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If you are a business owner struggling with cash flow or looking to expand, consider small business financing. There are many $100,000 business loan options that may be open to your business. This article gives you great options for a $100,000 business loan, explains what you need to qualify, and answers common questions about this amount of financing.

The best business loan options for $100,000

Finding financing options that offer $100,000 can be tricky. But you’ll be happy to know that there are many types of loans that offer this lump sum.

Here are some loan offers that we recommend:

How to qualify for a $100,000 business loan

There are many small business loans that can help you start a business, increase your cash flow, or build inventory or equipment. To increase your chances of getting business loans by 100,000, follow these 5 easy steps:

1. Establish your credit scores

When deciding whether or not you meet the eligibility criteria, a commercial lender will likely review your credit history. They can review both your personal credit score and your business credit score, depending on their needs.

Whether you have bad credit or good credit can help lenders decide if you get financing, and it can also influence the interest rate you receive. Generally, a good credit score means you seem more likely to pay your debts, which can help you get lower interest rates. Don’t miss Nav’s guide on how to establish business credit for everything you need to know.

2. Find the best lender

When choosing a lender, compare factors such as interest rates, approval requirements, and monthly payment terms. Traditional banks often offer financing for businesses, such as term loans, trade lines of credit, or Small Business Administration (SBA) loans like the SBA 7(a) loan. These options can offer low interest rates and good repayment terms. However, keep in mind that bank loan applications can be subject to strict requirements and take months to be approved.

On the other hand, alternative and online lenders often have faster online application processes. These lenders may offer similar types of loans, although you may find that they offer you a higher interest rate.

If you find you can’t qualify for any of these loans, you can also check out business credit cards to fill the cash gap and get fast financing.

3. Gather your documents

Commercial lenders usually list on their websites which financial or legal documents you need to request. Depending on the type of financing, you may need to provide your business financial statements, bank statements from a business bank account, or tax returns. Check with each lender to see what they need from you before applying.

4. Create a detailed business plan

A business plan outlines your goals and what your small business needs to achieve them. Many lenders will want to see a concrete business plan before they are willing to offer you financing. Essentially, they seek business direction and well-planned goals. If you need help writing your business plan, check out Nav’s guide to writing a business plan.

5. Offer guarantees, if necessary

Some loans require you to pay a deposit or a guarantee. These loans are called secured loans. Whether or not you qualify for a secured or unsecured business loan depends on factors such as your credit scores and business income. Be prepared to offer collateral if needed for financing.

How much money do you need for a 100,000 business loan?

It may sound counter-intuitive, but sometimes you need a down payment to secure business financing. The good news is that it is rare. If you are looking for a $100,000 business loan, you may need to provide a down payment on the loan or use it as collateral. But not always.

On the other hand, you may be required to post personal collateral or business assets as collateral for a loan. The security deposit can help you qualify for financing that you might not otherwise have.

Whether or not you need to pay a deposit depends on factors such as:

  • The type of financing. Commercial lines of credit and short-term loans generally don’t require a down payment, but many SBA loans do.
  • The amount of the loan. Lenders may ask you to put down a percentage of the total loan amount as a down payment, similar to a mortgage.
  • Annual revenue and financial details of your business. The more you are able to repay your debts, the less likely you are to find high down payment or security requirements.
  • How you will use the loan. The purpose of the loan is often taken into account when determining whether or not you will need cash before borrowing.

These factors may also affect your loan payments and repayment terms. If you’re a strong lender candidate, you may get a lower annual percentage rate (APR) and be required to pay less each month.

Can a startup be approved for a $100,000 business loan?

Even if you have a brand new business, it helps to understand that there are business start-up loans that may be available to you. You may have heard that lenders’ eligibility criteria focus on things like minimum credit score, time spent in business, and annual income from your business. While this is true for some lending options, there are other lenders and options that might be right for your startup.
One way to quickly find financing for small businesses is to create a free Nav account. Nav instantly finds the loans you’re most likely to get based on your business data.

This article was originally written on June 30, 2022.

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