Where to get a small business loan? Read to find out

If you’re asking yourself, “where can I get a small business loan?” look no further. Discover which financing option suits you and your business best. And learn more about small business loans in this easy to understand article, now.

Trying to find where you can get a small business loan?

Being a small business owner is no small feat. From front of the house operations, to employee management, revenue generation, growth and development, and back of the house bookkeeping, there’s more responsibility that small business owners bear than their corporate counterparts.

But, did you know that there are more resources available to you that can help alleviate financial strain when trying to expand, cover payroll, or simply bolster your small business’ offerings?

Here, you’ll discover where to get a small business loan, what different financing options are available, and where to start in the application process.

Determine what you need

Small business owners are constantly working toward bettering their services and offerings — and most of the time, those things come with associated costs. Whether they’re looking to hire more staff, cover payroll, grow and expand their location, or upgrade their technology, these all require out-of-pocket expenses that can make things tight on a small business owner’s budget.

But there are resources and lenders that can help them find the financing they need — sometimes, acquiring capital in as soon as one business day.

So, where should you start if you’re looking to get a small business loan?

Determine what you need.

It’s as simple as that. Evaluating what your small business needs in order to properly define what financing route you should go. There are options that allow you to access funds in a short amount of time based on your credit history, or options that take a look at your outstanding invoices and use that to secure capital. But knowing what you’ll use the funding for is of utmost importance when getting started.

Evaluate what kind of small business financing you need

When you’re working with a funder, like Rapid Finance, be prepared to answer a few questions regarding your small business. It’s best to have answers to some common nuances that might delay your funding in order to make your application process even more quick and convenient.

Lenders will ask:

  • To see your past three months of bank statements
  • To run a credit check
  • For a photo ID
  • For a voided business check
  • Why do you need a small business loan?
  • And how much do you need? (Consider how much up-front capital will be needed for things like payroll, expansion, stock, etc.)

Where to get a small business loan from?

While most small business owners will want to receive financing through traditional funding options, when you have lesser collateral or unsatisfactory credit, you might want to eye something from an marketplace funder.

Most marketplace funders provide you with the ability to receive funding in various forms, , based on your business needs. Marketplace funders typically require less collateral, and can be offered to those who have bad credit.

On the other hand, traditional lenders like banks and other financial institutions, offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back at lower rates and more structured repayment options. They also take a strict look at profitability, revenue and collateral access because they need to ensure they can process a return on any financed product.

Determine what type of small business loan or financing you need

What kind of small business loan you need is determined by discovering where you want to get your financed capital from. Here are a few options that might suit your small business’ needs:

  • SBA loan:

    The Small Business Administration is a government-funded entity that provides government-backed loans through partners who can distribute funds when capital is needed. These loans have stringent policies on who qualifies, and typically are used in times of economic distress across the entire market.

  • Bank loan:

    A bank loan is a traditional form of lending deposits a one-time sum of cash into your business bank account and offers varying repayment and interest fees based on your business qualifications. Although this is a preferred method for most small business owners, banks typically require high revenue and excellent credit in order to qualify.

  • Microloan:

    A microloan is another asset that the Small Business Association has put in place for small businesses to access financing through. With loans up to $50,000, certain small businesses and not-for-profit childcare centers can use the funds as a way to start up and expand.

  • Business credit card:

    Much like a personal credit card, a business credit card allows for small business owners to make purchases and payments using a line of credit that’s easily accessed through a credit card. A business credit card, however, will have higher requirements for small business owners to be approved, and can have high interest rates if those requirements are insufficient or aren’t in their satisfactory range.

  • Line of credit:

    A line of credit is a flexible funding option that allows small business owners to access capital on a need-be basis. Your small business is approved for a set amount of credit and then allows you to draw on the approved amount when needed. This option allows you to take out capital when it’s necessary, without having the need to take it all out at once.

Where can I get a loan for my business?

Securing funding for your small business starts with knowing who to go to. While most businesses will target traditional funding options, if you don’t have access to high collateral amounts or have unsatisfactory credit, you may want to consider choosing from a marketplace funer.

Most marketplace funder provide you with the ability to receive funding in various forms, like a term loan or line of credit, based on your business needs. They typically require less collateral, and can be offered to those who have bad credit.

While traditional lenders, like banks and other financial institutions, only offer loans and lines of credit to those with satisfactory credit and high collateral amounts to ensure they are able to be paid back. They also take a strict look at profitability and are very strict in who they choose to lend to.

Choosing a lender for your small business loan

If you’re looking for an easy way to determine what financing route you should take, consider the following:

  • If you have a lower than satisfactory credit score — choose a marketplace funder
  • If you don’t have high collateral amounts to secure funding — choose a marketplace funder
  • If you have excellent credit and want longer times to pay back your loan — choose a traditional bank lender
  • If you have high collateral amounts available — choose a traditional bank lender

If you’re looking where to get a small business loan, these simple prompts can help determine what route you and your small business should follow in order to secure access to working capital.

Apply for a small business loan

If you’re ready to move forward with a small business loan application, you should be aware that the application process for a marketplace funder differs from what traditional lenders like banks and financial institutions require.

For a marketplace funder, you’ll need to follow the below:

  • Determine how much financing your business needs and what it can afford
  • Review your business qualifications like your credit score, time in business and revenue
  • Accumulate all the documents and requirements that are needed to apply (bank statements, photo ID, voided bank check, business license, tax returns, and any legal documentation), and then proceed to submit your application online. However, you may need to speak with a business advisor in order to figure out the best route for you and your business to take.
  • You can discuss with a business advisor what options would work best for your business. If you know your repayment options and how much you can afford, you’ll be able to best determine which route of financing to take.
  • And lastly, you’ll need to discuss a timeline for receiving your funds. This can be quicker for most alternative funder through funding options like short-term loans, or can take a longer period when dealing with bank loans or SBA loans.

For traditional bank lenders, you’ll follow a more traditional route which includes:

  • Accumulating your bank statements with positive revenue history
  • Stringent credit checks that look for satisfactory or better credit
  • A collateral evaluation to determine how much your current assets are worth
  • Applying directly through them — meeting with underwriters and tellers in order to submit your application
  • And finally, determining what kind of funding you’ll receive like a business credit card, line of credit, or term loan

Where should you get a small business loan overview

When you’re trying to determine where to get a small business loan, you should consider all factors that suit your small business’ needs. Knowing the differences between a marketplace funder and a traditional lender can be half the battle, but understanding what financing options and where you’ll find them can help you make an educated decision on what business financing you and your small business can take.

If you have any questions or would like to speak with a business advisor, call one of your small business experts at Rapid Finance today: (877)-252-0827.