If your small business has been able to procure a loan through the SBA program, you may be wondering whether your loan qualifies for a forgiveness program.

In this guide to understanding SBA Disaster Loans and other economic relief, we’ll break down the two loan programs, the criteria for each, any active loan forgiveness programs, and the procedure to apply for both.

Understanding the Programs: EIDL and PPP

The two SBA loan programs that are specific to disaster relief, meaning the business would otherwise function as usual had there not been a catastrophic event, are the EIDL and the PPP Program.

SBA Disaster Loan: EIDL

The Economic Injury Disaster Loan (EIDL) is government-funded, and it provides funding with a limit of $2 million for small businesses that are overcoming obstacles related to decreased revenue.

The economic disaster loan funds are for nearly all business-related purposes such as benefits, payroll, rent, buying materials, vendor payments, utility payments, etc.

Here’s a list of what the borrower can’t use the SBA disaster loan for:

• Employee bonuses
• Business expansion
• Renovations
• Refinancing Debt (Long-term)
• Property repairs

The interest rates for the disaster loan for small businesses and nonprofits are 3.75% and 2.75%, respectively. The term of repayment for the EIDL can be as long as 30 years, but it depends on your business’s ability to pay the loan back.

Your first SBA loan payment gets deferred for one year; however, interest will still accrue. The borrower is allowed to make pre-payments if they want, without facing any penalties.

Do You Have to Pay Back SBA Disaster loans?

In short, yes, just perhaps not fully; you have to pay back the SBA disaster loans, but if you’re eligible to receive the EIDL grant maxing out at $10,000, that portion is tax-free and eligible for forgiveness. The first round of these funds began in March 2020 and was used up by July 2020.

During the second bill passed for Coronavirus economic relief, a revived program for the SBA EIDL grant began. This award is now called the “targeted” EIDL advance, and the funds are available but with stricter requirements.

Small businesses must be located in a low-income community, and borrowers had to have previously applied for the first EIDL advance. They could’ve obtained partial funds or none at all due to the funding being already fully distributed.

There are no instructions on applying for an EIDL grant because the government allocated all funds during the first round of Coronavirus Relief loan programs based on the company’s number of employees. With the new targeted EIDL grant, those who previously applied for the original EIDL loan will be considered for the latest round of funds available.

The SBA has already started that they would be actively contacting those applicants that were eligible, and therefore no further action is required.

You can check your EIDL loan status by phone, email, or online, using the following contact information:

• Email: disastercustomerservice@sba.gov
• Phone: 1-800-659-2955
• Online: SBA Economic Injury Disaster Loan Portal

SBA Disaster Loan: PPP Program

The Payment Protection Program is another SBA COVID loan available to small businesses to help keep their employees on the payroll during the Covid crisis. These loans are offered by approved lenders such as banks, credit unions, etc., that the SBA approves, but the government backs them to reduce risks.

Understanding the Paycheck Protection Program

If you’re applying for the PPP loan for the first time, then you can receive up to $10 million. If this is your second time applying, then your loan maxes out at $2 million.

You can calculate the amount of your loan by multiplying the total average of your monthly payroll payments by 2.5. Check here for specific information on the dates that are eligible for consideration.

If your small business falls under accommodation or food services, you’ll multiply your payments by 3.5 instead.

All businesses that are seasonal may select any period of 12 weeks as long as it’s between mid-February 2019 and mid-February 2020. These companies will also multiply their payments by 2.5

View eligibility requirements for first-time PPP applicants here and second-time applicants here.

The PPP offers loans that are forgivable to small companies to cover 24 weeks of expenses that are both payroll (60% of the loan) and non-payroll (40% of the loan) related.

Forgiveness criteria for first and second-time applicants:

• Compensation and employees remain the same
• Loan funds used for eligible payroll expenses
• A minimum of 60% of loan funds went toward payroll expenses

These are the payroll expenses that are eligible for forgiveness:

• Local and state taxes
• Commissions, tips, wages, salaries (maximum of $100,000 for every employee)
• Benefits for employees (sick leave, health insurance, vacations, etc.)

These are the non-payroll expenses that the SBA won’t forgive:

• Utilities
• Property damage
• Rent
• Interest for mortgage payments
• Protection expenses for workers such as safety equipment
• Essentials needed for business operation
• Operation expenses such as software and other devices.

You cannot apply for a PPP loan if you were not in operation by February 15, 2020.

You can apply for both SBA coronavirus loans simultaneously, but you can’t use the funds for the same purpose.

Loan Forgiveness and Payback Programs

Remember that there aren’t any EIDL loan forgiveness programs available. You may be eligible for a grant, but the SBA will determine that, and they’ll contact you directly after consideration.

To obtain SBA economic injury disaster loan forgiveness for the PPP loan, the borrower may apply after using all the funds they received. The borrower is eligible to apply up until the date of maturity for the loan. If forgiveness for the loan is not sought after by the ten-month mark following the expiration of the covered period, the borrower cannot defer the loan payments.

Maybe you’re looking to upgrade your restaurant with new state-of-the-art equipment, increase staff to provide a better customer experience, or need some cash under your belt to keep your business afloat during turbulent times.

Whatever the case, securing a loan can be critical to your business’s success. And while today there are many more options for restaurant owners to access business loans, it can get confusing and leave you wondering where to begin.

This article sheds light on how to get a business capital loan for a restaurant. We discuss the requirements for obtaining a loan, the different types of financing your restaurant may qualify for, how to get financing when you have bad credit, and how you can be eligible.

