FIND OUT WHAT TYPE OF BUSINESS LOAN YOU QUALIFY FOR

The 8 Most Wanted Types of Business Loans

 

Small business lending has much more to offer then just traditional term loans. From SBA loans to invoice financing, your business has multiple options with APRs starting at 6.29%.
Lendook's marketplace covers many different small business loan products--offered by a variety of the country's leading lenders. Learn more about each of these products below.

business line of credit 

personal loan for business 

 merchant

advance 

Want to know which of these

Business loans you qualify for

Browse Our Small Business Loan Options

SBA Loan
 
An SBA loan is government-guaranteed, long-term funding made by SBA lenders that allow businesses who may have been turned down by the bank to receive low-interest rate funding that can be used for many business purposes.

Maximum Loan Amount

$5,000 - $5 million

Term

5 - 25 years

Interest Rates

Starting at 6.5%

Speed

As little as 3 weeks

Term Loan
 
Just like a traditional bank loan, with a traditional-term business loan, you are lent a set amount upfront, which you pay back (along with fees) over a set period of time.

Maximum Loan Amount

$25,000 - $500,000

Term

1 - 5 years

Interest Rates

7 - 30%

Speed

As little as 2 days

Business Line of Credit
 
With a business line of credit, a financial institution gives you a credit limit, or a maximum amount of capital you are able to draw on at any given time. Just like a credit card, you only pay interest on the amount you use.

Maximum Loan Amount

$10,000 to Over $1 Million

Term

6 months to 5 years

Interest Rates

7 - 25%

Speed

As little as 1 day

Equipment Financing
 
With equipment financing, the lender will upfront you cash to help purchase the equipment outright. You then pay back the total amount lent, plus fees, for a set period of time.

Up to 100% of equipment

value

Term

Expected Life of Equimpment

Interest Rates

8 to 30%

Speed

As little as 2 days

Invoice Financing
 
Invoice financing allows you to sell your invoices to a lender, who will then upfront you a large majority of the invoice amount, holding a remaining percent (usually 20%) until the invoice is paid.

Maximum Loan Amount

About 50 to 90% of invoice

Term

When customer pays the invoice, you receive the remaining 10-50% reserve amount, minus the fees.

Interest Rates

Approx. 3% + %/wk outstanding

Speed

As little as 1 day

Merchant Cash Advance
 
Merchant cash advances are not your typical small business loan. With an MCA, financing companies upfront you a set amount of cash and then you repay this advance (plus their fee) with a set percent of your daily credit card sales.

Maximum Loan Amount

$2,500 - $250,000

Term

Automatically deducted daily through your mercant account.

Factor Fee

1.14 to 1.18

Funding Time

1 week

Short Term Loan
 
With a short-term small business loan, you are lent a set amount upfront, which you quickly pay back (along with fees) over a short period of time.

Maximum Loan Amount

$2,500 - $250,000

Term

3 - 18 months

Interest Rates

Starting at 10%

Speed

As little as 1 day

Personal Loan for Business
 
A lot of people don’t know that you can actually use a personal loan for business purposes. Personal loans are especially helpful for new businesses that don’t have a long financial history to show lenders. Personal loans can often have lower interest rates than some business loans, making it a great option for young companies looking for financing to grow their business.

Maximum Loan Amount

$35,000

Term

3 - 5 years

Interest Rates

5.99 to 36% interest

Speed

As little as 1 day

Small Business Startup Loan
 
Our three startup loan products can help your young business get the capital needed to grow. These three products (business credit cards, business line of credit, and equipment financing) are a more traditional form of startup capital and a great option if you have a strong personal credit score.

Maximum Loan Amount

$150,000

Term

6 months to 4 years

Interest Rates

7.9% to 19.9%

Speed

As little as 2 weeks

Apply with the Top Lenders

Nationwide with Lendook

Guide to obtaining Small Business Loans

This guide will explain how to obtain the best business funding you can qualify for without wasting your time searching the internet for the best options available. 


