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Find the Best Rates for Your Small Business Loan

Get connected with top lenders in a matter of seconds!

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Enter Your Loan Amount


Find the Best Rates for Your Small Business Loan

Get connected with top lenders in a matter of seconds!

. . . . .

Enter Your Loan Amount



Choose Your Small Business Loan Type

For most of your business needs, there are loans available for you. For a smooth and quick transaction, it is best to first determine the type of loan you need. Some of the top business loan types offered by lenders are the following:

How to Choose the Right Small Business Loan

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Borrow What You Can Afford

You must know what you can handle to pay — lenders will most likely know as well. So, how exactly can you do this?

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  • Determine your DSCR (Debt Service Coverage Ratio)

Most would hire accountants to get this done. However, finding out what your DSCR is can be pretty simple. The formula: Cash Flow / Loan Payment = DSCR. Your calculations can be based on your monthly or annual cash flow.

Even better, you can simply look for a debt service coverage ratio calculator online to help you out.

  • Performance Analysis for Your Small Business

There are businesses that could have been successful if they didn’t drown deep into debt. Before taking out a loan, determine first whether this investment you are about to make will be profitable. Will this loan help your business perform better? Will it simply be another bill you have to pay on top of your other expenses? Analyze the performance of your business first to know the right amount of funding you need.

  • Identify the Most Ideal Payment Terms

While some lenders will leave you with no choice but to follow their payment terms, more often than not, you can negotiate or choose the ideal loan payment term that’s most beneficial for you. Once you have already determined your DSCR, you can come up with an amount and loan payment term that you can manage.

2

Small Business Loans and Your Credit

Did you know that your personal credit score is the most important factor considered by lenders when applying for a loan?

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Many business owners forget about their personal credit score now that they own a business. You’re not actually getting this loan for yourself, but for your business. However, especially for small businesses, your personal credit score is the most important factor to lenders when applying for a loan. Remember, lenders also take into consideration their security too. They want to ensure that they are giving the loan to the owner, not just the company.

Prior to applying for a small business loan, it is best to do a credit report check of your own. You can do this at annualcreditreport.com. Note: this is a free website, while other sites can charge you hefty amounts just to check on your credit.

Once you have your credit report, analyze and ensure that it is free from errors. These errors may include credit lines you never opened, erroneous accounts, erroneous judgments, collections, and accounts you never knew about. In many cases, there are accounts, collections, and judgments that are completely paid for but may still show as outstanding on your credit report.

If you have determined errors and you are absolutely sure about this, it is best to contact collections and send a dispute letter together with attachments that can prove your claim. If an outstanding debt exists, you’re better to pay it off first then contact the credit bureau. Note that credit bureaus have the obligation to act on these disputes. Investigation results from them usually arrive within 30 days.

If there are no errors on the report, but you believe that your credit history needs improvement, identify where work is needed. Your FICO score is divided into the following:

  • Amounts Owed: 30%
  • New Credit: 10%
  • Length of Credit History: 15%
  • Type of Credit in Use: 10%
  • Payment History: 50%

Different lenders also have different credit score requirements or preferences. For instance, when you are applying for an online loan, the ideal credit score is above 550. However, you can get better offers if you have a credit score between 620 or 640.

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Understanding Your Small Business Loan Application

There are plenty of new loan types that you can take advantage of. However, this makes the process more complicated.

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There was a time when small business loans were as simple as having a good line of credit or heading to the bank to apply for a loan. However, as you may already realize by now, there are plenty of new loan types that you can take advantage of, which makes the process more complicated. Because of this, there are a number of requirements that you must be knowledgeable of to make the transaction smooth and easy.

Depending on the loan product you are getting, there can be a number of different processes and requirements. These lenders can have different preferences, but these are the most common requirements that you should prepare for.

Business Bank Statements – Other lenders only ask bank statements for the last 3, 6 or 12 months and some even require 24 months’ worth of bank statements.

Balance Sheet – Ideally you need to update your balance sheet for the last 60 days so the lender can check on the financial health of your business.

Income Statement – Also known as Profit and Loss Statements, ideally, you have to prepare the information including your business tax returns from the last two fiscal years as well as the year-to-date document that should have been updated within the last 60 days.

Business Debt Schedule – You have to be absolutely honest about this. The lender needs to know whether you have other debts and loans that need to be paid.

Personal Tax Return – As the business owner, you will be the one taking this loan. Your most recent personal tax return document that reflects your income may also be required.

