1. How can small businesses affected by the coronavirus outbreak get a loan?
To help small businesses affected by the coronavirus outbreak, President Trump announced that he instructed the SBA to extend low-cost capital to business owners through the Economic Disaster Injury Loan program. For up-to-date information on loans available for business owners affected by the coronavirus pandemic, you can refer to our guide here.
Business owners can also apply for other affordable loan products within the SBA loan programs now.
Additionally, individual states and cities are implementing financial measures to support small businesses, so you’ll want to check with your local business authority to see if there are options available for your business.
2. How do you qualify for a business loan?
Ultimately, the requirements you need to meet to qualify for a business loan will largely depend on the individual lender you’re working with and the specific loan product you’re applying for. Overall, however, lenders will likely first look at three metrics to determine whether or not you qualify—your personal credit score, your annual revenue, and your time in business.
Generally, the better your personal credit, stronger your annual revenue, and longer your time in business, the more likely you are to qualify for a small business loan—and one with the most desirable rates and terms. This being said, even if your qualifications aren’t ideal, there may still be options for you to consider. You can learn more about bad credit business loans here.
3. Is there a minimum credit score for business loan eligibility?
Lenders require different minimum credit scores for loan eligibility. Generally, however, you need around the following minimum credit scores to be approved for each type of loan: SBA loan: 640+, bank loan: 640+ but the higher the better, short-term loan from an alternative lender: 550+, equipment financing: 600+, invoice financing: not always required, but when it is, around 600.
All of this being said, to qualify for business loans with the best rates and terms, you’ll want to have a credit score of around 700. Learn more about business loan requirements here.
4. Is it hard to get a business loan?
There’s no single factor that determines how easy or difficult it is to get a business loan. On the whole, your business’s qualifications will dictate how hard it is to get a loan. If you have good credit, a few years in business, and a strong annual revenue, it shouldn’t be hard for you to qualify for an affordable loan. On the other hand, however, if you have poor credit, haven’t been in business long, and have low annual revenue, you’ll find it more difficult to get a small business loan.
Additionally, the type of small business loan you’re applying for will play a role in how hard it is to get. Generally, bank loans—which require top qualifications and lengthier processes—will be more difficult to get than other products, like invoice financing or a short-term loan. SBA and bank loans also offer the best rates and terms, whereas loans that are easier to qualify for will likely be more expensive.
Learn more about some of the easiest business loans to get here.
5. What is the fastest and easiest way to get a business loan?
There are some small business loan types that require minimal paperwork and can be funded in less than 24 hours. However, fast capital usually means more expensive capital. Although fast business loans are good options if you need funding quickly, we recommend giving yourself a period of time to shop to ensure you’re getting the best rate you can qualify for. If you do need funding fast, learn about the best quick business loan options here.
6. I have terrible credit. Can I still get a business loan?
There may still be financing options available to you even if you don’t have the best credit.
If you work with Fundera, we can perform a soft credit pull (that won’t affect your score) to determine what your credit score is and if there are lenders in our marketplace that you can work with. We can also offer tips and advice to help you improve your credit score to qualify for better loan products in the future.
7. How much is a small business loan?
A small business loan from an online lender can be as much as $500,000 in loan amount with interest rates as low as around 7%. However, small business loan amounts can go as low as $2,500, and interest rates can skyrocket to around 80%. SBA and bank loans typically offer the largest amounts. SBA loans, for example, can reach as high as $5 million in loan amount.
Ultimately, the amount of financing you qualify for and the amount it costs really depends on what type of business loan you’re applying to, and how qualified your business is.
8. What kinds of loans and rates can I get?
There is no one-size-fits-all answer for this. Every business is different and there are going to be a variety of factors that affect your eligibility. Generally, the longer you’ve been in business, the higher your personal credit score, and the more revenue you have means you’ll be able to access larger loan amounts and lower interest rates.
This being said, if you submit your business information through Fundera’s application, we can help you shop and compare your loan options—so that you know you’re getting the best possible product available to your business.
9. Is Fundera a lender?
Fundera is a marketplace and not a direct lender. We do not fund businesses nor underwrite loans. As a marketplace, we help you compare your loan options and connect you with the lenders best-suited for your business. We also simplify and expedite your loan search process by providing critical knowledge and expertise to ensure you have everything you need to get the best small business loan.
10. Will applying affect my personal credit score?
Fundera uses a soft credit pull to see which lenders are the best match for your business, so this will not affect your credit score. Once you’re going through the actual business loan application process, some of our lenders may perform hard pulls on your credit, but these tend to happen at the final stages of the process, when you are reviewing or accepting offers.
11. How do I know my financial information will be safe?
In order to work with some of the lenders we have relationships with, we have to be audited and pass inspection. Although we are not a bank, we have invested heavily to not only meet partner requirements, but also ensure our customers’ information is as secure as possible.
Last Updated: April 06, 2020