Your Best Options for Large Business Loans
Dose your firm require a Sizable or Large Business Loan? Havelet Finance Limited have best options for more significant loan amounts. Obtaining $500,000 to $5M serves various functions for small business owners, ranging from purchasing new equipment and real estate retail space to expanding their operations.
A small business can obtain a large business loan. Find out if you qualify for a large loan and if it would benefit your business if you did. Become familiar with four types of large business loans so that you may ensure that you have what you need to succeed. Learn about small business loans, lines of credit, and other options for financing your company’s growth or covering any unanticipated expenses.
When to Look for Large Business Loans
Some businesses only need small influxes of cash to grow their companies or at least keep them stable. These businesses have options in short-term loans, SBA microloans, shorter-term lines of credit, and so on. But for some businesses, a small amount of capital just isn’t enough to make the major differences in their business that they’re looking for. Below are some of the reasons a business might rightfully need a large business loan.
Who Qualifies for Large Business Loans?
If you’re hoping to make a big purchase soon or grow your business in a meaningful way, like by expanding to another location or adding a product line, then you’re probably in the market for a large business loan. Whether or not you’re qualified for one, though, might be a different story. Well, here are some qualifications that indicate that your business would be a great candidate for a large business loan.
- Most businesses that qualify for large business loans have been in business for years and have a well-established track record.
- While most lenders offering large business financing are only willing to work with businesses that have been operating for at least two years, the more experience you can show, the better.
- The longer you’ve been in business the less risky of a customer you seem to be, especially if you have a positive business history to show off to potential lenders as well. On the flip side of this, smaller and newer businesses pose a greater risk and are therefore less likely to get funding.
- Given the high risk that a new business fails, lenders will be hesitant to extend a large business loan that would be repaid over a multi-year term. There’s a higher chance that they’d never get their money back.
- In general, companies that qualify for large business loans have very strong financials — more specifically, they have strong revenues to show potential lenders.
- If these lenders are offering you large business loans, they’ll need to be confident that you have the financial capacity to pay back such a large sum of money. For instance, a lender would never approve you for a loan larger than what your average annual revenue is. Based on your past history, you’d never bring in enough money to fully pay off the loan. For this reason, many lenders will only approve borrowers for a small percentage of their revenue.
- In general, only financially healthy businesses will qualify for large business loans.
Strong Credit Scores
- Another measure to see whether you’ll likely repay the financing is your personal and business credit history.
- If you have a long history of paying your personal and business debts on time, then lenders can be confident that you’ll end up paying back the business loan on time and in full.
- However, an indication of the opposite will likely preclude you from qualifying for large business loans.
- Business owners who qualify for large business loans also typically have many valuable assets to their business’s name.
- Having collateral to offer against the financing can make it easier to qualify for larger business loans. Having collateral to offer gives the lender some security that, even in the worst case that you can’t pay back your loan, they’ll still be able to get their money back. (In this scenario, they can seize your collateralized assets and recoup their losses.)
Please note that Havelet Finance Limited makes all types of loans easier for our clients when it has to do with collateral. We require a written notarized promissory note for repayment of the loan. So, that is a soft landing for all our respective borrowers.
What Are the Best Types of Large Business Loans?
Think you might need and qualify for a large business loan? The next step would be to start looking at your options and seeing what might be available to you. Most of the loans will fall into the following general categories.
Traditional Bank Loans
Traditional banks are the go-to option for large business loans.
Commercial banks offer term loans and lines of credit that can reach up to the millions of dollars for small business financing.
Plus, these bank loans typically come with long terms. This means that, even though you’re taking on a very large amount of financing, you’ll have lower, more comfortable monthly payments to pay the loan back.
And best of all, traditional bank loans come with the lowest interest rates on the market for small and medium-sized business owners.
While traditional banks are the best places to go for large business loans, there is one thing you need to know:
- Bank loans are extremely hard to qualify for, especially after the 2008 recession. If you aren’t a very established business with impressive financials and a very strong credit score, it’s likely that a bank loan won’t be an option for you. Havelet Finance Limited says yes when the traditional banks declined your loan application.
