Getting a loan for your business—especially if you’re running a side hustle—can feel like climbing a steep hill. The truth is, lenders want to see proof that you’re serious, financially stable, and capable of paying them back. That’s why preparation matters. Whether you’re applying for unsecured business loans, exploring revenue based financing, or even checking repayment terms with an MCA calculator, improving your odds of approval is all about strategy.
The good news? You don’t need a massive business empire to get started. With the right steps, even a side hustler can look like a trustworthy borrower. Let’s dive into nine sections that show you exactly how to do it.
Clean Up Your Credit Before You Apply
Your personal and business credit history is one of the first things lenders look at. Even if you’re applying for unsecured business loans, your credit score acts like a financial snapshot that shows how well you handle debt. A strong credit profile tells lenders you’re responsible.
To improve your odds, start by pulling your credit report and checking for errors. Dispute anything that looks inaccurate. Then, pay down existing debts where you can, and avoid maxing out your credit cards. Over time, even small positive moves add up.
Pro Tip: Think of your credit score like your business reputation—tidy it up before you show it off.
Document Your Side Hustle’s Income
Lenders don’t just care about how much money you make; they want to see consistent cash flow. This is where your documentation matters. Even if you’re not a full-time business owner, tracking your earnings is crucial.
Keep records of invoices, bank deposits, or sales receipts. If you’re already reinvesting profits, that’s worth noting, too. Some lenders even offer revenue based financing, which ties your repayment amounts directly to your sales. This means your documentation is even more valuable—it becomes your proof that your side hustle generates real, recurring revenue.
If you need help deciding how to track income, check out this helpful guide on cash vs. accrual accounting. It explains how different accounting methods affect your financing options.
Separate Business and Personal Finances
Mixing personal and business finances is a big red flag for lenders. If they can’t clearly see your business activity, they’ll likely reject your application. The fix? Create a dedicated business bank account—even if your “business” is just a side hustle.
This step shows lenders that you take your venture seriously. Plus, it makes your life easier at tax time. A business account helps you keep revenue and expenses organized, which directly strengthens your case for approval.
It also positions you better for other funding options, like merchant cash advance funding. These products often require clear records of revenue, and a separate account makes that simple to provide.
Build a Clear Business Plan
Even a side hustle benefits from a roadmap. A business plan outlines your goals, strategies, and how you’ll use the loan. Lenders want to know their money is fueling growth—not covering random expenses.
Keep it simple but detailed enough to show you’ve thought things through. Highlight your target market, your growth strategy, and exactly how much capital you need. For example, instead of saying “I need $20,000,” say, “I need $20,000 to buy equipment that will double production.”
If you’re unsure which loan option fits your goals, check out this resource on choosing between secured and unsecured financing. It breaks down which route may align better with your situation.
Start with Smaller Loan Products
Jumping straight into large loans can be risky, especially if you don’t yet have a long credit history. Instead, consider starting with smaller products, like a line of credit or a microloan. Successfully managing these can build trust with lenders.
This strategy also applies when working with a business loan broker. Brokers often recommend starting small, then scaling up as your business proves its repayment ability. Think of it as building credibility step by step.
Some entrepreneurs also explore tools like an MCA calculator to understand repayment timelines before committing. Using calculators shows you’re proactive and prepared, which lenders appreciate.
Work with a Business Loan Broker
Navigating the lending world can feel overwhelming. That’s where a business loan broker comes in. A broker connects you with lenders that are most likely to approve your application, based on your profile.
They can also save you time by cutting through the noise. Instead of applying to five lenders and getting denied, a broker helps you target lenders that match your business type, revenue level, and goals. While there might be fees involved, the higher chance of approval often outweighs the cost.
For more insights, take a look at this blog on small business loans made simple. It explains how to compare loans and pick the best fit without feeling overwhelmed.
Highlight Business Credit (Even for Side Hustlers)
Did you know you can build business credit even if your company is just a one-person show? Opening accounts with vendors, applying for a business credit card, or securing a small line of credit all contribute to your business credit profile.
Over time, this history makes lenders more comfortable approving bigger loans. And with better credit, you may qualify for more affordable options like unsecured business loans rather than higher-cost alternatives.
If you’re new to business credit, check out this resource on building and leveraging eCommerce business credit. Even side hustlers can apply these tips.
Compare Multiple Funding Options
Not all loans are created equal. Before you apply, take time to compare different products. For example:
Loan Type | Best For | Approval Speed | Flexibility | Risk Level |
Unsecured Business Loans | General business use | Moderate | High | Medium |
Revenue Based Financing | Businesses with fluctuating income | Fast | Very flexible | Medium |
Merchant Cash Advance Funding | Short-term needs | Very fast | Medium | High |
Lines of Credit | Ongoing expenses | Fast | High | Low-Medium |
Using tools like an MCA calculator can help you understand the true cost of products like merchant cash advances. By comparing before committing, you’ll avoid surprises and increase your chances of picking a loan you can actually manage.
Show Professionalism in Every Interaction
Finally, never underestimate the power of professionalism. From your first email to your final document submission, the way you present yourself matters. Respond promptly, stay organized, and provide what lenders ask for without delay.
Professionalism reassures lenders that you’ll treat repayment with the same respect. Whether you’re a full-time entrepreneur or a part-time hustler, this credibility can tip the scales in your favor.
FAQs
Q1: What’s the easiest loan to qualify for as a side hustler?
Many side hustlers find revenue based financing or merchant cash advance funding easier to qualify for because approval is tied to sales, not just credit.
Q2: Do I need collateral for unsecured business loans?
No. Unsecured business loans don’t require collateral, but lenders often expect a stronger credit score or higher interest rates in return.
Q3: How can an MCA calculator help me?
An MCA calculator helps you estimate repayment amounts and timelines for merchant cash advance products, so you don’t commit without knowing the real cost.
Q4: Should I work with a business loan broker?
Yes—especially if you’re new to business loans. A business loan broker can guide you toward lenders who are more likely to approve your application.
Final Thoughts
Strengthening your odds of loan approval isn’t about luck—it’s about preparation. Whether you’re organizing records, separating finances, or using tools like an MCA calculator, each small step builds trust with lenders. Even as a side hustler, you can qualify for serious funding if you present yourself strategically.
Remember: every big business started small. Take these steps, stay consistent, and your side hustle can get the funding it needs to grow.