Restaurant Business Capital Loan Requirements

Loan requirements differ slightly between traditional and non-traditional lending institutions. Here’s what is required to apply for financing from a non-traditional lender:

• A credit check
• Three months’ bank statements
• Credit card statement
• Federal identification
• Driver’s license
• A void check

On the other hand, traditional lending institutions, including the best banks for restaurant loans, typically require that a restaurant is in operation for at least a year.

In addition to the above requirements, you’ll need to supply the following:

• 2 years’ tax returns
• A year’s financials (to-date)
• Your business plan
• Personal financials
• Details of other loans you’ve taken
• Bank statements

As you can see, it’s harder to obtain cash advances from traditional bank lenders and merchant cash advances, mainly because of the one-year operation requirement.

However, there’s another option, and you need not feel stuck if you’re denied a loan by a traditional lender. Non-traditional lending institutions can provide loans to restaurants with much looser guidelines.

And more great news about non-traditional loans is, once you submit your application, the whole process can (in some cases) take as little as 24 hours.

Restaurant Capital Loans Your Restaurant May Qualify for

Getting the right financing to supplement your cash resources can be a hurdle. However, knowing the different types of business loans for restaurants that are available can make it easier for you. Below are four types of restaurant financing that your restaurant may qualify for:

1. Equipment Loans and Leases

Restaurant equipment is expensive. Some necessary pieces of equipment include, industrial ovens and tabletops, commercial dishwashers, and walk-in freezers, all of which are hard to pay for out-of-pocket.

Fortunately, help is available. With restaurant equipment financing, it’s possible to finance up to 100% of the value of your new equipment. And what’s great about this type of loan is that the equipment itself serves as collateral, meaning you don’t need to put your assets as collateral to obtain a loan.

Restaurant equipment leasing is another option. You can lease all the kitchen equipment you need for a fraction of the retail cost, making it easier for you to upgrade to expensive machinery.

2. Working Capital Loans

Working capital loans are short-term loans to help you cover expenses and maintain the smooth running of your restaurant finances.

It’s not a loan for purchasing long-term assets but an ideal way for restaurant owners to obtain small business loans for restaurants’ seasonal expenses (temporary needs). For example, you may be going through a turbulent time and need help sustaining cash flow, or you may want to launch a marketing campaign.

Therefore, when you need a loan quickly, that isn’t too large of an amount, a working capital loan is an excellent option. The amount you can secure depends on the lender and your financial status, but usually, the maximum amount you can borrow is $250,000.

3. Lines of Credit

Lines of credit are a flexible financing solution that provides a pool of funds to use when the need arises.

Upon approval, a line of credit is available for you to use when you have a cash flow need, and you only pay interest on what you draw from it. And when you finish repaying, it’s topped up to the original amount.

Credit requirements for lines of credit are not strict. However, compared to other financing options, lines of credit can be more expensive.

Lines of credit  are helpful with the expected fluctuations of owning a business. For example, if you run a seasonal restaurant, lines of credit provide funds to help you survive a recession. Or when business gets slow, and you must cover your regular operational costs, or you need to adjust to staffing needs. Also, you can access restaurant loans during the Covid19 pandemic.

Therefore, lines of credit ensure your business is constantly running smoothly.

4. Small Business Administration Loans (SBA)

The SBA is a widely used source of loans, guaranteeing up to $23 billion annually every year. This popularity is attributable primarily to the SBA guaranteeing repayment of loans, eliminating risk for lenders, and making it easier for restaurant owners to access funding.

The two main types of SBA restaurant loans are:

• SBA 7(a) loan program: Upon approval, this loan can provide $350,000 in funding. It’s the most popular SBA and can cover funding for inventory, working capital, real estate, and some debt restructuring.
• SBA CDC/504 loan program: This loan is ideal for buying equipment, real estate, and other fixed assets, although you can also use it to expand or renovate your business. It’s not popular but still provides a good option for an SBA loan for a restaurant.

Getting Financing for Your Restaurant When You Have Bad Credit

Can you still obtain a loan for your restaurant with bad credit?

If you ask a bank, the typical answer is no. Banks are generally reluctant to approve loans for two main reasons: It’s a volatile industry with, among other things, high overheads, shaky profit margins, and complex supply chain, and also banks generate more income when they go upstream and target large enterprises.

Unfortunately, banks categorize restaurants as “high risk”; therefore, they’ll require you to provide more financial documentation than owners of other industries viewed as more stable.

So, where can you obtain financing? From non-traditional restaurant financing companies.

With alternative non-traditional lenders such as ROK Financial, you can qualify even with bad credit. What’s more, the application process is easy and much faster.

How to Qualify for a Restaurant Loan

Given that restaurants fall under a regulated industry with small margins, access to restaurant business loans is vital. Here are some tips to help increase the odds of you receiving financing for your restaurant:

• Stay on top of your business finances by using automated accounting software and an accountant to oversee the business finances.
• Be able to demonstrate your capital needs in detail.
• For SBA or traditional lenders, preserve operating cash to convince lenders you’re capable of sustaining your business with or without funding for the short term.
• Keep your business and personal finances separate.

Next Step

Applying for a small business loan can be an overwhelming process for business owners. Give one of our business financing advisors a call to discuss your business’ best financing options.

For construction companies, access to a business capital loan can mean the difference between skyrocketing toward success and never getting off the ground. That’s why no-strings attached loans, like those offered by the Small Business Administration (SBA), are such an attractive prospect for business owners in need of financing.

