When you’re seeking a large business loan, it may seem that all you find everywhere you turn are lenders and financial institutions touting options for small business loans. They make it sound like anyone can get a small business loan, but it simply isn’t that easy. And, if you require a more substantial loan amount for your business, it can be difficult to determine the best course of action.
That being said, you do have options. In fact, Forbes predicts that the economic forecast for businesses is positive for most sectors for 2017 into 2018. As it turns out, large businesses can not only take advantage of the same options that small businesses do to secure loans, but they also have even more options.
Sources for Large Business Loans
The most common sources for large business loans include banks, the SBA and other financial lending institutions. Large businesses already in existence can also secure loans by leveraging equity or assets to secure a line of credit or obtain a secured business loan. Let’s take a look at the various options:
Large banks are the most common lenders for businesses large and small. If all your paperwork is in order, your credit history is good, and you have substantial collateral, you might think your chances of receiving a large business loan are fairly good. However, banks have a low approval rate for business loans (typically ~20%), and they could keep you waiting for weeks or even months before saying yay or nay.
A number of smaller banks aggressively seek out companies as candidates for large business loans. Like larger banks, you still need strong credit, substantial collateral, and a strong underlying business (you can learn more about whether you’re bankable here ).
Unlike large banks, smaller and community banks tend to have higher approval rates (~50%), suggesting that they’re more willing to do “handshake” deals based on your reputation. Unfortunatley unlike large banks, small banks tend to have lower lending limits, so there’s a limit to how much the smaller banks can actually provide.
SBA 7(a) Loans
SBA loans are a good option for large business loans, with amounts of up to $5 million granted at a reduced risk to the lender. Unfortunately, the SBA process can be slow (in our experience, 2-4 months… though we’ve seen as long as 10), and the red tape and paperwork is “legendary” (you can learn more about the SBA process here).
Alternative lenders, commonly referred to as FinTech or peer to peer lenders, are another viable option. However, most of the alternative lenders have a max loan amount between $100,000-500,000. You can see how many of the top peer to peer lenders compare here . There are a lot of reasons for that (mostly relating to what their capital providers prefer), but if you need more than $500,000, you are probably out luck.
Able Large Business Loans
One of the things that sets Able apart from other alternative lenders is the loan amounts. Unlike most peer to peer lenders, Able makes business loans as large as $1 million. So if you’re a growing business looking for a larger loan amount, but you don’t have the required secured assets for a bank loan or the lead time (2-10 months) for an SBA loan, Able might be the perfect option.
Getting a small business loan is gnerally an ardous process. If you are looking for a larger loan that process becomes even more difficult. Fortunately there are a number of options to choose from depending upon your business’s financial resources and needs. In order to increase your chances of success you need to put in the due diliengence to find the right funding source for your business. Good luck!