A $100,000 business loan can be all that it takes to launch your small business to the next level. With extra working capital, you can take the next step forward in growing your business instead of letting cash flow hold you back. It could mean the difference between staying where you are and the growth you’ve been striving toward.
These funds can be used to purchase new company equipment, pay off outstanding bills, or cover working capital costs. Ultimately, you can put funding toward anything you need to grow.
But if you’re new to the business financing world, learning how to get a $100K business loan can seem complicated. Fortunately, the process is actually quite simple – depending on the lender you work with.
How to Get a $100K Business Loan
Qualifying for the funding you need doesn’t have to be a difficult or time-consuming process. In fact, the process of applying for a $100,000 business loan is similar in nature to most business loan applications.
However, because the amount of the loan is significantly larger than smaller loans of only a few thousand dollars, the qualifications can be slightly higher than for smaller loans of only a few thousand dollars. Regardless, you can qualify for a $100K loan even without a sky-high credit score or collateral.
Depending on your needs and situation, there are various ways you can apply for a $100,00 business loan. Two of the most common methods of getting a six-figure business loan are applying through a bank and consulting an alternative lender.
While the deposit you’ll receive in your account might be the same, the process, documentation, and turnaround time can vary. Banks tend to have a stricter application process, while alternative lenders are more lenient in terms of loan qualifications and requirements.
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How Do You Qualify for $100k Business Loans?
To qualify through an alternative lender, you generally only need to meet a few basic requirements:
- $120K in annual sales
- 6 months in business
- No minimum credit score
Even if you’ve hurt your credit score as you grew, most lenders will still consider you for financing. Instead of your history, online lenders are more concerned with the opportunity ahead and how financing could change the game.
While various lenders have different procedures, you can usually expect a fast, simple, and easy process. After applying, you can normally skip the documentation by instead connecting your bank accounts digitally. This saves the time and effort of compiling paperwork about your business.
While getting a $100K business loan might be easy, remember that it’s not the limit. At National, you can speak with a Business Finance Advisor who can inform you about other, potentially larger options.
$100,000 Business Loan Requirements from a Traditional Lender
Unlike alternative lenders, qualifying for a six-figure business loan from a bank can be difficult and time-consuming.
In order to qualify for a $100,000 business loan, you must be able to prove your eligibility. For banks, this means providing a number of important documents. Some of these documents will be related to your finances, whereas other documents are regarding your business information, revenue history, internal company operations, and more.
Here are five of the many requirements associated with getting a $100,000 business loan:
- High Credit Score: To get approved for a large loan, you will need high personal and business credit scores. In addition to a strong credit score, borrowers must also possess a history of submitting payments on time and several mixed sources of credit (auto, mortgage, credit cards, etc.). If you don’t have a credit score of 680 or higher, then you won’t qualify for bank financing, regardless of the amount you request.
- Financial & Legal Documents: Some of the financial and legal documents that you will need to show a potential lender include a copy of your driver’s license/ID, business licenses, balance sheets, and bank statements. Consult with potential lenders ahead of time to determine which documents you will need when it’s time to apply for your loan.
- Articles Of Incorporation: Before applying for a $100,000 loan, your business must be incorporated as an S-Corporation, a C-Corporation, or an LLC. In order to get approved, you must be registered as a for-profit business and bring proof of your incorporation. If you aren’t already registered, you will need to register for business incorporation prior to submitting a loan application. If you are in a rush and need to quickly incorporate your business, consider utilizing reliable business incorporation services.
- Detailed Business Plan: How are you planning to use a $100,000 loan to grow your business? Create a strong business model which outlines your goals, plans, and other information regarding your company’s income history and how long your business has been in existence.
- Collateral: Whether or not you are willing to secure your loan with collateral, like real estate or equipment, may determine if you’re accepted or rejected by a lender. Secured business loans require collateral as a form of security deposit. Unsecured business loans do not require collateral but may require you to sign a personal guarantee to ensure you will pay back the loan.
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How Do You Get Approved for a $100k Business Loan?
Borrowers reach an approval with lenders after they’ve met/exceeded their minimum eligibility requirements, provided the relevant documentation, and proven that they don’t pose a risk of default. Here are a few tips on how to get approved for a $100k business loan or another type of financing.
- Meet/exceed minimum qualifications
- If your credit score is low, consider proactively strengthening it
- Come prepared with requested documentation
- Act truthfully throughout the process
- Have a solid, well-thought-out business plan for how you intend to invest your financing
Remember – An approval is merely an idea until you’ve finalized the contract and received your funds. There’s room for negotiation on most contracts, so borrowers can potentially tailor their terms to their specific needs. It isn’t always possible, but it’s worthwhile to ask about it nonetheless.
How Can You Use Your $100k Business Loan Funds?
You can use your business loan for almost any business purpose, including:
- Cover Expenses
From payroll to operating costs, your business loan can help cover lingering expenses and free up cash flow for other investments.
- Purchase Inventory
Having enough inventory to meet demand can be a challenge, but a business loan increases your purchasing power and, in turn, allows you to make larger inventory orders, capitalize on bulk inventory discounts, and prepare for busy seasons.
- Bridge Seasonal Gaps
Whether you’re starting a slow season or just coming out of one, a $100k business loan can provide the funds you need to manage cash flow and make necessary investments. Instead of worrying about how you’ll serve your customers with the funds you have on hand, you can tackle challenges and take advantage of opportunities with confidence.
- Purchase New Equipment
Outdated or aging equipment can lower your efficiency and, if it needs repairs, cost more than it’s worth. By leveraging a business loan, you can purchase the equipment your business needs to operate at its highest capacity while managing the cost over time.
- Invest in Technology, Marketing, and Training
Tech, marking, or training investments might not seem feasible with your current cash flow situation, but a business loan gives borrowers an opportunity to take them on and improve their business processes. Technology increases efficiency, marketing extends your reach, and training ensures your team is operating at its highest capacity day in and day out, all of which can help you take a giant leap forward as a business.
How Do You Get a $100k Business Loan With Bad Credit?
Traditional lenders require borrowers to meet a certain credit score minimum before approving them for financing. They do this to mitigate their risk of financial loss, as borrowers with less than favorable FICO scores are seen as inherently risky. However, there are ways around it.
Non-bank lenders don’t hold credit scores as highly in their eligibility requirements compared to banks and credit unions. Instead, they look at a business’s cash flow to determine eligibility and impose higher interest rates to manage their risk.
While the higher cost of capital may alarm you, consider that the interest rate on your financing matters little when you invest the funds in revenue-driving opportunities. In other words, paying $5,000 in interest isn’t as bad when your investment yields an extra $4,000 monthly in revenue.
Apply for a $100,000 Business Loan With National Today
If your business is growing, then why wait to get the cash you need? Here’s what to expect when you choose to work with National for your $100k business loan.
- Apply Securely Within Minutes – Move through our streamlined application within minutes and upload your business documents with zero risk.
- Review Your Offers – Compare your offers with expert advice from our team and select the best one for your specific circumstances.
- Get Funded – With your money in hand, you can take advantage of opportunities and tackle challenges with confidence.
To get a $100,000 business loan in the shortest amount of time with limited paperwork and the best terms as quickly as possible, call National Business Capital at (877) 482-3008. Or, fill out our 60-second online form.