One of the many functions of the SBA is to act as a middle-man between lenders and borrowers to help secure crucial loans for new businesses. SBA loans are an entrepreneur’s dream-they promise large sums, generous terms, low interest rates, and backing by the SBA for up to 85% of their total value.

The eligibility standards for SBA loans are understandably stringent, which means not every business owner will qualify.

In this article, we’ll be going over some of the advantages, characteristics, and requirements of SBA loans for construction companies, as well as exploring a few of the best alternative small business loans for contractors.

SBA Loan Requirements

In order to qualify for an SBA loan, you’ll need to have a minimum credit score of at least 680, an extensive personal credit history, and a willingness to endure the sometimes agonizing process of submitting massive quantities of official paperwork. You’ll also need a good deal of patience, as it can take months to hear back about your prospective loan’s approval status.

If you believe you’d make a good candidate for an SBA construction loan and you’re determined to throw your cap into the ring, your first step will be to narrow down the type of loan you think will best serve your business.

There are three main classifications of SBA loans, each of which could be the difference-maker you’re looking for depending on your company’s size, specialization, and existing resources.

SBA 7(a) Loans

SBA 7(a) loans are one of the most popular business loans for construction companies. They come with advances of up to $5 million in funds, fantastically low interest rates, and a relaxed timeframe for repayment. To obtain an SBA 7(a) loan, your intended purpose for it must meet the SBA’s standards of approval for eligible use. Examples of eligible use include buying equipment, increasing working capital, and refinancing or consolidating debt.

SBA CDC/504 Loans

CDC/504 loans are specifically structured to boost purchasing power for major fixed assets, such as heavy machinery.

With amounts topping out at a whopping $5.5 million and repayment terms set for as far out as 10-20 years, a CDC/504 loan could be just the solution for you – if your company will be tackling large-scale projects.

SBA Microloans

As their name suggests, microloans are smaller-value loans meant to provide additional support to entrepreneurs with limited means. SBA microloans can be an excellent financing option for business owners who are only in need of around $50,000 or less.

And since these loans can be paid back at a leisurely pace over the span of up to six years, you won’t feel like you’re in a race against time once the money lands in your account.

Is Equipment Financing Your Best Choice?

Equipment financing is another popular form of construction company funding that contractors often use to get the ball rolling on fledgling startups.

With a typical equipment financing plan, the lender puts up as much as 80-100% of the money you need to start operating. That means you’ll have no trouble procuring all the necessary machinery, tools, protective equipment, vehicles, and other material assets used in construction work.

Equipment financing plans fall under the heading of asset-based loans. In this case, the collateral for the money you receive is the estimated market value of the equipment itself. If you fail to keep up with your payments, the lender has the right to repossess your equipment, leaving you right back where you started.

Still, equipment financing could be your most promising means of acquiring funding overall, especially if your business is still in its infancy or you’ve previously been turned down for an SBA loan.

Other Financing Options for Your Construction Business

Appealing to the SBA isn’t the only way for determined contractors to score much-needed business loans for construction companies. SBA loans for home builders are an excellent option, but if you don’t meet the SBA loan requirements, or you absolutely have to have capital ASAP, there are alternatives. For example, you can always take out a business term loan or business line of credit.

Business term loans are lump-sum payouts with predetermined amounts, repayment schedules, and interest rates. Their one-and-done nature can make them ideal for contractors who need help making big purchases or getting major projects underway.

With a flexible line of credit, you’ll enjoy the ability to draw on a renewable reserve of funds at your discretion and pay the money back later. You’ll only pay interest on the money you use, and interest rates on lines of credit tend to be considerably lower than those attached to other types of business loans.

Working capital loans for construction companies differ in regards to their particular terms and conditions, but they generally share a couple of key similarities, namely, less exclusive eligibility standards and more immediate access to aid.

Another attractive aspect of business loans is the freedom they bring-if you’re approved for a term loan or line of credit, you can use it however you see fit, whether it’s repairing broken equipment, building a second office, or commissioning decals for your company vehicles.

How To Apply for an SBA Loan

Applying for an SBA loan on your own can be a complicated process. Fortunately, ROK Financial is here to help.

To get started, simply take a few seconds to fill out our 15 second online application. We’ll then match you up with one of our expert financial advisors, who will walk you through the process and handle all the heavy lifting.

We can help you select the best funding option for your business, whether it’s one of the SBA loans for construction companies or an alternative, and get you set up in as little as 45 days.

If you are a business owner, you are well aware that you need the proper equipment to run it successfully. While some of these heavy equipment items are a necessity, the funding isn’t always available for you to get what your business needs.

Fortunately, there are options for heavy equipment financing to make sure you have what you need to keep your construction business operating smoothly.

Whatever the reason, be it insufficient funds, bad credit or no credit at all, or a budget with no flexibility, you and your business have other options. You can try looking into heavy equipment financing companies, used equipment financing, or construction equipment leasing. Some of these options may be a smart alternative for your business.

Heavy Equipment Financing Options

A financially responsible option to obtain the equipment you need for your business is to look into construction heavy equipment financing.

When you pursue heavy equipment financing, you will have to put forward a certain percentage of the cost of the equipment down. This can seem expensive, but compared to purchasing the equipment in full, it is a much cheaper option. You will have to make payments every month for the equipment to the company you are purchasing from.

If you won’t need the equipment for an extended period of time, consider going through a heavy equipment leasing company. When you lease products for your company, where you lease from maintains ownership of the item you pay to use for the duration of the time you have it.

