A Guide to Getting a Small Business Loan Pt 2
In the last article we covered the beginning steps of the process of getting a small business loan through the federally backed SBA program. The first steps that we discussed in depth include determining the right type of loan to help sustain your small business as well as deciding on the best federally-approved lender to process your loan through. In this article we’ll discuss the final requirements needed to start filing for your SBA loan fast.
Online lenders offer small business loans and credit lines ranging from 500 to 500,000 dollars. The average APR on these ranges from 7 to 108 percent, depending on the lending institution, the size and type of loan, the repayment term’s length, the credit history, and whether or not collateral is needed. Online loan approval rates are relatively higher; also, funding is relatively faster acquired in relation to what traditional banks offer. An online lender can approve your loan request inside twenty-four hours, making them the best option in multiple scenarios; you just need to compare the options you have under that, and decide what works the best for you.
While you might know how to get a small business loan and from where, feasibility ultimately boils down to your particular set of requirements. Some of the things are at the hands of yourself when it comes to which type of loan you will for. Major decisions taken by lenders are as per certain attributes of your business.
Find Out Whether You Qualify
You have a few things to consider when determining this, and they are as follows.
- Credit Score: This represents your creditworthiness. Lenders use a credit score to decide who qualifies for loans, and the allowed rates of interest and credit limits. They look for reports from the US credit bureaus. A credit report has information like your credit accounts and the credit inquiries you make, as well as history of repayment. If your business’s credit score is below a threshold that banks have set for borrowers, then you can consider an online loan as well.
- History: Besides your credit score, a lender will take into account how long you have been operating. To qualify for most online loans, you need at least twelve months under your belt. For bank loans, on the other hand, you need twenty-four months at the least.
- Minimum Annual Revenue: Several online lenders require a minimum revenue, which could range anywhere from 50,000 to 150,000 dollars. Know your annual revenue and find out what a given lender requires you to have, before taking the time to apply.