Business Tax Return – Business tax returns within the last two fiscal years are also required by most lenders. Make sure you file yours prior to application to avoid issues during your application.

4

Know the Fees Associated with Your Small Business Loan

Your monthly payment and interest rates are not the only fees you will be paying for. In fact, there are a number of fees associated with small business loans.

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Origination Fee – Also called an administration fee, this is the charge that compensates lenders for expenses they had to shoulder when you’re making a loan.

Application Fee – Background checks and credit score checks can cost money. You will be shouldering this.

Guarantee Fee – More often than not found in SBA loans, this is a fee charged by the government to lenders. You are responsible for this fee as well.

Late Payment Fee – Your bank and other utilities usually charge you a certain amount each time you make a late payment. Lenders do the same when you fail to make a payment for your loan on time.

Pre-Payment Fee – If you decide to pay off your loan without waiting for its full term, there may be a pre-payment fee charged to you by the lender.

Check Processing Fee – This is usually charged to you if you make a check payment to the lender. Check on other payment methods first to avoid this fee.

An Overview of Our Small Business Loan Products

SBA Loan

A Small Business Administration (SBA) loan requires a low down payment, longer payment terms, and is government-guaranteed. If you have been rejected by a bank or offered very high interest rates, this is the best option for you. SBA loans can range from $5,000 to $5,000,000, with interest rates starting at 6.5%. This is one of the most common types of business loans because it allows you to borrow funds for just about any business purpose.

Business Credit Card

There are plenty of business credit cards you can get from a variety of banks and financial institutions. This is totally different from business lines of credits. These are simply credit cards that you can use to purchase anything from anywhere with a credit card terminal or even online. In some instances, you can even get cash advances from your business credit card.

Business Line of Credit

Much like how a credit card functions, a financial institution will give you a business line of credit that you can use each time you require funding. In as little as one day, you can get a business line of credit amounting from $10,000 to $1,000,000. Payments can be made over 6 months to 5 years. In addition, you can access cash at no extra cost — a feature that is not often part of a business credit card.

Personal Loan for Business

If you need help getting business capital, but you don’t need a lot of money, you can get a personal loan for business. This gets approved in as fast as 24 hours and you can borrow as much as $35,000.

Invoice Financing

If some of your clients take a while to pay for your products and/or services, or if you have accounts receivables that are slow at paying, an invoice financing business loan will work for you. You can get loans between 50% and 90% of the total amount of the invoice. These are paid as your client makes payments. Loans like this can get approved in as little as just one day.

Equipment Financing

If you need equipment for your company, say servers for the office or a bulldozer for your construction site, this loan type can be a good option for you. You can get as much as 100% of the cost of the equipment you intend to purchase. The timeframe for you to pay back this loan can be determined by the lifespan of the equipment you purchase.

Small Business Startup Loan

If you’re thinking of starting up your own business and you have a strong personal credit score to back you up, then a small business startup loan is a good choice. You can borrow as much as $150,000 and pay back over six months to four years.

Merchant Cash Advance

Usually one of the more expensive business loan types — a merchant cash advance lets you loan a lump sum that gets paid with a portion of your credit card transactions on a daily basis. It may take a week to get approval, but a merchant cash advance can get you as much as $2,500 to $250,000 worth of financing. While it can be expensive to get this type of loan, it is good to know that a high credit score is not required to apply.

We’re here to help your business grow.

Get the funding that you need through Small Business Loans. Don’t worry about slow months. We’ve got you covered.

Now, you can focus on the things that really matter.

Revenue. Growth. Success.

We’re here to help your business grow.

Get the funding that you need through Small Business Loans. Don’t worry about slow months. We’ve got you covered.

Now, you can focus on the things that really matter.

Revenue. Growth. Success.

The True Cost of Small Business Loans

Lenders are business people too and they’re out to make a profit. Some promise low interest rates, friendly payment terms, and very attractive packages only for you to find out some disadvantages that were sugar coated with lovely words on their advertisements. In order for you to accurately compare loan products from different lenders, ask for the APR (Annual Percentage Rate). An APR calculator is a great way to see the real cost of your interest commitment. Do not skip this step because this will help you avoid hefty hidden fees or massive interest rates that you never expected.

The Best Small Business Loan Choice

Finally, it is time to choose the best small business loan you can apply for. Remember, before you make that decision, you must be sure of the following:

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You will be able to pay for the loan.

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You are confident that you’re getting the lowest rate possible for your qualifications.

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You will be comfortable with the payment terms.

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You are aware of all the fees associated with the small business loan.