Whether you need a working capital loan or want to buy a new factory, there are business loans available for your goals. For example, you may want to get a secured loan in order to get a lower interest rate. If your business does not own anything valuable, you may have to use an unsecured loan instead. By picking the right kind of loan for your goals, you can enjoy having a faster, easier application process.
What Is the Easiest Business Loan to Get?
There is a large variety of business loans and financial products you can choose from. Other than loans from the Small Business Administration (SBA), you can apply for business lines of credit, term loans, equipment financing, business acquisition loans, credit cards, startup loans, merchant cash advances and short-term loans. No matter what kind of loan you get, the lender will consider your credit score, business history and revenue.
1: Startup loan: Startup loans are the only option where lenders do not care about your time in business or revenue. Because your business is so new, they only look at your personal credit history. These loans are generally easy to qualify for if you have good credit and can be used for all of your startup expenses.
2: Short-term loan: If you want quick cash, you can get a short-term loan within days but interest rates are typically higher.
3: Merchant cash advance: A merchant cash advance is based on your future earnings. Basically, the lender gives you capital today in return for a percentage of your future revenue.
4: Business credit card: A business credit card functions just like a typical credit card, so it is a fast way to access capital when you need it.
5: Accounts receivable financing: You can use this option if you have a lot of unpaid invoices. Your company essentially borrows money for working capital based on the amount your customers currently owe you.
6: Equipment financing: If you just need money to buy new equipment, equipment financing is an excellent option. You can generally get equipment financing in a short time frame.
7: Business line of credit: A business line of credit gives you capital whenever you need it. You only have to pay interest on the amount you actually use. Qualifying for this type of loan normally requires a minimum 680 personal credit score.
8: SBA loan: SBA loans can take a few months to complete, but they generally offer excellent loan terms and rates.
9: Business acquisition loan: If you want to buy an existing company, you can apply for a business acquisition loan. The application process for this kind of loan can take several months to complete.
10: Business term loan: This kind of loan allows you to get a lump sum right away. Afterward, you have to make a fixed series of payments until the loan is paid back.
11: Commercial mortgage: Whether you are buying a new restaurant, expanding a current business or purchasing a new office, you can get a commercial mortgage to cover the costs if you have money for a down payment.
In scientific studies, researchers have found that 29 percent of companies fail because they ran out of capital. A 2019 study showed that just 48 percent of small businesses have their current financing needs met. This means that about half of companies do not currently have the capital resources they need.
The right business loans can help companies achieve their short-term and long-term financing goals. In general, you will need to show your time in business, credit score and revenue when you apply for a business loan. Once your loan is funded, you can use it to support your company’s financing needs and long-term success.