Are you eligible for a better rate?
How to Apply For a Small Business Loan
Obtaining funding is a necessary step for many small businesses to expand their operations. However, getting that funding can seem challenging. Comparing your options between loan types and lenders takes time — a resource that, as an entrepreneur, might be at a premium for you.
Additionally, some lenders have stringent requirements that screen out many entrepreneurs from the funding they need.
It’s not as hard as it sounds, though. The key is preparation. Follow these steps to find the right small business loan for you.
Decide if You Need a Small Business Loan
First, determine why you’re seeking a loan. Are you just starting? Are you looking to expand? Or perhaps you have high demand and need more capital to buy inventory. These are all valid reasons to get a loan, among others.
Pick a Type of Financing
Loans aren’t your only choice of debt available. Consider your other options, like
- Business credit cards: Business credit cards provide a flexible financing option for smaller purchases. Plus, you may be able to earn rewards on purchases. Approval for these is easy, as it’s based on your personal credit history.
- Invoice financing: With invoice financing, you use unpaid invoices as collateral for loans. Lenders usually require you to pay the full amount back when you’re paid for the invoice.
- Lines of credit: Revolving credit lines similar to business credit cards. Excellent for ensuring you have enough working capital in case low short-term cash flows.
Decide On a Type of Lender
- Banks and credit unions: A good choice if you have strong credit, collateral, healthy sales volume, and cash reserves. Franchises, in particular, will find it easier to get loans from banks. The application process at banks and credit unions can take a long time, so be ready to wait.
- SBA: SBA 7(a) loans are 80% backed by the government, making them less risky to lenders — meaning lower interest rates for you. Excellent credit is necessary, but collateral requirements may be negotiable. If you need the money fast, you can get an Express Loan — but these have higher interest rates than standard 7(a) loans.
- Online/alternative lenders: These have looser restrictions, but loans often come with higher interest rates, shorter terms, and lower loan amounts.
Collect The Necessary Documentation and Apply
After narrowing down your list, you’ll need to gather some documents for your loan applications.
Documentation requirements vary by lender, but here are some pieces of information most will likely require:
- Bank statements (business and personal)
- Business financial statements
- Business legal documentation (proof of registration, licenses/permits, commercial lease agreement, etc.)
- Business plan and forecasts
- Proof of collateral
- Tax returns (business and personal)
Your credit score will take a small hit since you’re applying for new debt. Thanks to the law, however, you have about two weeks during which you can apply for several loans without each one counting against you.
Getting funding for your business can seem daunting, but Fundvisor is here to help. By working with us, we can match you to the best financing for your business.
Helpful Tips & Information
The Pros and Cons of SBA Loans
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of SBA LoansSmall Business Administration (SBA loans) are loans backed by the Small Business Administration. The SBA doesn’t lend the money; banks and other lenders do that. The SBA simply guarantees a large portion of each loan to reduce the lender’s risk. Types of SBA Loans There are several SBA loan types. SBA 7(a): The main type of SBA loan. You can borrow up to $5 million in 7(a) loans. SBA Express: A smaller 7(a) loan with a faster approval process. SBA 504: Designed for acquiring fixed assets. CAPLines: An SBA line of credit. There are several types of CAPLines, each for a different purpose. Export Working Capital: Used to fund operations related to export sales. Export Express: A faster turnaround version of the Export Working Capital loan. Microloans: Small loans designed [...]
The Pros and Cons of Term Loans
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Term LoansTerm loans are much like a personal loan. You take out a fixed sum of money at a specified interest rate — either fixed or variable — and then repay the loan amount in monthly installments. Many businesses can make great use of term loans, but they certainly aren’t for everyone. Our goal at Fundvisor is to ensure you get the best funding vehicle for your business. Of course, you’re likely too busy running your business to spend hours researching term loan details and jargon. To that end, we’ve compiled a list of the pros and cons of term loans. If you feel that a term loan could be right for you, please reach out to us. The Pros of Term Loans Large Amounts Available Term loans have long repayment [...]
The Pros and Cons of Lines of Credit
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Lines of CreditSometimes, your business is short on cash right when you need it most. It might be that a supplier is selling inventory at a discount, and you want to take advantage. Perhaps you have a potentially lucrative project sitting in front of you. Or maybe you need emergency cash to repair or replace old equipment. A business line of credit is an excellent solution for any of these situations. They work like credit cards. You can borrow up to a specified limit whenever you want. You then must make at least the defined minimum payment each month — although you should strive to pay it off in full to avoid interest. At Fundvisor, we’ve helped many small business secure lines of credit that have helped them grow. However, we [...]
