Top Agencies That Specialize in Lending to Small Business Owners


Jeffrey Bumbales

Every small business needs money to make money. That’s just the name of the game. But not every small business owner has huge lump sums of money sitting in their savings accounts ready to be tapped into to start up the business and get it running.

In these common cases, a small business loan is warranted.

These days, small business owners have options when it comes to what door they want to knock on when it comes to applying and getting approved for a small business loan.

Let’s have a look at the top agencies offering small business loans to entrepreneurs, the types of options they offer, and the criteria needed to get approved.

Banks Offer Fairly Low Rates, But Slow Funding Times

The typical place to look to when it comes time to apply for a small business loan are the big banks. This has traditionally been the option for entrepreneurs who needed some financial assistance to find their business expenses.

Banks offer a number of loans to business owners, including:

Term loans – These can either be secured (with collateral) or unsecured (with no collateral), and reach maturity anywhere between one to 7 years. Interest rates typically range between 5.5 and 8.5 percent.

Start-up loans – These loans are provided to entrepreneurs who are looking to start a business from the ground up, and typically have payback periods that last as long as 5 years with an interest rate of between 5 to 7.5 percent.

In order to apply for a bank loan, you’ll need to provide a number of pieces of information, including:

  • Business niche
  • History of business
  • What the money is needed for
  • Credit score
  • Collateral
  • Other debts
  • Value of existing assets

The application is usually made in person with a banking professional and can take quite a while to fill out considering the length of the document. Once you submit the completed application, it will then be sent off to be analyzed by underwriters to ensure that you are financially healthy enough and capable of making regular payments to pay back the loan.

This process can often take weeks to complete before you hear an answer and the lending criteria with banks is also quite stringent. Typically, banks require the following from consumers who are hoping to get approved for a loan:

  • Credit score over 700
  • Lengthy business history
  • Proof of profitability in business
  • Lots of collateral
  • Healthy debt-to-income ratio
  • No history of bankruptcy

Unfortunately, many entrepreneurs are unable to fulfill all these criteria, which is why many have been looking elsewhere for a small business loan.

Small Business Association (SBA) Loans Have Lower Rates & Slower Funding Times

Another way for entrepreneurs to find a bank loan is through the Small Business Administration (SBA), which can direct you to banks and lenders that provide loans that are guaranteed by the government agency. That way, you have the benefit of approaching banks with specific interest in lending to small businesses.

Small business owners should get in touch with their local SBA office to find a bank that works with the SBA.

Banks and lenders that grant SBA loans place a focus on business plans, profit and cash flow when deciding whether to approve for a loan.

The types of loans that the SBA offers include:

  • 7(a) General Small Business Loans – This is the SBA’s most popular program that includes financial assistance for small businesses with special requirements.
  • Microloan Program – This program offers small, short-term loans to small businesses to cover various business expenses.
  • CDC/504 Real Estate & Equipment Loans – This program offers financing for major fixed assets, including real estate or equipment.

In order to be eligible for loans backed by the SBA, your business must:

  • First must be turned down for private financing
  • Meet the SBA’s size requirements
  • Meet specific requirements depending on the type of loan
  • Meet lender qualifications

Alternative Online Lenders Have Financing Options For Every Need

These newer financial technology lending firms have become a popular choice for an increasing number of business owners because they are easier to apply to and get approved for.

While the interest rates for these options tend to be higher than what the bank charges, the odds of getting approved are much higher, and the funds are provided really quickly.

Here are some examples of the types of funding offered by online lenders:

  • Unsecured short term loan – You are given a limited amount of money for short term expenses without the need to put up collateral, which usually needs to be paid back on a daily basis, along with the lender’s fees.
  • Equipment financing – Your lender will give you the money you need to buy the equipment your business requires. The loan is paid back within a certain time period, along with the lender’s fees;
  • Business line of credit – You are given a sum of money from your lender, and are free to withdraw any amount of money you need as long as you don’t exceed the limit. You can continue to borrow from this account as long as the amount is always paid back, and interest is only charged on the amount outstanding;

Qualifying for these types of funding solutions is easy. Simply provide your business niche, length of time in business, credit score, amount of money required and any other debts you have, then submit the application online.

The lender will review it and let you know if you’re approved or not within a couple of days, with the money deposited into your account soon afterward.

These alternative lenders don’t place as much weight on your credit score or collateral as banks do. As such, the odds of getting approved are much higher, and the cash you need can be accessed almost immediately.

Credibly – Helping Small Businesses Gain Access to the Most Convenient Loan Options

Every small business deserves a fighting chance at becoming successful. There’s no reason why a financial hiccup or two should stand in the way. And at Credibly, we help small businesses push through these obstacles by helping them apply and get approved for a small business funding option that will give them what they need.

To get some assistance with your businesses’ working capital needs, contact Credibly today.