If you aren’t looking to take your business to the next level, these tips aren’t for you.

Still reading?

Then stop listening to the advice of business owners drowning in debt and follow these 10 Tips developed by industry insiders.

If you do, the results will amaze you.

Top 10 Tips on choosing
the best small business loans

  • $5,000
  • $10,000
  • $25,000
  • $50,000
  • $75,000
  • $100,000
  • $250,000
  • $500,000
  • $1,000,000
  • Purchase Inventory
  • Run payroll
  • Invest in Marketing & Advertising
  • Purchase New Equipment
  • Hire Additional Staff
  • Renovations
  • Open an Additional Location
  • Overtake the Competition
  • Long Term Growth
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1

What do you need the working capital for?

Ask yourself this question:

What is the underlying reason you are looking to borrow money? Is it to
purchase inventory, expand, pay a bill, cover payroll or something else?

There are many different reasons why you would need to borrow capital for your business.

Knowing what the capital will be used for will help you decide which financing options are the best small business loans for your business.

Take your time. Think it through.

Choosing the right business loan is key in meeting your business goal or objective.

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2

Calculate how much capital will it take to achieve your objective.

Borrowing more money than you need can overburden your business while not borrowing enough can make the outcome of the project fail.

  • Get a few estimates.
  • Compare them.
  • Get a better understanding of how much it will actually take to get the job done.

Making an educated decision will help avoid placing an unnecessary burden on your business and its cash flow.

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3

Know Your Personal and Business Credit Score.

Knowing your personal and business credit scores will help you understand what you can qualify for.

If you have less than perfect credit use the guide How to raise your personal credit score.

Business credit score and why its important guide has everything you need to know about establishing and rasing your business credit score.

Remember the higher the score the better the rates and repayment terms will be as lenders will be using those scores to determine how likely you are to repay the loan.

For instance the a minimum score of 640 is generally required by the Small Business Administration (SBA) to be approved for a long-term loan.

The Small Business Administration guarantees a large portion of the loans issued by private lenders.

This SBA Guarantee minimizes the risk for lenders enabling them to offer high loan amounts with longer repayment terms.

Business owners should stay on top of their credit to qualify for low cost business financing options such as SBA Loans.

While it is always best to maintain good credit standing multiple funding options exist to help business owners without one to help secure the capital they need.

Actually, taking on a loan and making timely payments can significantly improve your credit standing and lower the cost of borrowed capital in the future.

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4

Reduce all unnecessary expenses.

Before applying for funding take a close look at your expenses.
Are there certain expenses and fees your business can do without?

Cutting out unnecessary spending and reducing the amount of your monthly payments will increase your margins and improve your businesses cash flow.

Higher margins lead to higher net income and a much healthier balance sheet.

Stronger business financials equal lower rates and better repayment terms of your small business loan.

Is that monthly magazine subscription that you haven’t read in the last 3 months really necessary? Do you pay various online subscription services that you barely use if at all?

If you are like most of us who like to try new services in hopes of improving their business, chances are there are probably a plethora of recurring monthly fees on your bank account you can do without.

Go ahead. Check.

The results might surprise you.

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5

Learn about the different types of business loans.

There are many different types of business loans.

It is important to know the differences when choosing the best small business loans your business.

After knowing what you will be using the funding for, choose the business loan best suited for your objective.

Why go into a 15 year long-term loan when you are only buying inventory for the next month.

There are much more suitable financing options for that purpose.

Would you prefer a daily or weekly payments versus having traditional monthly payments.

Knowing the various types of business loans will help you make the right decision.

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6

What are the requirements to qualify for a small business loan.

Knowing the requirements for the best suited business loan to meet your objective will increase your chances of approval.

  • Is your credit score high enough?
  • Are you willing to put up real estate as collateral?
  • How long have you been in business?
  • Do you have all the necessary documents?

Requirements vary greatly depending on each individual loan type.

You can learn about all the requirements for each loan type in our Small Business Loans page which describes them in great detail.

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7

Online Lenders vs Traditional Banks and Credit Unions.

Deciding between an online lender vs a traditional bank or a credit union is a decision that you need to make depending on what your current objective is.

With traditional banks borrowing money can be time consuming, usually requiring a ton of paperwork, a business plan and a lengthy loan application process.

Online lenders or alternative lenders will usually require minimal paperwork and in most cases you can receive funding in under 48 hours.

Interest rates tend to be lower with a traditional bank, but take into consideration most bank loans require collateral while online lenders do not.

Qualifying for a traditional bank loan in the current financial climate can be a lot more difficult as opposed to dealing with online lenders.

Lenders offer more funding options for business owners with less than perfect credit.

Cash advances, invoice factoring, unsecured business loans are just some of the options available to borrowers without good credit history.

Orumfy works with multiple national funding lenders that can meet your specific needs for obtaining business funding with a low origination fee, better rates and repayment terms.

The time for procrastinating is over.

With the modern technology at your fingertips, you don’t have to wait.

Let Orumfy show you what you pre-qualify for in seconds and get the capital you need today.