In addition this guide will open you up to all the possiblities and combinations you can put together to obtain funding. It will also teach you how to actually prepare your business so you qualify for funding from the maximum amount of sources available. 


Without a guide you can waste your time applying for the wrong types of funding only to get denied and sometimes ruin your chances for further funding oppurtunities. 

A few simple steps can make the difference between you getting qualified or turned for the financing your business needs. By reading this guide you will save yourself a massive amount of time, money, and headaches and most importantly you will know what 99% of business owners down know, How to get approved for funding. 


The biggest problem with just shooting in the dark and hoping for the best is that 9 times out of 10 you Will Not Qualify. Just like driving to a new place you've never been to before, you need a map thats going to guide you to your final destination. 
Were not living in 1492 anymore, you don't have to be Christopher Columbus and go out sailing the world of business finance with a simple compass telling you which way to go, now you can get there with a GPS system that guides you through every single step of the way. Follow the steps in this guide and dig into each one to find the funding solution that works best for you. 


 

Are you a Startup Business or Established Business?


The first step is to figure out exactly what your business is classified as according to lenders. There a 2 key factors to take into consideration when figuring out what category your business fits into. 


1. Time in Business
2. Annual Sales Revenue


Regarding time in business any company thats less then 2 years old and sometimes 3 years old depending on the lender will fall under the category of a startup business. Any business that has 2 solid calendar years or 3 years of business existense is classified as an established business as long as your business can show annual sales of atleast over $150,000 and over $250,000 for the best funding options available. So if you business is 2 to 3 years old and generating a revenue of over $250,000 your right in the sweet spot to obtain the most funding options available to small business owners. Many types of financing offered to established businesses simply arent available to Startups. 


Is there a way to start with an established business and not have to wait 2 to 3 years to be considered established?
The answer to this question is Yes and No. Yes it is possible to purchase whats known as a shelf corporation thats aged more then 2 to 3 years old to get around the age rule, but you can still run into problems with many lenders when they look at other factors like the age of your business bank account. Many lenders check the age of your business bank account and consider the day you opened your business bank account to be the starting date of your business. 
Many people anxious to get funding will go out and spend thousands of dollars on a shelf corporation only to realize the lenders they were trying to apply for have pulled the date the first business bank account was opened and use that to date the age of the company instead. 


However, there are lenders that don't look at the age of the bank account and only focus on how long your corporation has been established for. 


These lenders are the ones to target when obtaining business financing. The only problem is most business owners have no idea which lenders do and don't check the age of the business bank account. This is why working with a loan matching company is so important. They know the exact lenders you need to apply for before you apply.

 

Assess your credit and income
 

Hows your credit looking? Do you have atleast a 650 credit score, what about 680 or better? Missed any payments in the last year or 2? Do you have a good mix of revolving accounts and installment accounts? Any public records, bankrupties, tax leans, judgements?


If you checked all this and your credit completely sucks your going to need a credit partner. This is basically a friend, family member or someone who believes in your business who will lend their credit to you in return for a mutual fee you pay to them out of the funding you obtain using their credit. 
Once you've obtained good credit or found someone else with good credit willing to barter its time to move on to assessing your income. 


Do you have w-2 wage income for a job or do you have self employment income from a business? Ok, Whats does line 37 show your adjusted gross income as? Does it show enough income to cover expenses?

 

Great Tip: 
If you have a w-2 job and your just starting to build a business on the side. Don't quit your job yet! I know this sounds counter productive with everyone telling you to take a chance and take off full force into business ownership. 
The problem is though, when it comes to getting funding for your business to take off, your going to need to show some kind of income in most cases. By quitting your job your now going to show a 0 income and greatly limit your options for obtaining business funding. 


Instead obtain funding while you still have your job using the income from your job to provide as proof that you can pay the financing back. After you've got your funding, grow your business enough to support your daily needs, then quit your job!


I've seen it happen over and over again with newbie business owners who want to obtain funding just after quitting their job and deciding to go the independent route. They're super excited to get started and jump the gun to soon completely taking the carpet out from under them. They go to get funded only to be told, were sorry but with no proof that you can pay us back the money we lend to you, were gonna have to deny your application. 


