Find the best small business loans of 2021

When you apply for a small business loan, it’s because your business has a financial need, either planned or unexpected. Whether you require additional working capital, want to buy out business partners or are looking to grow and expand your company, a small business loan can help.

Get Working Capital

Each business, no matter its size, experiences periods where working capital is tight. There are various types of small business loans that can help shorten these stretches without interrupting operations, including conventional bank and alternative business loans.

Keep Your Equity

Securing a small business loan can allow you to maintain equity and control of your company. In contrast, if you were to secure funding from investors, the investors might take control of your company, and you may need their permission to make business decisions.

When working with a small business lender, however,  you don’t need permission to use your funds. Use your business loan however you want, and keep any profits and gains that your business generates.

Create Long-Term Growth

To create long-term growth, you have to invest in your business continually. A small business loan can enable you to plan for the future without taking any working capital from your day-to-day needs.

Expand

Trying to capitalize on a new market? With a small business loan, you can secure the business location you need to widen your reach.

Follow 3 key steps to identify the best small business loan for you, one that’s right for your specific needs and financial profile.

Step 1: Examine Your Goals

To determine the best types of business loans for you, examine your goals and why your small business needs funding.

• Purchasing a piece of machinery?
• Need funding to get through the slow months?
• Renovating your storefront or office?
• Jumping on a hot business opportunity?

Depending on your unique goals, certain types of business loan financing may be better for you than others. For example, if your objective is to purchase seasonal inventory you intend to turn in 90 days, it’s not the best decision to take out a 10-year loan. Such loans for small businesses shouldn’t outlast the life of an investment.

In other instances, some of the best loans for small businesses are long-term options that have smaller monthly payments and lower business loan interest rates. The tradeoff for these perks is more stringent qualification requirements and a slower time to fund. If you need to act on a business opportunity fast, you may be better served with a short-term loan or advance.

• A look at your small business loan options

  If you demand speed, consider the following small business lending options:

  • Short-term loans
  • Business lines of credit
  • Accounts receivable financing
  • Merchant cash advances

  If you’re looking to finance a capital-intensive project, consider:

  • SBA loans
  • Term loans
  • Equipment financing

Step 2: Find the Best Small Business Lenders

When researching the best small business lenders for you, your selection will likely come down to two variables: your business’s financial profile and how quickly you need funds.

You can apply for a small business loan with one of the following types of lenders.

Banks

When applying for a small business loan through a bank, small businesses go through a multi-step process that can take as long as 6 months.

Business owners are asked to complete an application and meet with a loan officer in person. Sometimes you’re required to present a proposal for how you intend to use the funds – and how it’ll benefit your business.

When applying through a bank, their small business loan qualifications are high. If your credit score is below 660, you’re just starting out or your revenues are modest, your chances of securing a small business loan from a bank or credit union are slim.

Alternative Business Lenders

Alternative business loan providers have simplified and streamlined the application and approval process. Applying for a small business loan online can take minutes.

Plus, with alternative business lending, the approval and funding process is shortened from weeks to days. In fact, depending on the type of online small business loan you’re applying for, funds can be deposited the same day you apply.

Alternative business lenders and marketplaces like Fast Capital 360 that offer small business loans online are also willing to work with more small business owners. If you don’t have a lot of years as an entrepreneur or you’re working to repair your credit, you could still qualify for funding.

• Borrowing from Traditional Banks vs. Online Small Business Lenders

  Why consider an online lender over a conventional bank? Here are the advantages and disadvantages of working with both when you’re trying to get business loans:

  Banks:

  • Low interest rates and long terms
  • Strict qualification requirements
  • Lengthy and intensive application processes
  • Long time to fund (up to 6 months)

  Online lenders:

  • Higher rates and shorter terms
  • Flexible qualification requirements
  • Streamlined application process
  • Same-day funding

Step 3: Estimate What You Can Afford

The next step to identifying the best small business loan for you is to estimate what you can afford.

Determine how much capital you need to achieve your goals and how much you can afford to pay back. To do this, take a hard look at your cash flow. Compare your cash flow against the loan’s payback requirements.

Next, factor in any returns you expect to receive as a result of your investment. This is a great way to make sure you’re not taking out too large (or too small) of a loan.

Estimate How Much You Can Borrow

Small business loan requirements will vary depending on the lender and the program. While there’s no guarantee of approval, businesses with a good credit score, an established history and healthy revenues will qualify for the best business loan interest rates.

Credit Score

When you apply for small business loans, lenders use credit scores to determine eligibility. While a credit score of Good, Very Good or Excellent (670 to 800) will qualify you with some of the best small business lenders, there are still programs suitable for business owners with Poor to Fair credit (<580 to 660).

Time in Business

The number of years you have under your belt is another small business loan qualification factor lenders consider. In general, conventional lenders, like banks, prefer offering lending for small businesses that have been in operation for 2 years or longer.

Alternative business lenders offering small business loans online are more lenient when it comes to time in business. If you’ve been in operation for 6 months or more, you’ll qualify for most online lending programs.

Annual Revenue

When applying to get a small business loan, lenders will evaluate your average monthly sales and annual revenue. Funders use this data to determine how much of a loan an applicant qualifies for.

• Do you qualify?

  How to qualify for a business loan through Fast Capital 360 simply requires meeting the following minimum criteria:

  • You’ve been in business 6+ months
  • Your annual revenue is $75,000 or higher
  • Your credit score is 500 or better

We help business owners find the best online small business loans from the industry’s top alternative lenders, whose goals are to fund lending for small business success.