If you do decide to purchase your equipment, you have different financing options based on your situation. These two options are a business line of credit and small business loans.

With a business line of credit, you can compare it to having a credit card for your business. Having this will allow you to be more flexible with expenses and have the funds to cover unforeseen circumstances.

One of the main benefits of having a business line of credit is that it can help keep your business running successfully, even amidst bad circumstances and unexpected expenses. It also can help provide growth to your business, allowing you to make necessary business-related purchases for the things you need to expand.

The other option, a small business loan, can be a great choice providing low rates for small businesses. The unfortunate side of this is that you have to have a good credit history to qualify for a small business loan.

If you are able to get an SBA loan, you should. However, it is not a realistic option for every small business owner due to all of the requirements.

Heavy Equipment Financing Calculator

You can calculate what kind of financing options you have by contacting us at ROK Financial. Our team of experienced business advisors are here to help you through the process and help you learn more information about your financing equipment options.

Applying For Equipment Financing With Bad Credit

If you need heavy equipment financing and have bad credit, you are not out of options. While it may be more difficult for you, it is still possible to get financing options for the equipment you need for your company.

If you have bad credit but need construction equipment financing, there are alternatives such as non-traditional financing companies who can help you get the equipment you need. Going through equipment financing banks is not the only option that will still help you get the financing for your equipment.

For business owners who have a less than stellar credit score, feel confident in contacting ROK Financial for advice on heavy equipment financing with bad credit.

If you want to obtain a small business loan to purchase heavy equipment for your company, there are a few variables to consider. Having a good credit score will allow you more loan options, but other factors play into what kinds of loan options you are eligible for.

The length of time you have had your business and the income your business yields every month consistently can aid in helping you get a small business loan for your equipment.

While these variables may be more strict if you are looking at bank loans, alternative lending companies, like ROK Financial, have more reasonable requirements to help businesses that may just be starting out and need a hand to get going.

How To Apply

To apply for construction heavy equipment financing, you can contact us to find out what options your company has and what type of financing or loan option would benefit you the most. Depending on which type of financial aid you choose, the process time may vary. You can trust that at ROK Financial we will do everything we can to get you the funds you need to keep your business operating successfully.

What To Do Next

Applying for construction heavy equipment financing can be a stressful process. Make sure that as a business owner, you are following steps for stress management.

According to statistics, financial worries are the number one stressor for small business owners. This can be even more true for business owners who require construction heavy equipment to operate. It can feel incredibly taxing knowing that your business’s survival rate depends on having the resources to obtain these expensive items.

Especially with the pandemic this past year, finances have been a big stress for everyone. In a time when the entire world is stressed out and businesses are closing left and right, it’s never been more important to prioritize taking care of yourself and your employees.

When you take stress management as a small business owner seriously, you will have a clear head to make crucial financial calls to ensure your small business survives.

Remember, here at ROK Financial, we want to support a healthy you creating a successful business in any way we can. Reach out to us today for financial advice from our experienced and knowledgeable financial advisors.

If you have a small business, you may find yourself needing a loan to cover everyday business expenses, equipment, or even payroll. Various high- and low-risk options exist for many different needs.

What is a small business loan? We’ll explain small business loans, the loan programs available to you, how to get a small loan, what type of credit you need, and the steps necessary to get a loan.

Small Business Loan Explained

What is considered a small business loan?

Small business loans allow existing or startup companies to borrow money from various lenders. Various loan types exist to help entrepreneurs meet different goals. The way each loan works depends on the type of loan.

What Loan Programs Are Available for Small Businesses?

There are several loan programs available to fit different business needs.

Small Business Line of Credit

A small business line of credit works similar to a credit card. Your business will have a credit limit and will pay back interest only on the amount of credit you use.

You can withdraw from and repay the line of credit over and over within your credit limit.

Small Business Credit Card

A small business credit card works like a personal credit card with interest that accrues on unpaid amounts.

Unfortunately, small business credit cards are exempt from the Credit CARD Act of 2009. So, watch for increases in fees and interest.

Accounts Receivable Financing

Accounts receivable financing allows you to sell outstanding accounts receivable or unpaid invoices to your lender. The lender will pay you what you would have eventually earned from those accounts or invoices.

You will need to pay the lender a fee, and the loan amount depends on the age and quality of the outstanding accounts. Accounts receivable financing can cost more, especially if your business doesn’t have good credit.

Working Capital Loans

Working capital loans finance everyday business operations, such as payroll, rent, and outstanding bills.

Working capital loans usually have shorter terms and are available in lower amounts than other types of loans. Because of the risks involved, lenders often will link these types of loans to your personal credit.

Equipment Loans

If your small business needs new equipment or needs to replace old equipment, they can get an equipment loan.

Equipment loans require less documentation, so you receive money more quickly than for some other loans.

SBA Small Business Loans

What is the safest way to carry a small business loan? SBA loans are the safest small business loans because they have flexible terms, lower interest rates, and provide a government guarantee to your lender.

The U.S. Small Business Administration guarantees SBA small business loans up to $5 million. The guarantee covers 85% of loans up to $150,000 and 75% of larger loans.

However, these loans are harder to get because of the SBA guarantee.

What is Required to Get a Small Business Loan?

What is required to get a small business loan is to decide on a lender, but typically you’ll have to provide 3-6 months of business bank statements. When working with traditional banks may have to provide a business plan, and a large amount of documentation.

