Every year, there are over 30 million small businesses started in the United States alone explains Tommy Shek.
While this is an encouraging statistic, it’s also a reminder that competition is stiff for small business owners seeking financing.
Bank loans are often seen as the best option for small business funding, but they can be difficult to obtain. The good news is that there are other options available for small business owners who need financing.
Here are 4 Steps to Getting a Small Business Loan Fast:
1. Research Your Options
There are a number of different financing options available for small businesses. Before you decide on a loan, it’s important to do your research and compare the different options. Each type of loan has its own set of benefits and drawbacks, so it’s important to find the one that best suits your needs. Some of the most popular financing options for small businesses include:
Small Business Administration (SBA) Loans: SBA loans are backed by the Small Business Administration and typically have lower interest rates than traditional bank loans. They can be used for a variety of purposes, including start-up costs, equipment purchases, and working capital.
Bank Loans: Bank loans are the most traditional form of small business financing. They usually have higher interest rates than SBA loans, but can be easier to qualify for explains Tommy Shek.
Equipment Financing: Equipment financing is a type of loan that is specifically used to purchase equipment for your business. This can be a great option if you need to purchase new or updated equipment, but don’t have the cash on hand to do so.
Small Business Credit Cards: Small business credit cards can be a great way to finance small purchases or everyday business expenses. Many small business credit cards offer 0% interest for an introductory period, which can save you significant money on interest charges.
2. Know Your Credit Score
Your credit score is one of the most important factors in determining your eligibility for a small business loan. If you have a high credit score, you’ll likely have an easier time qualifying for a loan and will be offered better terms. If you have a low credit score, it may be more difficult to qualify for a loan. There are a number of ways to check your credit score, including:
Checking Your Credit Report: You can get a free copy of your credit report from each of the three major credit bureaus (Experian, TransUnion’s, and Equifax) once every 12 months. This will give you an idea of where your credit stands and whether there are any red flags that need to be address.
Checking Your Credit Score: You can also check your credit score for free. This number is typically a good indicator of your chances of qualifying for a loan says Tommy Shek.
3. Shop Around for the Best Rate
Once you know your credit score, it’s time to start shopping around for the best interest rate on a small business loan. Interest rates can vary significantly from lender to lender, so it’s important to compare rates before you decide on a loan.
Some things to keep in mind when shopping around for a loan:
– The type of loan you’re looking for: Different types of loans often have different interest rates. For example, SBA loans typically have lower interest rates than traditional bank loans.
– Your credit score: Your credit score is one of the most important factors in determining your interest rate. The higher your credit score, the lower your interest rate is likely to be.
– The length of the loan: The longer the term of the loan, the higher the interest rate is likely to be.
4. Consider an Alternative Lender
If you have a low credit score or don’t qualify for a traditional bank loan, you may want to consider an alternative lender. Alternative lenders are typically online lenders that offer loans to small businesses that may not qualify for traditional bank financing.
Tommy Shek says there are a number of things to consider when you’re looking for a small business loan. Be sure to shop around for the best interest rate and terms, and consider an alternative lender if you have a low credit score or don’t qualify for a traditional bank loan.