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Small Business Loans: 6 Reasons Why Your Business Should Get One

Small Business Loans: 6 Reasons Why Your Business Should Get One

If you’re researching a loan for your small business, it can be overwhelming given the number of options available. Banks are always the best option in terms of rates but loans are difficult to qualify for and can take months to get approved. And, if you’re a small business with less than perfect credit or you don’t meet certain profitability ratios, chances are you’ll get turned down by the bank.

Here’s some other situations where an online small business loan is usually a better option than the bank:

Not in business long enough

If you own a new business, a bank won’t even consider a loan. You probably need 2-5 years of profitability before you can even get an appointment at the bank. On the other hand, most online lenders will approve businesses that have been open for 6 months.

Smaller loan amounts

If you need $25,000 for extra inventory or a new marketing campaign? Banks typically aren’t interested in small loans (under $100,000) because they simply can’t make any money at bank rates. The cost of underwriting and administering a loan is the same regardless of the loan amount – so they just don’t do small loans. Online lenders have recognized this gap in the market and most offer loans as low as $5,000.

Getting caught up on bills

After a slow period, you simply need to get caught up on bills? Banks don’t lend money for working capital – they typically only lend money for assets they can secure like real estate or equipment. Online lenders provide funding for any business reason – inventory, marketing, equipment, taxes, or just a cash flow cushion.

Fast access to capital

Emergencies or opportunities can’t wait – you snooze, you lose. Small businesses need to act fast but getting approved for a loan at the bank can take weeks or even months. Most online lenders can provide funding in less than 2 days and usually the same day for loan renewals.

You have a poor to fair credit score

If you don’t have a near perfect personal credit score, the bank will turn you down regardless of the performance of your business. Many online lenders don’t require a minimum credit score, and will instead evaluate the business based on sales history and other factors related to your business.

Your business is not yet profitable

To get a loan from a bank, your business usually needs to show profitability for the past two or more years and meet multiple other financial ratios. Most online lenders look at the sales history of the business rather than the profitability of the business.

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ProTrack specializes in mobile & tracked crushing, screening & recycling equipment. ProTrack provides on time equipment services, preventative maintenance, inspections and recommended action reports.

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