6 Types of Large Business Loans to Drive Business Growth

As enterprise executives know better than anyone, behind the scenes it’s essential for cash flow to flow, and for working capital to be working. If you’re aiming to either launch or grow a business, securing a business loan can be a key step in accessing the necessary funds to realize your aspirations. However, a common question arises: what is the maximum amount you can obtain through a business loan?  Fortunately, whether the plan is to fund an expansion, launch a product line, purchase equipment and inventory, onboard new team members or support any strategic investment, there are several types of large business loans that can drive an enterprise onward and upward. Here’s everything you need to know if you want to find the best large business loan for your business:

How Large of a Business Loan Can You Get?

Typically, small business loans, SBA loans and business lines of credit max out at $5 Million, while financing needs that require large amounts of capital such as purchasing or expanding commercial real estate offer up to $10 Million.  The answer depends on the scale of your business goals, and how you wish to use borrowed funds to accomplish them. Some types of large business loans can get as high as $15 million. 

What Are the Most Common Types of Large Business Loans?

Some of the most common types of large business loans that you can get include:

SBA Loans

SBA loans are one of the most sought-after types of large business loans on the market, and for good reason.  Boasting prime rates, term lengths of 10-25 years, offers up to $5 million, and a personal guarantee from the federal government, these are some of the biggest small business loans offered by the the Small Business Administration.  However, there’s a few downsides that typically come with them too, including an infuriatingly long time to funding (6 months or more on average through banks), and the gaps in funding that occur as a result. 

Commercial Mortgage Financing

Commercial mortgage financing is among the most common types of large business loans that you can get for your enterprise.  With competitive rates, large amounts of up to $10 million, and flexible terms of up to 25 years, commercial real estate funding options are the perfect big business loans to purchase or expand business property without breaking the bank.  These flexible terms ensure that small payments are made over longer periods of time to accommodate any and all small businesses’s needs. The property being financed usually serves as collateral, securing the loan.

Franchise Financing

Next on our list of types of large business loans is franchise financing. Small business loans that specialize in financing both franchise renovations, as well as purchasing an additional franchise location.  This is a great funding option for any franchise owner needing to making mandatory franchise changes, as well as those with an opportunity to expand or relocate to a better location! Loan terms can vary widely based on the lender, the strength of the franchise brand, and the borrower’s creditworthiness. Terms can range from short-term loans of a few years to long-term financing options extending up to 10 years or more.

Small Business Loans

Small business loans are only called small, but it is not a coincidence that they are among the best types of large business loans for enterprises. They can fund a working capital loan as a cash infusion that is paid back on a regular basis (typically monthly).  These types of big business loans aren’t secured by collateral, and an enterprise doesn’t have to be profitable or cash flow positive at the time of application to get approved.  Limitations, such as bad credit, open tax liens or industry restrictions, can be overlooked by some lenders to get a working capital loan. Furthermore, the application process itself is streamlined and fast, with some lenders approving applications in less than 24 hours.

Accounts Receivable Financing

Speaking of the best types of large business loans, accounts receivable financing is a form of asset-backed financing in which receivables are used to secure a financing agreement. Essentially, it’s a way for enterprises to get early payment on outstanding invoices and purchase orders.  This way if payments are delayed, the enterprise still has the funding it needs to continue operations. Then, when payments come through, customers pay the lender directly, who keeps the principal and interest (specified per the financing agreement), and remits any remaining funds to the enterprise.

Business Lines of Credit

A business line of credit is more suitable for either short-term funding needs — such as to cover a higher-than-expected tax bill, emergency facility repair costs, and so on. Like a working capital loan, the amount borrowed is typically paid back monthly until settled.  However, many enterprises apply for a business line of credit before they need it. Since they only pay interest on the amount they borrow, these enterprises like to have a lifeline in case a short term funding need arises. Limits can range widely, from a few thousand to millions of dollars, depending on the lender and the financial health of the business. Business lines of credit are the most common types of large business loans. 

Getting Large Business Loans With Banks

Hold up. Before you get swept up by their grand promises, there’s a couple big things you need to know about bank loans before you move forward.  One is that, when it comes to speed, traditional lenders always end up dead last. When it comes to approval, only the richest, oldest, and biggest corporations pass through. Don’t worry, you’ll get there – but until then, big business loans are what will get you there fastest.  You may have noticed that bank loans aren’t included in the list of preferred big business loans — and there are several reasons for that!  Many enterprise CFOs and other executives view banks as “lenders of last resort,” because banks impose an excessive amount of red tape and rules.  For example, during the life of the loan, enterprises may be banned from issuing any new debt, participating in share offerings, acquiring new companies, and so on. And that’s just the start.  Because in addition to the restrictions above, many banks (or more specifically, their army of securities lawyers) establish clauses that send the interest rate surging if certain things happen during the life of the loan, such as the CEO leaves, the stock price falls below a certain threshold, etc.  Plus, all bank loans must be secured by collateral, which is an arduous process that can take several months.

How to Get Large Business Loans

1. Get your financials in order
2. Make a list of all assets you feel comfortable leveraging as collateral
3. Have a FICO of at least 620
4. Make gross annual sales of at least $100,000.
5. Be in business for at least 6 months
6. Call your Business Financing Advisor for a free consultation before moving forward (you can reach one for free at 877-482-3008)
7. Apply by filling out an online application. Information required includes your name, phone number, email, business name and address, your intended use of financing, and your desired loan amount.
8. Receive funding-applicants can typically access funds as soon as 24-72 hours after applying.

If your enterprise needs fast financing to cover a short-term expense or a long-term investment, contact National Business Capital today. We’ll provide you with a clear, in-depth overview of our big business loan options and help you make an informed choice to drive your enterprise upwards and onward! 

How to Get a Larger Business Loan Amount?

To increase your chances of qualifying for any type of large business loan, it’s crucial to submit a robust application. This involves having a strong credit score, a history of profitability, a high Debt Service Coverage Ratio (DSCR), and a low Debt-to-Income (DTI) ratio. If a loan isn’t immediately necessary, focus on improving your personal and business credit scores. You can do this by consistently paying debts on time, lowering your credit utilization ratio, and correcting any inaccuracies on your credit report. Moreover, broaden your search to various lenders and loan types. For instance, online lenders often have less stringent criteria compared to major national banks. Another strategy is to offer collateral for your business loan. This can enhance your borrowing capacity, as collateral reduces the lender’s risk, possibly allowing you to secure a higher loan amount. However, it’s crucial to borrow responsibly. Overborrowing can lead to serious repercussions, like loss of collateral and credit damage, if payments are missed.  Before agreeing to any terms, use a business loan calculator to estimate your payments under different loan amounts, repayment periods, and interest rates. This will help you make a well-informed decision.