When it comes to financing for your small business, you’ll be faced with an abundance of options – each offering a unique value proposition that’s worth examining.
Funding comes in all shapes and sizes; whether you need capital to build your inventory, obtain new equipment, or widen your marketing efforts – there is an assortment of options designed specifically for your needs.
Finding the best small business loan for your operation can be challenging. That’s why we created this table to help you determine which financing solution is best suited for your enterprise.
|Types of Loan||Best For||Max Amount||Interest Rate||Maturity |
|Credit Score||Time in Business||Revenue|
|Mature businesses who desire |
a longer term
|$5 million+||4.9% - 20%+||20 years||620+||2+ years||>$120k/year|
Line of Credit
|Businesses that require |
a flexible amount of cash
|$500k+||10% - 20%+||5 years||620+||1+ years||>$100k/year|
|Businesses seeking significant|
long-term growth potential
|$5 million||10% - 12.5%||20 years||650+||2+ years||>$120k/year|
|Businesses that need a |
rapid injection of capital
|$500k+||1.15 - 1.45|
|2 years||500+||6 Months+||>$100k/year|
|Businesses purchasing new equipment||$500k+||10%+||20 years||620+||6 Months+||>$120k/year|
|Businesses who wish to unlock cash |
from their outstanding AR
|$500k+||10% - 40%+||20 years||NA||NA||>$100k/year|
Business term loans are a convenient way to obtain funding for your business, with numerous term options depending on your circumstances. In general, business term loans offer industry-standard rates based on your business’s history and credit profile, with fast funding options available. They provide maximum flexibility in how you choose to use the funds, with only minor limitations – and you can opt for either secured or unsecured terms, depending on your needs.
Whether you need to refinance debt, purchase inventory, or expand your marketing efforts – business term loans can be a tremendous option to secure the funding you need.
Ready to find a business term loan that suits your needs? Get in touch with Llama Loan today to explore all of your options!
One of the most common types of small business loans available is a business term loan. This type of financing allows you to borrow capital with very few limitations on how it’s used.
A business term loan is a more traditional form of financing that allows business owners to borrow money over a fixed period at an agreed-upon interest rate that could change, outlined in the terms of the loan.
Both secured and unsecured loans are available, which offers greater accessibility for businesses of any sort. Interest rates can be either fixed or adjustable, depending on the terms of the loan you opt for.
The interest rate offered is retrospective of your personal and business credit profiles, current market and economic conditions, the lender you work with, and your business history and financials.
Maximum loan amounts will vary from lender to lender and business to business, with the potential for greater than $5 million in funding under certain circumstances.
Payback periods for term loans vary depending on your needs. You can find short-, mid-, and long-term business loans that can vary in length from a few months to over five years.
To qualify, lenders will examine your credit score, business history, financial statements, and in some instances, collateral may be required for approval.
One of the key benefits of a business term loan is the flexibility offered in how you can use the funds. Whereas some other types of funding will require you to use the funds for specific purposes – term loans grant business owners maximum flexibility. Additionally, by opting for an unsecured business term loan, you can be approved for financing without needing additional assets.
Opening a business line of credit can be an excellent option for business owners who need more flexibility and speed with their financing. Because you can draw against your line of credit whenever needed, this can be beneficial for seasonal businesses or businesses with large fluctuations in revenue or expenses. In many cases, you can get approved for a business line of credit within a few days, making them one of the fastest funding options available. Finally, because you only pay on draws made from your line of credit, this can be a more competitive financing option when compared to most traditional loans.
Is a business line of credit right for you? Contact Llama Loan today to access current rates and offers!
For some small businesses, having an open line of credit that can be utilized for an assortment of business expenditures can be a better option than a traditional loan. This gives business owners more flexibility in using the credit as they need it, rather than committing to a long-term financing option. You are only required to pay back the amount you draw plus interest instead of a large lump sum amount – whether you use all of it or not.
In most cases, you can be granted access to anywhere from $50,000 to over $500,000 in financing for your business, and when approved, you can negotiate a draw period ranging from six months to over five years. At the end of the draw period, you can choose to extend the line of credit after reaffirming your business’s financials.
Interest rates for a business line of credit are in-line with those of a business credit card and are determined by your credit score, market conditions, business history and financials, and the amount of the line of credit.
You can choose between a secured or unsecured line of credit, which is differentiated by the collateral that’s required. Unsecured lines of credit will often offer limited draw amounts and higher interest rates but require no collateral for approval. Secured lines of credit offer higher limits and a lower interest rate but require collateral to back your draws.
SBA loans are some of the most widely utilized financing options for small businesses in the United States. These loans are backed by the SBA, which grants lenders more flexibility in the approval process. SBA loans can come in many different variations depending on your needs, and in some cases, you can receive your capital within seven business days by utilizing an SBA Express loan. SBA loans offer favorable interest rates compared to other financing options, and you can qualify for up to $5 million in funding for your business. If you are seeking the most economical small business loan available, SBA loans are often the right choice.
Ready to find an SBA loan for your business? Contact Llama Loan today to view all of your options!
SBA loans are another popular funding method for small businesses thanks to their convenience, favorable interest rates, and increased flexibility.