 

SBA and Secured Funding
 

HIts always best to start with the best funding options first even if I'm not a fan of sba loans just to see if they are a possibilty or not. 


For newer startups, SBA is limited to the 7(a) program which is extremely difficult to qualify for because it generally needs to be backed by collateral such as your 401k, realestate property with no debt or substantial equity, stocks, bonds or anything else that can be converted into cash. You will also need to come with a 25 to 30% down payment. 


If your an established business with 2 years of profitable business tax returns you may have a decent chance at securing an SBA loan without collateral. But since startups have no established financials to show they always need to be backed by collateral. The SBA is also not the only option when it comes to loans backed with collateral. 


If you own any type of vehichle free and clear of debt you can get a loan on the vehichle and receive cash you can use to launch your business. 


If you have property with no debt or property that has equity in it and you also have verifiable income then you may want to look at securing a home equity line of credit (heloc), this can be one of the most affordable ways to jumpstart a business. Its one of the creative ways Ray Krock financed Mcdonalds before it was the billion dollar company its know as today. 


Additionally if you have a 401k/IRA from a previous job you can self direct it to gain access to it tax free in order to start your business. You can also get a loan typically up to 50% of the value of your 401k.  


This usually causes the person to become so down feeling like they failed that they stop believing in themselves and pray that they can find another job so they can feel safe and comfortable again. 


These people usually become the negative minded ones that talk you out of your dreams when you ask them their opinion. Afterall they feel like if they failed then everyone who tries to start a business must surely fail to right. nders you need to apply for before you apply.

 

Looking at unsecured term loans
 

Unsecured term loans can be a great option to consider and do not require collateral or security. These loans are perfect for startups who don't have collateral or 2 years of profitable business tax returns. Anyone owning more then 15% of the company must have a decent credit score of 650 or better with 680 or better greatly increading your odds for success. If you can combine this with verifiable income thats enough to cover your expenses adequately then you can literally qualify for up to $100,000 in unsecured term loans. 


If you need to consolidate your high interest, high balance credit cards to prepare for funding then these unsecured term loans can be a great option for that as well. Later on we will look at how these loans work and how to qualify for them. 

 

Lines of Credit
 

Traditonal lines of credit are basically know as the holy grail of start business financing. As a line of credit you can use it, pay it down, and use it over and over again. 


When you build a relationship with a lender they also often increase your credit limit over time. These are unsecured lines of credit without collateral or security and generally come with very reasonable rates.

 
Since these are the holy grail of business funding, the qualifications can be more difficult. You generally need atleast a 700 fico score (720+ is even better) and strong income with no late payments in the last 2 to 3 years to qualify. This is another excellent option for an entrepreneur and we will talk about it in detail later in this guide. 

 

Revolving Credit Lines/ Cards
 

Revolving credit line type credit card accounts are one of the most flexible options available for business owners today. Whether your a startup or established business these accounts can come in very handy. They often come with 0% financing for 9 to 15 months and normal credit card rates after the intro period. They come in both personal and business form and the amazing part about business accounts is that they Do Not report to your personal credit and actually help you build buisness credit. 


They are the only business funding option that a completely new startup can secure entirely in the name of the business typically without the requirement of business or financial documentation. 


This is the perfect option if you icome is difficult to verify or prove or if you write off alot of expenses and but in reality make more then what shows on your tax returns. You can state the appropriate income without having to be scrutinized to pieces with heavy documentation requirements famous by underwriters since the recession. 


One of the biggest secrets about unsecured revolving credit lines/ cards is that you can actually access up to 90% of the credit limit of each account or card in CASH. Yes, you can actually pull the cash off these credit cards and with the right steps you can legitimately maintain the 0% rate on these cards while taking out the cash. 


This particular funding hack took time for business owners to learn but its an amazing funding solution. Of we know most business expenses can be covered by a card but there are those times when you need to pay your employees or pay office rent that require you to have cold hard cash. 


