Business Financing

Funding is essential to a small business's launch and growth. Learn about the many financing options available and what to consider to achieve optimal business success.

Frequently Asked Questions

  • What does a small business need to get a loan?

    Documentation and eligibility for small business loans depends on the lender and loan programs, which can each have specific requirements. For example, eligibility for Small Business Administration loans like 7(a) tends to depend on certain factors:

    • How a business earns income
    • How business ownership is structured
    • Where the business operates
    • Business size
    • Ability to repay the loan
    • Sound business purpose

    SBA loan criteria require that businesses must also be for-profit and located within the U.S. or its territories.

  • Are small business loans hard to get?

    Eligibility for small business loans can often be affected by both personal and business credit scores and other factors like lack of collateral and capital investment. However, if business owners are affected by bad credit, for example, there are certain loans can try to obtain including working capital loans from the likes PayPal, AmEx, and Square.

  • What is the limit for a small business loan?

    Maximum business loan amounts can vary by lender, but some can reach into the millions. For example, the SBA's 504 loan program has a threshold of $5 million max for major fixed asset purchases toward business growth and job creation.

  • What type of financing is best for a small business?

    There are several financing options available to small businesses, but it can sometimes depend on what phase your business in. Banks can be one of the best options if you qualify as they typically offer lower interest rates than other lenders. However, most banks may require a business to show signs of success before lending money as they want to make sure it gets a return on its investment. So bank loans might be more difficult to obtain for businesses just starting out. In such cases, options such as SBA loans, microloans, or even bootstrapping might be more ideal options.

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