How Can You Apply for Small Business Loans? Take Your Business to the Next Level

Whether your small business is growing or facing a challenge, you need cash to cover the expenses. Finding the best small business loans gives you the resources you need to pursue opportunities or solve problems.

Unlike selling equity, getting a small business loan allows you to maintain business ownership, profits and full control.

There are countless fast small business loans available on the market today, but to truly invest in your future, you need the right one.

Our 75+ lender marketplace puts all your options in one place, allowing you to compare them with expert guidance and only apply one time.

Applying is fast, simple, easy, and doesn’t affect your credit score.

Why Cash Flow Is Important—and Most Businesses Need a Boost

Cash flow is like the oxygen of your business, and small business loans are a great way to get more of it.

When cash flows smoothly, you can cover all of the essential expenses in your business, including payroll, operating costs, and other bills. More importantly, though, positive cash flow allows you to pursue new growth and expansion opportunities in your business.

At some point, all businesses face cash flow challenges like seasonal slowdowns and late-paying customers. Business credit cards and personal loans generally don’t provide enough cash to accomplish what you need to. You could find yourself in a situation where you’re struggling to:

• Pay your employees
• Hire new workers
• Pay for inventory 
• Manage office rent or mortgage payments
• Pay for supplies 
• Finance operating costs
• Cover utility expenses
• Pay taxes

When you’re set on growing your business, it’s important to have enough working capital to stay ahead of the competition and not fall behind.

How to Use Business Financing to Grow Your Business Easier & Faster

Every owner wants to grow their business, but doing so requires money.

The only ways you can grow your business are reinvesting profits, raising equity, or using small business loans (or another business financing option).

At first glance, reinvesting your profits is the cheapest option. But with working capital covering every cost, it can take years for you to reach your goal.

Utilizing small business loans for startups and other types of businesses can actually be more profitable for your business in the long run. You can obtain cash to cover all growth-related expenses right away, putting you on track to boost revenue as soon as possible.

Here are some of the ways financing can help your business.

What’s the Easiest Way to Get a Business Loan?

You can apply at a bank, but you know that’s not easy. That’s why you’re here—to find an easy way to get a small business loan.

Banks aside, there are many other small business lenders, which makes finding the best option for you even more confusing.

Every lender offers different programs with varying interest rates, term lengths and funding amounts.

Online marketplaces like National simplify and speed up this process.

Our industry-leading marketplace brings the best small business lenders together in one place, making it easy for you to apply, compare options, and ensure you choose the right loan.

The entire process takes place electronically, meaning you don’t have to take time out of your busy day for a meeting. You can also submit required financial information online.

What Do You Need to Be Eligible to Apply for Small Business Loans?

To apply for small business loans, the first thing that you will need to consider is the lender. Lenders may have different guidelines, requirements, and application processes. With National, you can apply for small business loans online by filling out a 60-second application form,  and select from multiple loan options within our marketplace. 

Showing a profit helps, but is not always essential to receive financing. We focus on your business’s potential, rather than your history.

What’s the Minimum Credit Score Required for a Small Business Loan?

Most lenders, especially banks, will want to see a minimum credit score of around 680. This is also typically the requirement for SBA funding as well. Of course, having higher credit can boost your approval odds and help you access better interest rates.

If your credit score is less than 680 or your business is fairly new, it’s possible your financing application may be rejected by a bank. But before you get too discouraged, it’s helpful to keep in mind that not all small business lenders have a minimum credit score requirement.

Bank rejections can be discouraging, but not all small business lenders have a minimum required credit score.

At National, you can find options regardless of your credit score. We have programs for small businesses with good credit, bad credit, and everything in between.

Instead of focusing only on your business and personal credit scores, we consider your annual revenue, and how your new opportunity could help you grow.

How to Get a Credit Approval for Your Small Business Loan

Getting a credit approval for a small business loan is no longer the tedious process it once was. New fintech platforms have expedited this process to make it faster and easier for you.

At National, our streamlined digital application entirely eliminates the need for any paperwork. In order to qualify for funding, you’ll only need to show a minimum of:

• 1 year of business history
• $120,000 in annual revenue
• 580+ credit score requirement

We work with a wide variety of lenders that maintain options for all different types of credit scores. The application process is also fast and secure. Once you complete the online application, simply connect your bank accounts through our bank-grade security portal - and your information will be verified automatically. 

