If you’ve ever applied for a business loan in Chicago, you know how nerve-wracking it can be. With so many factors in play, it can feel like you’re in the dark about what lenders are actually looking for. But understanding the psychology behind lending decisions can help demystify the process and give you the upper hand. Whether you’re navigating traditional loans or considering revenue-based financing, here’s how lenders think—and how you can align your approach for success.

1. Lenders Love Predictability

Let’s face it: lenders aren’t in the business of taking huge risks. In Chicago’s competitive market, where businesses are constantly adapting to new challenges, lenders tend to favor stability and predictability. They want to see a consistent flow of revenue, especially in the months leading up to your application. This isn’t about how high your sales numbers are but about demonstrating that your business has steady, reliable income. If you can show a history of growth or even consistent performance during the slower seasons, you’ll make a much stronger case for your ability to repay.

2. Risk Management Is Key

Lenders see themselves as risk managers. Their goal is to minimize risk while making smart investments. This is why they’ll focus on your business’s financial health. Traditional lenders will analyze your credit score, business history, and financial statements, looking for signs that your business can weather the ups and downs of the market. They’re also keen on your industry, as some sectors are considered riskier than others. However, with revenue-based financing, things work a bit differently. Lenders assess how well your revenue aligns with repayment capacity, but they don’t dive as deep into your credit score. This makes it easier for businesses with strong revenue but less-than-perfect credit to qualify.

3. Lenders Seek Growth Potential

It’s not just about where your business is now—lenders want to know where it’s going. They’re looking for signs that your business has growth potential. In Chicago, where innovation is key to staying competitive, lenders appreciate when you can demonstrate that your business has room to scale. They’ll want to know what steps you’re taking to expand—whether it’s diversifying your product line, expanding into new markets, or leveraging technology to streamline operations. The better you can communicate your growth strategy, the more likely you are to capture a lender’s interest.

4. They Want to See How You Handle Challenges

All businesses face hurdles, but it’s how you handle them that counts. Lenders in Chicago want to see that you can navigate tough situations with confidence and smart decision-making. Whether it’s a market dip, cash flow issue, or an operational challenge, lenders value business owners who demonstrate resilience and adaptability. If you can show them that your business has managed challenges successfully—whether by adjusting pricing strategies, cutting costs, or diversifying revenue streams—they’ll feel more confident about your ability to handle future challenges, especially when they come with unexpected market shifts.

5. The Personal Touch Matters

When it comes to lending decisions, the numbers are important, but so is the personal connection. Lenders want to know the story behind your business—why you started it, what drives you, and how committed you are to its success. In Chicago’s entrepreneurial ecosystem, which thrives on collaboration and networking, building a strong rapport with your lender can go a long way. While revenue-based financing may not require as much of a personal narrative, having a clear and compelling story about your business’s journey can create a sense of trust and shared understanding, making it easier for lenders to align with your vision.

Understanding the psychology of lending can help you craft a more compelling case for your business. By demonstrating predictability, managing risk, showing growth potential, and highlighting your ability to adapt, you’ll be in a stronger position to secure financing. Ready to take the next step in growing your business? Viking Funding is here to provide straightforward, efficient revenue-based financing that aligns with your needs. Contact us today at 754-812-9181 to apply and get the capital your business deserves!