A better option for business owners looking for large business loans is to pursue loans backed by the Small Business Administration, also known as SBA loans. They’re actually loans issued by traditional bank lenders but guaranteed by the SBA. This means that the SBA guarantees a percentage of the value of a bank loan issued specifically to small business owners.
By guaranteeing the large business loans offered by banks, the SBA makes it easier for small business owners to access this type of large, long-term, low-rate financing. In the end, the SBA is removing the risk of lending to the small businesses that banks typically try and avoid. If the small business owner defaults on the loan, the bank will recoup the majority of their money from the SBA. The SBA guarantees loans from a few different loan programs. The two largest loan programs offered by the SBA are the 7(a) loan program and the 504/CDC loan program.
- Loans from the 7(a) program are the SBA’s most popular and general financing option.
- These loans can be used for a wide variety of business purposes — from purchasing a new business to covering working capital needs.
- The 7(a) loans are certainly large business loans: The amount of the loan can be up to $5 million, with terms lasting as long as 25 years for specific financing purposes. Rates for 7(a) loans vary depending on the SBA lender you’re working with, but will never exceed the SBA’s determined maximum. The SBA loan rates are tied to the market Prime Rate and will be very favorable.
- While 7(a) loans are great for general business purposes, 504/CDC loans offer a specific type of financing solution:
- These loans are meant for financing the cost of major fixed asset purchases — like commercial property purchases and renovations, or large equipment purchases. But 504/CDC loans are some of the most complicated and specific financing methods out there. If you’re looking for a loan for a major fixed asset need, and need large business loans, then a 504/CDC loan could be the right fit. Plus oftentimes, these loans don’t come with a set maximum amount.
Medium-Term Loans from Online Lenders
If you’re looking for large business loans, bank loans or SBA loans are typically your best options out there.
However, these loans are very difficult to qualify for. Only the most eligible business owners get them. If you aren’t quite there yet, you still have options — like a medium-term loan from an online lender.
These lenders are non-bank, alternative financing companies that offer loans that are almost exactly like traditional term loans from banks, with a few notable differences:
These loans are typically smaller, going up to around $500,000, and they come with a slightly shorter term than bank loans or SBA loans do, ranging from one to five years.
The good news, though, is that they’re more accessible than bank loans or SBA loans, so if you need a large business loan but don’t qualify for the most premium options, these lenders could meet your needs.
The only catch: You’ll pay for the accessibility (and speed — these lenders work much faster than banks or the SBA) with slightly higher interest rates. Whereas bank loans and SBA loans have rates that stay below 10%, medium-term lenders charge rates ranging from 6.5% to 30%.
The Top Lenders Offering Large Business Loans
If you think a bank loan is in the realm of possibility for you, then look no further. You could try your local bank, or go for a larger national bank, but the bank you already have an established relationship with will probably be your best bet. If your business isn’t quite ready for a bank loan, then you may have decided that you need to apply for an SBA loan or a medium-term loan instead.
Here are the lenders offering these large business loans for you to check out.
A respected term loan lender in the online lending space is Funding Circle. Funding Circle offers medium-term loans that go as large as $500,000. Terms range from six months to five years, with interest rates set between 4.99% and 27.79%.
To qualify with Funding Circle, you’ll need at least a 660 credit score, $150,000 in annual revenue, and at least two years in business.
Another option to explore is Fundation, which offers large business loans in the form of term loans structured similarly to bank loans, but with bi-monthly repayments. Foundation loans go as high as $500,000, with terms of one to four years. Interest rates will be low, ranging from 7.99% to 28.99%.
To qualify with Foundation, you’ll need at least $100,000 in annual revenue, a minimum credit score of 620, and at least two years in business.
Havelet Finance Limited is available at all times. We give our clients the best and optimized strategies to get a genuine large business loan. to get started, contact us below;