but understanding their terms and mindset can help you communicate more effectively and make smarter decisions.
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Thinking Like a Lender one-pager A printable summary of what you’ve learned here — perfect as a prep checklist or to share with a business partner.
- Definitive Guide to Getting Loan Ready e-book in English or Spanish Our comprehensive guide walks you through everything you need to know to confidently prepare for business financing — from strengthening your financials to telling your business story with impact.
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Subscribe for Business Tips Get practical, actionable advice delivered to your inbox — covering everything from business plans to getting documents together.
When You’re Ready, We’re Here to Help
At Craft3, we specialize in working with entrepreneurs who may not fit the traditional mold — and we believe in second chances and fresh starts.
Take the Next Step
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Explore Craft3’s Business Loan Options Learn how we support small business owners through accessible, flexible financing.
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Submit a Loan Inquiry You can start the loan process by completing our online form. A lender will then follow up with you to schedule a conversation.
About Craft3
Craft3 is nonprofit community lender focused on building a thriving, just, and empowered Pacific Northwest. We support entrepreneurs — especially those that have been denied access to opportunity — by offering responsible capital and tools, like this guide, to support you on your business journey.