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8

Build a relationship with your lender.

Having a good ongoing relationship with your lender can be tremendously advantageous to business owners of both small and medium-sized businesses.

Having your lender know about your past business financial history can help them choose which of the best small business loans works with your business plan.

Working with the same lender gives you an advantage as the lender will have a better understanding of your business history and how your business model works.

The underwriting process for repeat customers is a lot faster and requires a lot less paperwork, so lenders often lower or waive the loan origination fee.

The loan application process will take minutes, since all you have to do is provide updated bank statements and/or A/R report which your lender might already have access to.

Orumfy carefully selects the lenders we work with and monitors the entire life cycle of the relationship between our clients and our partnering lenders.

Our “Human-Touch” approach ensures every single client receives the attention he/she deserves while establishing a long lasting relationship with a lender.

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9

Take your time. Use the tools at your disposal.

Click here to use the resources Orumfy has made available to you, to help make the right decision when choosing the best small business loans.

Use our Loan Affordability Calculator and see how much funding your business can afford to take on without overburdening the businesses cash flow.

Knowledge is power.
Take your time to make the right decision.

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10

Read the Funding Agreement.

Before signing make sure to carefully read the funding agreement.

If there is something you don’t understand - ask.

  • Are the terms and rates on the contract the same that were discussed with you?
  • What is the origination fee?
  • Are there any hidden fees?
  • Is there a prepayment penalty?

Make sure you are fully aware of all the terms before signing on the dotted line.

How it works
  1. Borrowers complete the loan application with Orumfy and provide all the necessary documents
  2. We analyze your documents, provide feedback and work with you until your business meets the requirements set by the SBA.
  3. Package submitted to the SBA for approval
  4. Once approved and repayment terms are accepted closing documents are signed by all parties
  5. Loan Proceeds are disbursed directly to your business

Types of Business Loans

The Small Business Administration operates through private-sector lenders by guaranteeing up to 90% of the loan amount.

This lending option helps small business owners obtain lower interest on long-term financing and short-term loans alike that they may not have been able to otherwise qualify for.

The small business administration has special programs for women-owned businesses and veteran-owned businesses.

SBA loans are best for business projects that require larger amounts of capital to be used for situations such as expansion, renovations and long term growth.

A business line of credit provides borrowers the flexibility that a regular business loan doesn't. Lines of credit provide businesses with capital for their day-to-day cash flow needs.

The interest is charged only on the amount used and not the entire line of credit available to you. Business lines of credit are a revolving line of credit, which works similar to your business credit cards.

Repayment terms can be in the form of bi-weekly or monthly payments.

This financing option is best for businesses that need the benefit of flexible terms and readily available access to capital to help with inventory purchases, payroll, marketing and advertising expenses.

Short-term loans are an effective choice for business owners in need of lending options for immediate working capital or managing cash flow.

These types of loans are particularly attractive businesses that don’t have a stellar credit history.

Ideal for businesses that require quick access to working capital for an unexpected growth opportunity or an unforeseen cash flow crunch. Merchant Cash Advance.

Equipment Loans can be used with practically any type of equipment that generates income or saves time and labor.

Equipment leasing preserves the businesses cash flow since they generally don’t require a large down payment and often provide tax benefits. Terms will depend on the type and the life expectancy of the equipment.

Choosing between equipment leasing or financing for asset acquisition is directly related to the tax and accounting implications for your business.

One of the benefits of equipment financing is they are generally easier to obtain, because the equipment purchased serves as collateral.

A merchant cash advance is a lump sum amount of capital advanced to business owners against the future credit card sales that you repay using a set percentage of your daily credit card transactions.

This program is an effective choice for many small business owners because it offers repayment terms that are based on a flat percentage of the credit card sales.

Ideal for businesses that accept a credit card as payment because it ensures that if a business has a slow day (or season) it will not have to continue dealing with a fixed monthly payments that will negatively affect their cash flow.

Invoice Factoring is an important aspect for any business that invoices their clients.

It works by selling your invoices to an invoice factoring company which pays you a large portion of the invoice amount upfront, and the remaining amount minus the interest is released when the invoice is paid.

The services provided by invoice factoring companies is essential for businesses that invoice their clients but require working capital to operate before their invoices are paid.

Unsecured small business loans provide working capital to business owners without any collateral, such as real estate or business assets.

Obtaining unsecured business financing is usually quick and requires minimal paperwork.

A lender will look at the borrowers credit history and cash flow to determine if the business qualifies for this type of lending option.

Once approved funding usually takes place immediately.

Borrowers with a bad credit history still can find financing options for working capital.

Less-than-perfect credit does not mean businesses don’t have options.

Business owners can use the funds for any type of business need just like any other type of small business lending.

From purchasing inventory, to cover payroll, invest in marketing and advertising, obtaining new equipment or just to help with cash flow.

Start up business loans are financing options that are designed specifically towards business start-ups with little to no business history.

Invoice factoring, equipment leasing and financing, business credit cards and short-term loans are some of the lending options available to start-up businesses.