The Pros and Cons of Commercial Real Estate Mortgages
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Commercial Real Estate MortgagesBusiness is booming. You have strong cash flows, and you’re looking to expand. Whether you’re seeking new office space, a warehouse, or refurbishing an existing building, a commercial real estate loan may be your ideal funding vehicle. But finding the right new piece of real estate is hard enough without trying to understand the complicated commercial lending world. You can rely on the commercial real estate mortgage experts at Fundvisor. We’ll clear up the complexities of commercial lending and find the right funding source for you — after all, your time is best spent on business operations. We strive to ensure all of our clients are informed borrowers, so we’ve explained the pros and cons of commercial real estate mortgages below. Don’t hesitate to call us if you’re [...]
The Pros and Cons of Equipment Financing
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Equipment FinancingEvery business needs equipment to operate, let alone grow. Copiers, computers, desks, machinery, trucks, and appliances are just a few examples across many industries. As a small business, however, saving enough cash to buy or repair equipment outright can take years. That’s years of foregone growth. Expensive short-term debt isn’t your only answer, though. Equipment financing offers you an affordable way to purchase, repair, upgrade, or refinance your business’s equipment. At Fundvisor, we examine your balance sheet and recommend equipment financing based on your situation. Before we work together, we urge you to read about the benefits and drawbacks of equipment financing so you can be an informed borrower. Contact us if you think equipment financing is right for you. The Pros of Equipment Financing Predictable Payments Like many loans, [...]
The Pros and Cons of Hedge Fund Capital
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Hedge Fund CapitalSince you’re busy running your business, you may not realize the full spectrum of financing opportunities available to you. You may have heard of credit lines, term loans, SBA loans, and other conventional funding vehicles. However, you may not want to pursue these “traditional” loans — or you might be shut out of them due to falling short of lending standards. That’s where hedge fund capital comes in. Hedge funds consist of high-net-worth investors seeking specific investment opportunities with higher potential returns than traditional investments (such as publicly-traded stocks and bonds). Your small business may be able to attract the investment it needs from a hedge fund if you can demonstrate future earning potential. Fundvisor has a strong understanding of hedge funds, and we’re able to connect you with [...]
The Pros and Cons of Royalty Capital Funding
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of Royalty Capital FundingTraditional lending solutions don’t work for some businesses. Perhaps the company doesn’t meet the underwriting standards. Or maybe they do, but they can’t negotiate the terms that they want. If that sounds like your situation, you shouldn’t try to make it work. Instead, you can seek out alternative funding sources like royalty capital. Royalty capital funding is a financing method where you get capital in exchange for a slice of your future revenues. Of course, you’ll want to talk with an expert before you pursue royalty capital — both to understand if it’s right for your business and find lenders offering it. Fundvisor can examine your financial situation and determine if royalty capital funding suits your business. We also recommend reading our royalty funding pros and cons list below [...]
The Pros and Cons of SaaS Capital
Are you eligible for a better rate? Loan TypeTerm LoansSBA LendingLine Of CreditAsset Based LendingCommercial Real State MortgagesEquipment FinanceHedge Fund CapitalRoyalty Capital FundingSaas CapitalYearly RevenueUnder $100,000$100,000 - $250,000$250,000 - $500,000$500,000 - $750,000$750,000 - $1,000,000$1,000,000 - $2,000,000$2,000,000 - $3,000,000$900,000 And Above$3,000,000 And AboveTime in Business2 or more years1-2 years6 months - 1 yearStarting a businessCredit ScoreExcellent (720+)Good (680-719)Fair (640-679)Poor (639 or less) First NameLast NameEmail The Pros and Cons of SaaS CapitalThe software industry is fast moving away from one-off purchases into subscription-based models. This shift is helping software companies stabilize revenues with recurring income while driving down manufacturing/distribution costs. Plus, customers benefit from flexibility (they can pay less up front and cancel before costs eclipse an equivalent one-time purchase) and automatic updates as the software evolves. Although your SaaS company might offer an excellent product delivered almost entirely online, there’s room for more growth in this exciting space. Saas capital funding could be your ticket to this growth. Fundvisor USA can help you determine for sure if that’s the case. Below are the pros and cons of Saas capital so you can be as informed as possible when working with us. The Pros of SaaS Capital You’re Attractive to Investors [...]