These loans come in several varieties depending on your business and the primary purpose of the loan. For example, SBA Disaster Loans are specifically offered to businesses facing a declared disaster, while SBA 7(a) loans are accessible to any small business that meet the eligibility requirements. They also offer fast funding options for businesses that need expedited financing.
SBA loans are an attractive solution for a few reasons. First, because a portion of the funding is secured by the SBA – it makes them more accessible to applicants who otherwise may not be approved for traditional funding options. Second, interest rates are capped and have set limits that are determined by the SBA, which tend to be more competitive than many conventional loans. Lastly, SBA loans can offer larger loan amounts with less collateral than many traditional business loans.
The qualifications for SBA loans tend to be more lenient than other business loans, but you’ll still be required to provide all documentation and details of your business, including financial statements, balance sheets, personal and business credit scores, and other documentation determined by your lender.
Interest rates for SBA loans will vary depending on the type of loan, but the most common SBA 7(a) loans are determined by current market conditions, known as the prime rate, in addition to a lender spread.
A merchant cash advance is worth considering for businesses that require a quick cash injection and have proven card sales. Because the card sales are used as collateral for the financing, you won’t be required to hold other assets as collateral – which makes the funding quicker and more accessible. Additionally, because merchant cash advances aren’t equivalent to traditional loans, the requirements are regulations surrounding them tend to be laxer. In some instances, a merchant cash advance can be a more affordable funding option depending on your business’s profile and sales history.
Ready to find merchant cash advance options that fit your business? Contact Llama Loan today to get started!
If your business needs a short-term cash injection, using a merchant cash advance could be a suitable option for your enterprise.
With this financing method, you will use your card sales as collateral for the borrowed capital and a factor rate will be applied to calculate how much is owed to the merchant cash advance company.
The factor rate is formulated using your business’s history, card sales, credit, and the amount being borrowed.
Because a merchant cash advance is self-collateralizing, you won’t need additional assets to qualify for the advance, assuming you have a reputable business and card sales.
To qualify for a merchant cash advance, you’ll need to provide merchant account statements, business details, including bank statements and other financial documents, and you must be in good standing with the associated credit card processing company.
Repayment of your financing is unlike traditional loans. Instead of making standard, routine payments on your installment, repayment is made from your merchant account or business bank account on a set schedule that’s determined by your lender. The schedule and payment terms are typically calculated based on sales volumes which vary from business to business.
Factoring rates for a merchant cash advance will vary depending on a multitude of factors and the lender you’re working with. In many cases, a merchant cash advance is a more economical financing option compared to traditional loans because it is reliant on your card sales, which is a proven measure of business success, offering lower risk to lenders.
Equipment financing can be a fast and convenient way to secure capital needed to purchase new equipment. This type of financing is self-collateralizing, so you won’t need additional assets to back your funding. Additionally, equipment financing can offer valuable tax savings that can help you reach your business goals. Interest rates and terms will vary depending on your lender, business, and current economic conditions, but they tend to be competitive and in-line with similar financing options. In most cases, you will be limited to financing up to 90% of the purchase, so you will need to have capital set aside for a down payment.
Contact Llama Loan today to examine all of your equipment financing options!
Equipment financing can be an affordable financing option for small businesses that are looking to acquire new equipment for their operation.
It works by using the equipment as collateral for the loan, which offers business owners more flexibility.
To qualify for equipment financing, you’ll need to provide your business history and financial details, business and personal credit history, and often a down payment for the purchase.
Interest rates and terms of your loan will vary from lender to lender as well as the lifespan of the equipment being financed. In most instances, the length of the loan will range from two years to over twenty years – depending on the equipment and your lender.
With many lenders, you can secure funding in less than ten business days, making it one of the quicker financing options you can find.
This type of small business financing can also help you build credit when you make on-time payments, opening the door for future opportunities.
Invoice factoring can be a great funding option for businesses with outstanding invoices and credible customers. In general, you can obtain capital for up to 90% of your unpaid invoices depending on the lender and your customers’ creditworthiness. Additionally, because the invoices are being used as collateral, you won’t be required to provide tangible collateral for approval.
Invoice factoring can be a more affordable option compared to other financing methods, but it can vary depending on your customer profile. It’s also worth noting that, in some cases, invoice factoring can be a lengthier funding method because factoring companies will want to conduct an in-depth examination of your customers and invoices.
Ready to find funding for your business through invoice factoring? Get in touch with Llama Loan today!
If your business is facing a cash crunch and you have outstanding invoices awaiting payment, using invoice factoring can be an economical way to get the cash you need to keep your operations moving forward.
Invoice factoring works by selling your outstanding invoices to a third-party factoring company in exchange for a lump sum of capital for your business. In most cases, you can receive up to 90% of your outstanding invoices paid to you upfront. Factoring companies will discount your invoices based on the creditworthiness and credibility of your customers as well as the type of factoring being used.
To qualify, factoring companies will want to examine your customer base, their payment history, and other aspects of your business, including your business history as well as personal and business credit.
Many small business owners will lean on invoice factoring because of the lack of tangible collateral required for approval, as the invoices are self-collateralizing.
If you need funding for your small business, there are plenty of options worth considering. Depending on your business’s situation and needs, some financing options might be better than others.
Always be sure to consider the total amount you will pay for your financing, as well as how it fits into your business’s goals.
If you’re ready to secure funding for your small business, get in touch with Llama Loan today to get access to the most competitive rates available.