Created for entrepreneurs looking to start a new business and require capital to achieve that goal.

FAQ

How do you qualify for a small business loan?

Simply answer these 4 questions on the right and see what financing options your business pre-qualifies for in seconds.

Connect your bank account or upload recent bank statements and turn those pre-qualified offers into money in your account.

Here is a brief overview of the qualifications required for the most popular best small business loans available in today’s marketplace.

SBA Loans

In order to qualify for financing through the Small Business Administration loan program business owners need to operate a for-profit business, have a credit score of 640 or above and provide a business plan.

Short-Term Business Loans

For this type of lending option businesses only need to be operating for a minimum of 6 months and have an annual revenue of just $60,000 with a credit score of 550 or above.

Business Line of Credit

Borrowers need to have their businesses established for at least 1 year, have a score of just 550 or above with a minimum annual revenue of $50,000 and own at least 20% of the business.

Merchant Cash Advances

Businesses that have been established for at least 3 months, have a minimum credit rating of only 550 with monthly average deposits between $7,500 to $10,000 can qualify for this financing option.

Equipment Leasing & Financing

Business owners that have been in business for 11 months, have a credit rating of 600 and above with a minimum annual revenue of $100,000 can qualify for equipment leasing or financing.

Invoice Factoring & Invoice Financing

Approval and cost of factoring services will depend on the industry and credit history of your invoiced client, or in the case of Invoice Discounting your credit history.

Are small business loans hard to get?

Qualifying for small business financing with online lenders is not as difficult as qualifying with traditional lenders.

Businesses only need to be in operation for a minimum of 6 months, have an annual revenue of at least $60,000 and a credit score of 550 or above.

The loan application process is quick and requires minimal paperwork with no business plan.

How can you get a small business loan without collateral?

Most business loans do not require any collateral.

If you are applying for certain types of SBA products or other types of long-term financing options, collateral might be necessary in order to be approved.

For short term business loans and merchant cash advances collateral is almost never required.

Using a personal loan for your small business?

You can use a personal loan for your business needs.

In some cases start-ups may have no choice but to use personal loans.

Once you have an established business however, it is best to separate your personal finances from the business finances.

Personal loans normally do not require any collateral.

Approvals, rates and repayment terms are determined based on your credit history.

Apply for business credit cards and avoid using your personal credit card for business expenses.

How long does it take to get a business loan?

It all depends what type of a business loan you decided is best for you.

While the loan application process with a traditional bank can take up to a few months, alternative lenders can have you funded in under 48 hours.

Approval for business line of credit or business credit cards takes minutes and you can get access to funds almost immediately.

Do I need a business plan to qualify for a business loan?

Certain low cost & low fees long term loans such as an Small Business Administration lending products or bank term-loans do require a business plan.

Most short-term loans however, do not require a business plan.

What is the difference between a Personal Credit Score and a Business Credit Score?

A Personal Credit Score is a snapshot on how you meet your personal financial obligations.

A personal score ranges between 300 to 850.

A score below 600 is the beginning of poor credit.

The higher the score the less of a risk a lender sees in you.

The three credit bureaus that track your credit history and grade your personal credit score are Experian, Equifax and Transunion.

A business credit score on the other hand is a snapshot of how the business meets its financial obligations.

The three credit bureaus for business are Dun & Bradstreet, Experian, and Equifax.

Registering with Dun & Bradstreet and getting a D-U-N-S number for your business is essential to establishing your businesses credit history.

Would I qualify for a business loan after bankruptcy?

Within the first two years the chances of getting approved for a loan are very low.

After the two years lenders will look to see if your credit history has improved when considering you for approval.

Is it hard to get approved for an SBA loan?

The Small Business Administration lending program operates through private-sector lenders that provide small business loans which are guaranteed by the SBA.

You can borrow money for nearly any business purpose — including working capital, purchasing inventory or equipment, refinancing other debts, buying real estate or even funding the acquisition of other businesses.

The SBA uses federal money to guarantee a large percentage of those loans to lenders, so financial institutions have more incentive to lend money to small businesses at lower rates.

Simply put the SBA backs up a portion of the lenders small business loan, meaning a lot less risk for lenders.

What is Crowdfunding?

A crowdfunding platform is where business owners look for funding for any project by raising small amounts of money from a large number of people.

In today’s interconnected world, a crowdfunding platform is built and operates via the internet.

What is peer-to-peer lending?

Peer-to-peer lending is where money is leant to individuals or businesses through online services that match lenders (peer-to-peer lenders) with potential borrowers.

Requirements for capital for peer-to-peer lenders can vary substantially from a minimum of only $25 bucks to millions of dollars.

How to get the best small business loan?

With Orumfy obtaining a small business loan is quick and simple.

Create a free account, complete our quick online loan application process and our platform will match you with a lender best suited for your business financing needs.

Understanding the various types of business financing options available combined with the knowledge of what your business can qualify for is crucial when trying to choose which one of the best small business loans is right for you.

Orumfy connects you with lenders offering the best rates and repayment terms available today.

We know the SBA process. We can help you get approved. let's get started

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