Decide on a Lender

Here are a few available lending options:

• Direct online lenders: may cost more, so they are best for quick cash or if you can’t get a loan from a traditional lender.
• Commercial banks: may be more challenging to get, but you can often lock in lower starting interest rates.
• Community banks: focus on your entire credit report and business aspects, which may help if you don’t have a great credit score.
• SBA-backed bank lenders: may be difficult to get but require lower down payments, lower interest rates, and have longer repayment terms.

Build Up Personal Credit

If your personal credit score is lower than you would like, pay off some debts to build up your score, or work with an agency to help boost your credit.

Build Business Credit

You should incorporate or form an LLC, open accounts in your business’s name, and get a federal Employer Identification Number (EIN). Doing these things starts to establish your business credit and build your business credit score, which in turn can help establish larger loan options to you in the future.

Create a Business Plan

Your business plan will show lenders how you plan to use your loan or how it will make your company more profitable. Business plans are typically needed when working with traditional lenders. When working with an alternative or online lender, business plans are generally not needed.

Consider Collateral

Some types of loans require collateral such as equipment or real estate that the lender can seize if your business cannot repay the loan.

If you don’t want to gamble with physical assets, you can choose an unsecured loan. However, unsecured loans usually have less favorable terms.

Do I Need Good Credit to Secure Funding?

Your personal credit score is something that lenders consider when deciding whether to lend money to your business.

What credit score is needed for a small business loan?

A good credit score is any score above 700, while an excellent score is above 800. 680 is usually the minimum score you need for a small business loan. However, you may find a short-term, high-interest loan with a credit score as low as 550. Typically alternative or online lenders have options for all credit profiles.

What is the interest rate on a small business loan?

You can expect to pay a 3%-7% interest rate on your small business loan, but it will vary depending on your lender and your credit score.

The Steps to Apply and Receive Startup Funding

What is needed for a small business loan for a new business?

1. Outline the reason and amount for your business loan.
2. Build up personal and business credit.
3. Review borrowing options to determine the best loan and lender type.
4. Use a business financing advisor to help if you’re still unsure where to start.
5. Apply for the loan.

Our experienced financial business advisors are here and ready to help you through this process to get the business financing your business needs!

Small businesses need help now more than ever, and that may mean a loan to help you through these challenging times. The good news is that you have plenty of options as long as you know how and where to get a small business loan.

You may want to start by setting yourself up for success through learning the small business loan requirements and what you can do to improve your standing.

Requirements to Apply for Small Business Loans

While specifics may vary slightly, the general small business loan requirements include the same primary elements.

Credit Scores

Since you assume responsibility for the small business loan, your credit score matters and plays a large part in determining the loan amount. Keep in mind that if you have more than one owner, the bank will want to see credit scores for everyone, along with the overall business credit score.

Before heading to the bank to apply, it may be in your best interest to check your credit report for any inaccuracies. Also, if you are close to a higher threshold, you may want to take steps to boost your score that little bit.

Business Banking Records

The bank needs to see your business banking records to assess the foundation and assign a rating, which determines how much the business can borrow. Try to abide by the following tips to make sure you are in good standing:

• It’s ideal to maintain a steady balance with regular deposits to demonstrate consistent revenue and responsible financial management.

• Present a balance sheet showing assets, liabilities, and owner equities. Try to reduce liabilities as much as possible before applying.
• Avoid overdrawing your account and set up overdraft protection.
• You may want to ask for a bank reference from your company’s banking institution. It could go a long way in convincing a lender.
• Of note, most lenders like to see companies in business for two years, so you may be asked to show time in business as well.

Keep in mind that there are key numbers the bank will look at when determining your rating and loan amount. Lenders like to use a broad approach, so they will want annual gross sales along with monthly numbers for the following:

• Gross margin
• Cash flow
• Debt to equity ratio
• Accounts payable and accounts receivable
• Earnings

Industry Size Standards

To qualify as a small business, you need to meet the size standards for your industry. Each industry has unique standards for the number of employees you can carry and still be considered a small business. Make sure you know the size standards for your industry and abide by that number.

List of Collateral and Assets

Some lenders ask for collateral while others do not. However, most lenders request that you list company assets on the application. They want to know what could cover your obligations in the event you can’t repay the loan.

Business Plan

Numerous SBA loans require you to furnish a business plan. Even if it’s not a requirement for your application, you may want to include it to round out your application. It’s an excellent way to show the lender how streamlined your operations are and how you actually make money.

What Is Your Best Option?

Even if you don’t fulfill all of the small business loan requirements, like time in business, you have options. Some companies may have unique options, like small business loans for women.

Lump-Sum Loans

Traditional business loans provide the funds as a lump sum and set you up with a repayment plan. Keep in mind that it can take a bit of time to secure a small business loan, so if you need the money sooner, you may need to go a different route.

Business Line of Credit

Instead of taking on a loan, you could get a business line of credit that provides access to funds sooner. You can spend up to the established amount and pay interest on what you use.

SBA-Backed Loans

SBA-backed loans open doors that traditional lenders don’t. There are three primary types with unique qualifications and arrangements.

• SBA 7(a) loans, the most common type, have set requirements, including having real estate as part of the business purchase.
• SBA 504 loans offer long-term, fixed-rate financing for specific purposes, like real estate or machinery repairs.
• SBA microloans are smaller, $50,000 or less, and earmarked for startups or expansions.

Secured Business Funding vs. Unsecured Business Loan

You may hear these terms tossed around as you research options. The difference between a secured and unsecured business loan is collateral. Secured business funding options require collateral to get the loan, while unsecured business financing usually involves a credit card or line of credit.

