Fastest Way To Get A Business Loan

Fastest Way To Get A Business Loan

For many business owners, getting a Business Loan seems like an almost impossible task because they have no idea how to get started, what it takes and how they can increase their chances. However, in fact, the process of obtaining such a loan is actually much easier than it seems. Below you can read a short guide on how to get a small business loan, what you need to get it, what options you have and what payments you can afford. After studying this information and analyzing your financial situation, you will be able to apply and receive a Business Loan without any problems.


What Type Of Loan Do I Need For My Business?

Before taking any steps, you must first understand what needs you want to cover and what exactly you want to achieve. Let's talk about the main options you can consider:

Term Loans

This type of financing is perfect for those borrowers who want to finance a business expansion or a major purchase for their business. Such a loan means that you take the amount you need in a lump sum and then pay it back in regular payments over a fixed period of time specified in the contract. Of course, you will have to pay not only the loan, but also the interest on the loan. Such loans can be quite large and reach millions of dollars.

Business lines of credit

This type of financing is flexible enough for those borrowers who need to use financing as they spend. Thus, you do not need to take a specific amount from the lender at a time - you can withdraw money many times when you need it.

Personal Business Loan

If your business is in its early stages and you want to get money to grow it, then you probably won't be able to get the previous two types of funding. However, a Personal Loan may be a good option for you as it has fewer requirements and can help you cover any expenses.


Am I Eligible To Get A Business Loan?

Almost any borrower can apply for and receive funding, but it is important to understand where exactly. At the moment, there are a large number of loan options, the main ones being banks, credit unions and online lenders. In a bank, you can get the best loan offer with the lowest interest rates, unlike online lenders. However, in order to get a loan from a bank, you must have good or excellent credit. Thus, first of all, you should know your credit score. To do this, you only need to request a copy of your credit report from one of the three credit bureaus (which can be done free of charge once a year). So, if your credit score is at least 690, you will most likely be able to get a Bank Loan. If your situation is not so good, you can still turn to online lenders.

Another important factor influencing whether you qualify for a loan is how long you have been in business. Most often, in order to get a loan from a bank, you must have been in business for at least two years.

The last but not least fact that you also need to pay attention to is your income, which should also be sufficient to get a loan. For a bank loan, you will need to prove that your annual income is in the range of $50,000-$250,000.


Do I Want A Secured Or Unsecured Loan?

Business Loans, like other loans, can be either secured or unsecured. A secured loan requires collateral in order for your funding application to be approved. Collateral can include real estate, car, and so on. It is necessary so that the lender can take it if you fail to repay the loan. If you provide collateral, you will most often be able to qualify for a better loan offer. In general, having collateral increases your chances of getting a loan because it reduces the risk to the lender.

Unsecured loans, accordingly, do not require collateral to receive financing. However, such loans are more risky for the lender, so they have better interest rates and less favorable credit terms.


Read more: Unsecured Payday Loans


How Much Can I Pay Monthly?

Before applying for any loan, you need to carefully analyze the financial performance of your business and make sure that your total income is at least 1.2 times your total expenses. This is to make sure you can actually afford the new loan. Otherwise, you may find yourself in a debt hole from which it will be almost impossible to get out. When calculating, remember that you will need to pay not only the loan, but also the interest on the loan.

Which Lender Should I Choose For a Business Loan?

Of course, any borrower wants to get the best loan offer, but it will directly depend not only on the lender, but also on your credit history, financial situation and many other factors.

  1. Business loans from banks. If you have a good credit history and have been in business for at least 2 years, then getting a loan from a bank will be the best solution. Banks offer the most favorable lending conditions, however, the approval of the application may take some time.
  2. Business loans from online lenders. This business financing option is suitable for you if you urgently need money for your business and you cannot wait. Loan amounts reach $500,000, and the annual interest rate can vary from 5% to 99%.
  3. Business loans from microlenders. If you have a bad credit history or none at all, then this option may be a good option for you. It is also suitable for people who are just starting their business and cannot qualify for a traditional Business Loan. Most often, the short-term loan amount is up to $50,000, and the lender may require a business plan, reports, and the purpose of the loan.


What Do I Need To Apply For A Business Loan?

First of all, you should compare different options in order to choose the best loan offer. However, in addition to this, you should also pay attention to the eligibility criteria for obtaining a Business Loan:

  • Personal data about the business owner
  • Business plan
  • Business tax ID number
  • Business's name and address