Revolving credit lines are one of the most powerful funding tools a business owner can have at their disposal. We will go further into breaking down this funding option later in this guide. 

 

SBA for Established Business
 

RAs discussed earlier if you own an established business you gain access to some unique funding options that startups don't have access to, and one of the biggest benefits of bieng an established business is that you may now qulify for an SBA loan much easier. There are SBA loans that range from $150k and under which don't your business to put up collateral. They do ask however that your last 2 years of business tax returns show enough profit to cover the new loans and that you show enough cash flow to cover your own personal bills. 


There a few tricks to how the SBA calculates your business income so even if you do show a loss on your business tax returns but you pay yourself a w-2 salary you may still be able to qualify. We will break this down completely later in the guide. As always though with the SBA your loan could take months altough there are a few innovative SA lenders that can make funding happen in less then a month if your aggesive at filling out he mountains of paperwork in a timely manner. 

 

Term Loans and Lines of Credit

The SBA can be very difficult to obtain a loan from so there have been many competitive non SBA lenders offering business term loans without the need for official collateral to secure the loan.


There have even been business lines of credit products created by a few non SBA lenders as well. The great part about these types of alternative creative business funding options is that they generally move quicker then SBA. Although they still require you to have an established business with positive financials, if your business can meet their criteria you can recieve funding in less then a week. 

 

 

Corporate Credit

Corporate credit is another one of those holy grail things that business owners are looking for that seems to be mysterious that many business owners don't believe even exist. 


Business credit does exist though although maybe a little different then how most entrepreneurs understand it. Before the recession there were some lenders that would lend a business money based on business credit and would not require the owner to qualify using their personal credit. Those days are almost over when it comes to aquiring credit cards like an american express business card, or capital one spark business card. However with the right steps you can actually build your business credit up to the point of recieving real lines of credit for your business without ever linking your social security number. You must start with whats know as vendor accounts, then work your way up to store credit cards, then gas station fleet cards and finally cash credit cards. 


For most buisness owners building corporate credit can take years but the truth is excellent buisness credit can be built much faster then personal credit in as little as 90 days if you know the right steps to take. There are a few systems available online that will literally walk you through the exact process of building business credit step by step. 


There are also a few companies who will actually build business credit for your company on your behalf for a fee. If your the type who doesnt like to get into to many details then having it done for you may be a good option. 


Business credit becomes very important for any type of larger funding and the more established your business becomes the more important it becomes to have excellent business credit. 


Established business funding options like SBA, business term loans and business lines of credit will require a strong business credit score. 


Building business credit will help you secure more funding, seperate your business from personal liablities, and secure bigger contracts from larger companies as well as government contracts.


It is increasingly becoming a requirement to have very good business credit to qualify for an SBA loan now days. We dive business credit more deeply here in this guide and open up a world you never knew existed. 

 

Putting it all together with Creative Financing

Every business owner needs to learn how to secure creatvie financing to stay ahead of the pack. 
Creative financing might be as simple as obtaining an unsecured term loan to pay down your high interest credit card balance which will allow you to qualify for a traditional line of credit and some business credit cards.

 
When we talk about creative financing, were talking about different funding combinations to obtain the maxiumum amount of funding at the best rates possible. Were talking about building a strong profile that lenders are looking for before ever applying. 


An example of creative financing would be getting a home equity line of credit (heloc) and paying of all your personal debts with it and fixing any negatives on your credit. Then using your low debt to income ratios and great credit to obtain high limit business credit cards. 


Then taking those high limit business credit cards and using them to obtain a hard money loan to purchase a house while only having to pay the hard money lender 20% of the total they lend to you using your unsecured business credit cards. Now your leveraging other peoples money to purchase a property that you can fix up and resell for a profit. 


If you would not have taken out the heloc then the money would still be locked up in the equity of your house and doing nothing to help you grow your business. By understanding creative business financing your able to unlock money that would otherwise be wasted. In a way creative business financing is your key to unlocking money you didn't know you had in the first place. 

 

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