How to Obtain a Small Business Loan with Bad Credit

Though most lenders require a personal credit score between 600 and 680, having bad credit doesn’t mean you’re out of luck. It’s possible to secure financing through alternative lending sources, even with a lower credit score.

If you apply online with an alternative lender, you may pay a higher interest rate, but they will look at the whole picture of your business, primarily annual revenue, cash flow, and any collateral you can provide (but is not necessary).

Where to Apply for a Small Business Loan

Knowing where and how to apply for a small business loan can be overwhelming, but with a little research, you can get there. ROK financial offers various options to meet your business needs, without the restricted qualifications most banks require.  Apply now to connect with a knowledgeable financing advisor who can help guide you through the process.

Entrepreneurs and small business owners drive the US economy in good times and in bad. There are 30.7 million small businesses in the US, and 98.2% have fewer than 200 employees.

Small businesses share one crucial quality – they need occasional short-term financing or larger, longer-term small business loans for those with ambitious business plans. The challenge is, banks turn down 80% or more small business loan applications.

Wondering how to go about getting a small business loan? The good news is there are many new small business loan options and online sources available. We’ve got a quick guide to qualifying for a small business loan, the types of loans available, and tips for quickly getting approval for the best loan for your small business.

Benefits of Small Business Funding

So, what type of funding do you need? Wondering “where can I go to get a small business loan for a new business?” Small business loans can help you reach many of your business goals. They can help you keep control of your profits and business, avoid problems with loans from family or friends, and protect you from putting your personal assets at risk.

Your need for capital will vary from smaller, short-term financing for purchasing equipment, buying new or additional inventory, and leasehold improvements to more extensive, longer-term loans for expansion projects and growth.

At other times you may only need a simple line of credit to purchase products and services, meet payroll, or finance accounts receivable. CB Insights reported 29% of businesses failed because they ran out of cash, despite the new options for small business loans.

What Do I Need to Qualify for a Small Business Loan?

Let’s look at what can improve your chance of qualifying for a small business loan: a strong personal credit score, steady business revenue and positive cash flow, at least three years in business; business collateral; and a lower risk industry profile.

If you have a low personal credit score or are a new business startup, don’t despair. Depending on your business and your small business loan source, you have other loan options for Small Business Loans and Equipment Financing.

What Types of Loans Do I Qualify for?

Here are several types of loans you may qualify for:

• Small Business Administration (SBA) loans – up to $5 million, including PPP loans available in as few as 45 days
• Term loans – 6-month to 10-year terms for up to $5 million in; approved in 1-3 days.
• Lines of credit/merchant cash advances – short-term credit to manage cash flow, meet payroll or buy new inventory; 1-3 days approval
• Equipment/accounts receivable/asset-based financing – $10,000-$5 million; 1-5 days approval.

You may qualify for the best loan rates with as little as three months in business and $15,000-plus in monthly sales. Many of these loans have no minimum FICO score, and bad credit may not be a barrier to approval.

Easy and Efficient Way to Apply

We’ve got a wealth of small business loan possibilities whether you need $10,000 to finance new equipment or $5 million to expand and grow your business. If you’re wondering how to get a small business loan with bad credit and no collateral, or where can I get a small business loan with bad credit, take a look at our loan resources for more help.

Need help with how to go about getting a small business loan? Ask one of our Business Financing Advisors about the best loan options for your business. Fill in our 15-second online application form to Apply Now for better terms, lower interest rates, or new funding.

Are you looking to get your business off the ground with a commercial construction loan?

A commercial construction loan ensures that you receive critical funds when necessary, but it does not rack up a lot of interest because of its short-term advantages. Depending on your business needs and goals, there are plenty of financing options to consider.

We break down the different types of small business construction loans, how to apply, and how your business can increase its chances of qualifying for financing.

Types of Commercial Construction Loans

You will need to obtain most commercial construction financing through banks and commercial construction lenders. As you decide on the right construction loan, understanding and applying for the ideal financing option can raise your chances for success.

Below are the most common types of commercial construction and land development loans:

• Land development loan – ideal option when you have undeveloped or raw land that needs to be construction ready. Land development loans can go toward installing water, sewer, or power lines on the property
• Interim construction loan – a short-term option that is utilized to cover material and labor costs for a project in commercial development
• A&D (acquisition and development) loan – covers the cost to purchase land and the improvements needed for existing buildings and infrastructure. A&D loans are perfect for a deteriorating or underutilized property that has already been developed
• Mini perm loan – this short-term financing option helps fund an unsettled construction loan for commercial building that would drive income when completed
• Takeout loan – delivers permanent financing for projects where a temporary loan is in place
• Merchant cash advance (MCA) – this financing option is useful because a financing company delivers funds upfront in return for a percentage of the company’s future sales.
• Equipment Financing – can be used to purchase or lease equipment for the business

Applying for a Small Business Loan

Applying for a small business loan can be an efficient process once you understand these steps:

• Evaluate how much money you will require – outline a clear plan of your goals, how you will succeed in reaching these milestones, and the necessary capital to make this happen
• Determine which loan type meets your needs – the most common types of loans are commercial bank loans, SBA guaranteed loans, equipment loans, business line of credit, microloans, and accounts receivable financing
• Confirm your credit scores – you will need to check both personal and business credit scores
• Assemble the necessary documentation – you will need your company’s financial statements, financial projects, business tax returns, bank statements, licenses, and leases
• Know the exact value of your collateral – understanding this will increase your chances of getting a loan
• Shop around and apply for a business loan

Is a Business Line of Credit Best for Your Business?

