Large Business Loans
Your business, whether small or large, needs financing. You need the funds for day-to-day operations, for meeting such expenses as rent and employee salaries, acquiring business assets, and for expansion.
Depending on your immediate and long-term needs, you might need somewhat larger funding. One of the most reliable sources of business funding is loans. And there are a couple of lenders willing to fund your business.
In this article, we’ll cover all about large business loans. We’ll help you guarantee your chances of approval, and point you to the top lenders in the market today.
- Est APR
- Min credit score
Credibility Capital
- 19.99 - 24.99%
- 650
Funding Circle
- 12.18 - 36.00%
- 660
OnDeck
- 9.00 - 99.00%
- 600
- APR range
- Fees
- Terms
- Amounth
- Unemployment protection
Bank 1
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 2
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 3
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Table of Contents
How to get Large Business Loans
Depending on the type of business you’re doing, you’ll probably need lots of external capital injected from time to time. This is especially when experiencing a downtime in sales, during an expansion, renovation, and even during the normal day-to-day business operation.
For such, small amounts may not solve your needs. And, that’s why SBA microloans, lines of credit, and the short-term loan may just not cut it.
- For large business loans, the first step would be to get your financials in order. That involves doing a full assessment of your current financial state and your exact fund requirement.
- The next step involves listing all your assets. While at it, identify the ones you’re comfortable using as collateral.
- For the next step, consult with your financial advisors. They’ll help you to properly vet your financial positions and advise you accordingly. In most cases, they’ll even advise you on how much to apply for, and the best lending institutions for the same.
Ask your financial advisors how much to apply for.
Requirements to qualify
Different large business loan lenders have different requirements for approval. However, there are universal requirements a borrower must meet that are also provided by law.
First off, the primary applicant must be 18 years and above. You should also be residing in the United States and your business operates within territories of the US.
Your business must have been operational for at least 6 months prior to application of the loan. And for an even better shot at approval, you should have been a client of the lender for the said period.
Such documents as business registration certificates, sales records, supplier records, inventory, tax returns, and bank statements can be used to prove the period in which the business has been operational.
Lenders are also keen on the borrower’s credit profile. A credit score of at least 620 will give you an edge with most lenders. An even better score will give you even higher loan limits, lower rates, and more flexible repayment terms.
The financial position of the business plays an even crucial role. For instance, most lenders will analyze your books to know your present lenders, how much you owe. Most lenders will also want to see your annual sales ranging at $100K.
If these are in order, proceed to find potential borrowers. While at it, be keen on the lender requirements, loan limits, interest rates, and repayment terms.
Once you find a lender that conforms with the financial requirements of your business, proceed to submit a formal application. Lenders will require such basic information as the business name, address, contact details, and product line.
You’ll also state the intended use of the loan you’re applying for and how much you wish to borrow. Most lenders will disburse the funds between 24 to 72 hours upon approval.
Best Types of large business loans
For large business loans, explore any of the following options;
SBA Loans
These are among the most sought-after loans. That’s partly because of their prime rates, longer terms of up to 20 years, and high loan limits of up to $5 million. You’ll also enjoy the Federal Government’s guarantee through the Small Business Administration program.
But on the flipside, SBA loans are also characterized by a longer period of funding of an average of six months through banks, and the subsequent funding gaps.
The loans are the best businesses seeking expansion and refinancing of their existing debts. And, borrowers with strong credit profiles willing to withstand the long funding time.
| Pros | Cons |
|---|---|
|
Low-interest rates |
Harder qualification requirements |
|
Higher loan limits of up to $5 million |
Stricter application process |
|
Longer repayment terms |
|
Term loans
These are also common sources of large business loans. Here, a lender offers cash in lump sum upfront. You’ll also pay your loan within a predetermined period.
With such, you can apply up to $1 million. And, you’ll get even faster funding with online lenders than with traditional banks and other borrowers.
Term loans are best for businesses envisioning expansion. They are also best for borrowers with good credit seeking faster funding.
| Pros | Cons |
|---|---|
|
Access to upfront cash for your business |
You may require such collateral as real estate or assets that may be repossessed by the lender in case you default. |
|
Ability to borrow even higher loan limits |
Term loans by online lenders could come with higher costs |
|
Faster funding process of a few days when you borrow from an online lender |
|
Equipment financing
Through equipment loans, lenders can help you acquire assets for your business. Such include auto loans that cover trucks, vans, trucks, and light cars.
Through the same, you can also access commercial real estate funding so you can acquire real estate property for your business for expansion and extra business flexibility.
With equipment financing, you can access loans of up to $10 million. The loans also come with flexible repayment terms of up to 25 years. The flexible terms are meant to make the loans affordable and accessible even to small businesses.
These loans are best for businesses looking to own assets outright.
| Pros | Cons |
|---|---|
|
A chance for a business to own property and build maximum equity in the same |
Most lenders will need you to have a down payment to qualify |
|
Lower rates for borrowers with strong credit profiles |
The acquired equipment could depreciate in value before you finish repayment |
Business lines of credit
This is a revolving loan best for sorting out business’ recurrent financial needs. Such include emergency expenses, travel costs, utilities, office supplies, et cetera.