Finding the Best Available Loan Programs

To choose the best loan offers, start by identifying your financing needs. The best options for you might differ if you are looking for funding to grow your business, purchase inventory or to pay debt. Ideally, you should begin your research in a marketplace where you can compare multiple options at the same time.

In today’s world, there are countless financing and loan programs available at your fingertips. But even though some of these loan programs are fast and easy to qualify for, they may not be the best.

Every lender offers different programs, and every business has different needs. It’s important to start your search for funding options with your needs in mind.

Direct lenders provide only a limited number of options. If you apply through a direct lender, you limit your potential to find the best option on the market.

Applying through a marketplace allows you to access options from numerous lenders, instead of just one. For example, National’s marketplace offers options through over 75 small business lenders.

In addition to small business loans, online marketplaces also offer other financing options.

You can find SBA loans, which are backed by the federal government through the Small Business Administration. Often, applying through a marketplace makes this a faster and easier process than applying through a bank.

You can also find other options, such as a business line of credit, merchant cash advances, and equipment financing.

By considering multiple options, you can choose the one that best fits your business and goals.

What Are Secured & Unsecured Business Loans?

The difference between secured and unsecured business loans is simple. Secured business loans require collateral, such as real estate, heavy machinery or other assets, while unsecured business loans don’t require any collateral as a guarantee for being able to pay the loan. 

With secured business loans, the borrower agrees to give the lender an asset or piece of property if they’re unable to repay their debt. Collateral can make the financing process less risky for lenders.

Banks and other lenders have more certainty that they will get their money back, in the event you default. This can translate to lower interest rates, higher funding amounts, and better terms for borrowers. 

Typically, traditional banking institutions will require your loans to be secured with collateral, like real estate or heavy machinery.

Unfortunately, borrowers face additional risks with secured business loans. In case you are unable to meet your debt obligations, you could risk losing the asset you’ve put up as collateral. 

In the modern business financing world, however, you can find small business loans without collateral.

If you have collateral to back your small business loan, then you can choose to put it up. If not, then you can still find financing options. We can help you find either option within our marketplace.

How You Can Calculate Small Business Loan Interest Rates

To calculate the interest rate on a small business loan, lenders will consider your requested loan amount, financial history, annual revenue, and more. But when you get a small business loan, you need to consider more than just the interest rate itself. You also need to consider the total payback amount.

We created this easy-to-use small business loan calculator specifically for small business owners considering the full price of taking out a loan.

By entering your estimated interest rate, loan amount and term length in months, you can calculate your estimated monthly payments. Then, you can calculate your total payback amount by multiplying the monthly payment by the number of months.

Small Business Loans 101

Small business loans function a lot like personal loans, although they serve a different purpose—they’re only meant for small businesses.

If you’ve ever taken out a loan, such as a student loan or mortgage, then you probably already understand how they work. The lender provides you, the small business owner, with capital for a need. As the borrower, you’ll then repay the balance of the loan, plus interest

Depending on how and where you borrow, different financing products come with different terms. You may make payments based on a fixed interest rate in some situations, and with a variable interest rate in others.

Owners use the extra cash from small business loans to cover any expenses, whether they're solving a challenge or pursuing an opportunity.

Curious about how small business loans could work for your company? Speak to a Business Financing Advisor at National to learn more.

FAQ

Is it hard to get approved for a small business loan?

It depends. Some lenders can be more difficult to get approved for. For example, banks and SBA loans tend to feature the strictest requirements. However, online lenders are more lenient and more likely to offer a wider range of small business loans.

Can an LLC get an SBA loan?

Yes! SBA loans are meant for small businesses - so there’s no reason why your LLC would be automatically disqualified. You will, however, have to meet the SBA’s size standards in order to get an SBA loan.

What is the minimum SBA loan amount?

SBA loans don’t typically feature a set minimum amount. Funding is typically capped at $5 million - but SBA microloans are designed for smaller funding amounts. In some cases, it may be possible to secure an SBA loan of only a couple of thousand dollars.

Can you apply for an SBA loan twice?

There's no limit to how many times you can apply for an SBA loan. However, if you’ve recently been rejected from SBA financing, you may want to hold off on applying again until your credentials improve. You can also seek out financing options from online lenders, which are known to be more flexible. 

How much of a down payment do I need for an SBA loan? 

SBA loans typically require a down payment of 10% of the loan’s total value. This is true for both 7(a) and 504 loans - however, your business’s financials can also affect the total down payment amount. In some cases, it may even be possible to secure SBA financing without a down payment.