A business line of credit is much like a business credit card. You have access to a max balance of money you can withdraw whenever you need it. In return, you make a minimum monthly payment based on the current loan’s balance.

In addition to the borrowing limit, you only pay interest toward the money you take out. You have the option to pay the minimum amount of the full balance each month. When you repay any borrowed money, you earn the right to withdraw these funds again up to your borrowing limit.

There are several reasons why a business line of credit can be advantageous commercial loan options. First, a business line of credit can smooth out cash flow. Not only can you pay your bills promptly, but you can earn discounts for automatic payments. A business line of credit also delivers financial support when your cash inflows from busy seasons cannot cover the lean months.

When you need to take advantage of a prime opportunity, a business line of credit can help push your business over the top. When your company wants to expand, increase marketing efforts, or participate in community events, a business line of credit can help invest in the necessary resources.

A business line of credit also puts these into perspective for what you need for the business. Typical loans can penalize you if you guess too high or low. A line of credit gives you a maximum balance of your cost estimates. Therefore, you only use what you need and pay interest on your usage.

Before you proceed with a business line of credit, it is essential to understand some of the drawbacks:

• Expensive – although not as costly as a business credit card, business lines of credit come with higher interest rates, occasionally over 20%.
• Time-consuming application process – the extended process requires you to provide personal and business bank statements, personal and business tax returns, profit and loss statements, resumes, and other business documents.
• Low limits – business lines of credit will typically have higher limits than a credit card but have a lesser limit than an installment loan.

Other Options: Equipment Financing

Equipment financing is when you utilize a loan to invest in equipment for the business. These equipment loans allow for periodic payments, which include principal and interest payments throughout a fixed term. After you pay the loan in full, you own all equipment exempt from any lien.

When you are opening a new location and need to fill the place with the necessary equipment, equipment financing is crucial. If it is a restaurant, you can utilize the loan for a refrigerator, oven, and commercial range.

Using a Commercial Loan Calculator

A commercial construction loan calculator helps you understand the true cost of your commercial loan. To effectively use the calculator, you will need to input information like the loan amount, term, and interest rate.

Once you complete the calculation, you can also view the loan amortization table. This table outlines the amount of each payment throughout the entire term. It also communicates the mortgage payment amount and how it affects your total interest and loan balance.

Where to Apply for a Commercial Construction Loan

The best commercial construction loan lenders are typically intermediary institutions that are SBA-approved. You can search your local area for credit unions, banks, and private lenders that provide 7(a) loans.

If you decide to go with a CDC/504 loan, you can approach a non-profit CDC that is also SBA-approved. Credit unions and banks can also provide traditional loans, mezzanine loans, and SBA loans. If you want to go the hard money lender route, you can work with a private lender to assist with short-term loans for commercial construction.

Money is a necessity in any business. If you don’t have a constant flow of money in your business accounts, you won’t be able to keep things going.

If you find yourself low on capital or in need of funds to invest in your business, you may need to seek out a business loan. A common option is a 50k business loan.

However, you may not know where to look or what options you have. Educating yourself before the need arises can be helpful. It will allow you to know exactly what to do when you need to seek out that 50k business loan.

What Is Required to Qualify for a $50K Business Loan?

When it comes to how to get a 50k small business loan, you need to figure out if you qualify. Each lender may have specific requirements you must meet to secure a business loan, but there are some general qualifications you should meet.

You should note there may be special situations, such as 50k business loan COVID requirements, that may alter how lenders qualify you for a loan, but you should be able to use the following as general guidelines to get yourself ready to apply for a loan.

Lenders will typically look at your current financial situation when assessing your eligibility for a loan. This assessment will include conducting a credit check, looking over your financial records, and checking for any outstanding loans you currently have.

Lenders will also assess your business, looking at the assets you have and your general business health. How long you’ve been in business and your standing with investors will also factor in.

You should use a business loan calculator to figure out how much you need. You may find you don’t require a 50k business loan. If you can request a smaller amount, the requirements may ease up for you, so keep that in mind. May lenders will provide a tool to use as a 50k business loan calculator or you can do an internet search for one.

4 Best Options to Access a $50K Business Loan

Whether you want a loan to start a business or make an investment in an existing business, there are many places you can go to find a lender. Here is a look at four of the most common options business owners use to get the funds they need.

1. Conventional Loan

The first thing most people will consider is a conventional loan. However, these loans are often difficult to get, especially if you are starting a business. It is going to be a hard time getting a 50k business loan without having a lot of proof to show the bank that you are not a bad risk.

2. Small Business Association Loans

An SBA loan does not come directly from the SBA. Rather, the SBA guarantees the loan, which lowers the risk to the lender. You will go through a lender to get the loan, and you can use any lender approved to offer such loans.

Government small business loans or government loans to start a business differ from small business grants. You may also want to check with the SBA for a grant, which is money you do not have to repay. You probably cannot get the full 50k small business loan, but you could get a portion, reducing the amount you need to borrow.

3. Alternative Lenders

Another option is an online lender that works similarly to a bank but specializes in lending products for businesses. They usually streamline the application process and are more willing to work with you and approve your loan than a traditional bank. Plus, they offer a range of products to suit almost any need.

4. Business Line of Credit

The last option is a business line of credit. This works similarly to a credit card. You secure the line of credit from the lender of your choice and then use the money as you need. You can get a 50k line of credit and only use the amount you need so that you avoid overborrowing. You don’t pay for what you don’t use.

