Guide On How To Get A Small Business Loan Anytime Anywhere

 If you’ve been in business for at least 1 year, make $2.5k per month, and have a credit score above 550, you may prequalify for up to $100k in financing with Kabbage. The application can be completed entirely online in just a few minutes.

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Before getting into the different options, it is important to understand the five primary factors that determine which types of business loan are best for you. They are:

    Time in business
    Personal credit score (check yours here for free)
    Business gross annual revenues
    Business net annual profits
    Collateral to back the loan

In general, the longer you’ve been in business, the higher your personal credit score, business revenues and profits, and the more collateral you have to back the loan, the easier it will be to qualify for a loan and the lower your interest rate will be. The financing options that are best suited for you also depend on how quickly you need financing and on how your customers usually pay you (e.g. invoices, credit cards, etc.). Below, I will first summarize each business financing option and then go into the details.
Summary of Small Business Financing Options

With so many new types of lenders popping up these days, it can be hard to keep all the financing options straight. Here’s an infographic summarizing the different types of business loans and business loan requirements. Below, I explain the options in further detail, starting with the lowest interest rate business loans and ending with higher rate products and personal sources of financing such as credit cards and home equity loans. I round out the article with some general things to keep in mind when searching for a small business loan.

Your Financing Options in Detail
Part 1. Bank and SBA Loans
For established businesses and borrowers with good credit.
SBA 7(a) Loans

A 7(a) loan backed by the U.S. Small Business Administration (SBA) is one of the cheapest ways to get business capital. You can borrow between $5k and $5m. The loans are not made by the SBA. They are made by a partner bank or lender are are partially guaranteed by the SBA in the event the borrower cannot pay back the loan.

I highly recommend SmartBiz for SBA loans. They are an online platform that can help you get an SBA loan in 1 month, versus 3-4 months if you went to a bank. They’re also more likely to get you funded. Click here to get started.

Qualification Criteria
In general, you need the following to qualify for an SBA loan for an existing business:

    Be in business for at least 2 years.
    Personal credit score above 680 and good credit history. Check your score for free here.
    May require a down payment, particularly if used towards real estate purchases.
    Must personally guarantee the loan, and in some cases, pledge collateral.
    Need a business plan and detailed financial data on the business.
    Business is profitable.

In some cases, a person look to start a new business can also get an SBA loan, but only if they have industry and management experience, a sizable down payment, and excellent credit.

Pros
    Inexpensive (6-9 % APR).
    Large amounts of financing available.
    Long terms (10 years typical) make monthly payments lower.
    In many cases, you don’t have to provide collateral or a down payment.

Cons

    Need excellent credit to qualify.
    Can be a slow process, lots of paperwork required.
    Must pay a guaranty fee to the SBA for loans above $150K and referral/packaging fees and closing costs for all loans.

Resources
    How to Apply for An SBA Loan – The Ultimate Guide
    Types of SBA Loans
    Review of SmartBiz, our recommended provider of SBA loans
    SBA Loan Rates
    SBA Loan Calculator
    Funding a Franchise With an SBA Loan

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