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Small loans for business

how to secure a loan

There are many factors to consider into answering the “How do I secure a small loan for my business?” question, but the bottom line can be broken into two simple parts: business cash flow and personal credit.

If you can show consistent revenue, good working capital management and a disciplined financial approach coupled with a good FICO score, your chances of obtaining a loan are high.

In the case of SBA loans you would be required to be a for-profit business, do business in the US, have time or money invested in the business and a well thought out plan that meets their definition of a solid business. You have to demonstrate excellent personal credit, adequate collateral, and strong business financials. Anyone owning 20% or more of the business should be willing to sign a personal guarantee, even though not all SBA lenders require one. Beyond the above, there are a variety of SBA loan requirements which you can find for a specific type of business in the SBA website.

SBA loans can take months to obtain and are by far the hardest financing a small business can access. Term loan requirements are not as stringent or cumbersome but it does help having a solid foundation and a good financial record to access such instrument. Term loans is a broad subject and there are many different types and flavors, but in essence they're easier to obtain than SBA loans and require a lot less time and documentation.

Another very good option is to obtain unsecured capital through a merchant cash advance provider. These types of instruments can be accessed within days of applying given that certain minimum requirements are met. This type of financing is meant to be used as a short term instrument (less than a year) and is smartly used as a bridge while lending conditions are secured. For example, if you need the cash for a good opportunity and have to close within a week, you can apply for an MCA, secure the deal and at the same time apply for a term loan or an SBA loan and repay the cash advance in a few weeks or months.

If you are considering an SBA loan but the cash is needed right away you can always apply for a short-term merchant cash advance and secure the opportunity while you receive a longer term loan and repay the cash advance which usually don't have repayment penalties. If you would like to find out more about securing a term loan or accessing cash for your business give us a call at (855) 262-2996 or visit LendrzHubwhere we can help with your financing needs.


LendrzHub Editorial