This is a nice option if you need working capital and don’t need all the money upfront. It can help with cash flow in your business by providing money you can draw on as you need.

Where to Apply for a Small Business Loan

To know how to get a startup business loan, line of credit, or another type of loan, you will need to know where to apply. The most likely options include:

• Traditional banks
• Online business lenders

Traditional Banks

Traditional banks are often the most difficult lender to work with because they usually have complicated application processes. They may require a huge amount of paperwork, and they are less likely to give you a 50k business loan with bad credit.

Alternative Lenders

Alternative lenders who focus on business lending may be the easiest option. They generally try to make the process simple. They try to move your application quickly and can do so because their business focuses on only one area of financial services.

A traditional bank handles all types of financial services, from personal banking to business transactions. An online business lender doesn’t have all that extra work, so they can give you the attention you require and work with you to help you qualify for the loan you need.

Obtaining a Small Business Loan

Securing a 50k business loan should not be something you can never accomplish. There are so many options out there for you to use to get the financing you need.

The key is to find what type of product and what type of lender best suits your situation so that you have a higher chance of approval. Apply now and speak with one of our experienced financing advisors to learn what small business loan option is best for you.

Some retailers may find it challenging to rebuild their business’ cash flow after the holidays. If you’re struggling to keep up with your inventory and fluctuating cash levels, there are several solutions available to help you cover your losses.

One of the ways you can get additional resources to get your business back in order is by applying for a retail store business loan. For those who are struggling, this might be the best option for you.

How Can a Small Business Loan Benefit Your Retail Store?

Loans for retailers work similarly to how other business owners use them for their businesses. You can use a small business loan to pay for several aspects of operation. With access to extra funds, small retail business loans can help your brand grow.

Using business loans for retailers can give you the funds to acquire equipment and technology to run your business efficiently. These items might include cash registers, bookkeeping software, security systems, signs, and inventory tools.

Some people also use loans to pay for different marketing campaigns and renovating the facility.

Another benefit of using a small business loan for your retail store is hiring new employees to create a more reliable experience for your customers and tackle the busier seasons. The more satisfied your clients are, the more likely they’ll continue doing business with you and help you gain capital.

A business owner may also use a retail store loan for purchasing more inventory to accommodate for special promotions or holidays. The amount you take out could also depend on what your retail store sells, whether food, clothing, or beauty products.

What It Takes to Qualify for a Business Loan

Before deciding on applying for a retail business loan, there are several qualifications you must meet to make the application process run smoothly.

When applying for a small business loan, you’ll need a few crucial paperwork items. Although certain lenders have different policies for what documentation they require, some of the most common ones include:

• Personal and business tax returns
• Personal and business bank statements
• Personal identification, such as your driver’s license
• Balance sheets
• Commercial leases

Another component you’ll need to qualify for small retail business loans is a record of your credit score. By knowing your credit score, lenders are more likely to trust you in repaying your loan, especially for startup businesses.

Several lenders may also ask about your time in business. While most of them may qualify you for a loan if you’ve been in business for at least two years, some may offer alternatives for new business owners. A loan for a small retail shop can cover its finances for about a year.

When Hiccups Happen, What to Do

Sometimes, you’ll run into obstacles that may affect your retail store’s cash flow. Circumstances outside of your control, such as recessions or pandemics, may prompt you to find new ways to stabilize your income.

Typically, it would be best for you to take out a retail store business loan before a recession hits. While it may be impossible to predict if one can occur, it’s a good idea to have a loan on hand to gain greater access to the cash you can use.

Another solution that would be wise for you is setting aside finances to backup your business. By having these funds on hand, you can provide additional financial support for your company.

If you create a backup plan for emergencies, you can set resources aside to start up your business.

Retail Loan Options

When it comes to navigating how to get a loan for a retail store, there are several options available. Some may offer more flexibility than others. Make sure to compare and contrast to determine which one will best fit your brand’s needs.

If you’re interested in expanding your existing retail store, you may want to consider SBA 7(a) loans. You’ll typically need your store to operate on profit and have reasonable equity for investing.

Unsecured business loans could be an ideal option for retail owners who prefer having their stores stocked up with the products they want to sell.

Retail inventory financing is a strategy best suited for experienced retail owners. This line of credit gives small business owners access to buy their inventory. You can use the inventory as collateral against the loan and surrender it if for some reason you’re unable to repay the loan.

Line of credit works similarly to how people use personal credit cards. You can use and pay these funds multiple times if you stay within your credit limit. If you pay on time, you can build credit and earn a higher limit.

How to Apply for a Retail Loan

If you’re wondering how to get a loan for a retail shop, several application processes have similar steps to follow.

One of the essential things you’ll need to consider before applying is determining how much to take out your retail store business loan. Regardless of how much you qualify for, think about what’s reasonable for repayment.

Also consider what you want to spend your loan funds on, whether inventory, equipment, improvements, or employee salaries. This will determine what types of loans are available to you, as well as what the limits and repayment terms are.

To apply for a retail loan, you’ll need to provide financial documents for yourself and your business. Contacting a trusted lender to initiate the application process is easy, and your lender can answer any questions you may have while processing your information.

Ready to Apply for a Retail Loan?

Whether it’s post-holidays or your company is recovering from another financially challenging scenario, a business loan could be the perfect solution to your needs. If you’re ready to apply for a retail store business loan, contact ROK Financial today to learn what you may qualify for and how our team can help!