You’ll make monthly repayments of the amount borrowed till you clear the loan. Since you’ll only pay interest on the amount borrowed, you can as well choose to borrow the loan before you actually need it. this gives you an edge in case of unforeseen events.
| Pros | Cons |
|---|---|
|
Purchases on business credit come with rewards |
Possible high costs because of the variable rates |
|
You won’t need collateral for the loan |
Extra hidden fees |
Small business loans
Make-no-mistake, despite the name, the loans can actually fund working capital. Repayment is done regularly, usually monthly.
You don’t need collateral to apply for this loan product. You also don’t need to prove a positive business cash flow to get approved for a working capital loan. And, the best part of it all, most lenders will likely overlook your bad credit, industry restrictions, and open tax liens.
The application process is streamlined and fairly fast. As such, your loan can get approved as soon as within 24 hours of approval.
| Pros | Cons |
|---|---|
|
You don’t need collateral |
Risky to the lender since the borrower doesn’t offer collateral |
|
Less strict application process |
|
|
Faster approval |
|
Large business startup loans
Startup loans are meant to help a new business meet its financial needs. The funds are used as working capital; mostly to purchase real estate property and business equipment, furniture, inventory, and supplies.
A larger percentage of startup loans are small businesses since they are more ‘hungry’ for growth. These loans are available in banks, online lenders, and other financial institutions.
Lenders lay special emphasis on the borrower’s credit history. So, such things as credit scores play a huge role in whether or not your loan will be approved.
Borrowers with good credit scores (basically anything above 650) will get you lower interest rates, higher loan limits, and flexible repayment terms.
However, borrowers with bad credit scores can still qualify for startup loans. The only difference is they could part with higher interest rates and what many would consider ‘not-so-flexible’ repayment terms.
Building good credit will open doors to many lenders and excellent loan products. But, before taking this, or any loan products, you should consider whether or not you’ll afford the repayments.
If your main aim is to use the loan to build your score, consider going for a business credit card. This gives you the option of financing while boosting your score at the same time. And the best part is, you’re not required to tap into your capital.
When is better a large business loan?
You’ll need a large influx of cash in your business from time to time to grow and keep it stable. For such, microloans and other small sources of funding might not be as efficient.
The following are a few genuine reasons a business might think of going for large business loans;
- Real estate needs – expansion and premise improvement are not new concepts in business. Such ventures are expensive, and mostly not affordable to business which then opts to borrow
- Acquiring major assets – such assets as real estate, motor vehicles, and machinery are crucial to the growth of the business. They make sourcing, production, and distribution easier. However, these are often expensive and only a few businesses can afford them. For the many who can’t, large business loans are often the way out.
- Delivering large orders – landing major business deals is every business’s dream. However, such come with significant costs. If your business isn’t and cannot afford such, a large business loan can bail you out. And, here’s the best –the loan comes with exceptional offers and exciting incentives
- Improved product range – if yours was testing the movement of certain products in the market and they worked, the most logical thing to do was to improve your production volume and quality. And, that is usually demanding, both financially and technically. This could move a business to go for large business loans, a move which is totally justified if the products in question promise good returns and minimal waste
Online Loans without Credit Score
When it comes to online personal loans without a specific credit score, the best option is with One Main Financial. This Indiana-based financial services company can allow you to borrow up to $20,000 with an APR range of 18% to 35.99%.
One Main Financial is great for those with bad credit scores but needs cash fast. This company does not factor in excellent credit scores in approving loan applications and can even accept those with lower-than-average credit.
The drawback, of course, is this lender’s high rates. It has one of the highest rates among other online lenders, and it also charges an origination fee. But this can be ameliorated by adding a cosigner to your application or opting for its secured loan instead.
What matters to this lender is your ability to pay back the loan, and it should be apparent just from your application.
Bottom Line
When getting into business, you envision expansion, significant growth. And, you wish for that within the shortest time possible. Getting the funds to open that new branch, acquire a bigger business premise, get into a new product line, buy equipment or secure some real estate property can be a bit of a hassle since large sums are involved.
You need a financial boost, and that’s where large business loans come into play. Such can be hard to get, especially bank and SBA loans.
However, there are other multiple options covered on the post that you can explore. There are also alternative lenders whose policies conform to your financial needs. Get in touch with any of them and let them help you grow your business.
Frequently Asked Questions (FAQ)
You can qualify for most large business loans with no money. Lenders don’t lay much emphasis on the financial muscles of the business. And, for borrowers who don’t qualify for these, there are SBA loans, microloans et cetera, that they could explore.
Borrowers can choose between SBA loans, equipment financing, term loans, business line of credit, and even small business loans depending on such factors as their credit profile, loan history, and the use of the funds
You can apply for large business loans from banks, online lenders, and other financial institutions. The table above has some of the best lenders in the market today.
Borrowing to take care of finances when you’re just starting a business is normal. For startup loans, a strong credit score and good loan history will get you financing faster and cheaply. A credit score of above 650 will do just fine.
Large business loans don’t require collateral. Plus, they may also be used to build your credit profile and boost your credit score.
