What are small business loans?
Current or aspiring business owners may need money to fund business activity, purchase an existing business, or grow a business from scratch. Unlike large corporations, small businesses may have fewer assets and less cash. Therefore, qualifying for financing can have challenges. Luckily, with a bit of research and preparation, small businesses can obtain a small business loan. Small business loans can be traditional business loans, inventory loans, lines of credit, or any other type of business financing. The only difference is that these loans will be extended to small businesses. With small businesses being the heart of communities, lenders and investors are willing to extend a helping hand in the form of funding. However, they will need to have a certain level of confidence in the business and its ability to repay. As a small business owner, make sure you have documents organized before applying for a loan and only make reasonable requests. Biting off more than you can chew can destroy your business that you’ve worked so hard to build.
Can you get a $60k loan for your business?
Small businesses can get a $60k business loan, and it may be easier than you think. While $60k may sound like a lot of money, it’s truly not in the world of business loans. Small business loans average around $663,000. You can now understand why a $60,000 business loan may not actually be that hard to qualify for. Requirements can vary depending on the lender, but most importantly, you and the lender will need to be confident that you are capable of repaying the loan. Lenders often assess ability to repay in terms of credit score, revenue, time in business, and other factors. To estimate monthly payments you can use a payment calculator or go ahead and get prequalified. If you are concerned about covering the monthly payment, you should probably avoid financing. All great business owners take risks, but only ones they can manage.
Types of business financing options available
As a business owner, there are several financing options available. The type of financing that is best can vary depending on your situation. Although financing options are not limited to the types listed below, these are some of the most common types of business financing options.
- SBA loans: The Small Business Administration (SBA) works with SBA-approved lenders to extend loans for small business owners. SBA loans are partially backed by the federal government, thus reducing the risk for the lender and allowing the business owner to access lower rates and larger loan amounts. The downside of SBA loans is they can take months to qualify for. And you know what they say - time is money.
- Online business loans: With thousands of lenders just a click away, it’s no wonder online business loans are at the top of our list. Afterall, as a business owner, you’re especially pressed for time. Online business loans can offer perks such as faster funding times, less strict requirements, easy access to offers, and competitive terms. The most important thing to consider when transacting online is the safety of personal information. For this reason, it’s best to work through a platform such as PrimeRates that can connect business owners to a network of vetted and trusted lenders.
- Term loan: A traditional term loan can be obtained through a bank, credit union, or online lender. Term loans are typically funded as a lump sum and repaid in equal monthly installments with interest. Term loans for businesses should only be used for business expenses, but there are usually little to no restrictions.
- Line of Credit: For companies that need access to cash on a regular basis, a line of credit is ideal. A business line of credit works similarly to a credit card in the sense that it’s revolving and you only need to repay what you draw. A business line of credit is generally secured by an asset, which means there is some risk involved.
Pros and cons of $60k business loans
Business loans can fuel your business to reach the next level. However, they can be risky, and are certainly not free. Before taking out a loan you need to consider the pros and cons. Furthermore, you should make sure you fully understand the terms. With a $60,000 business loan you’ll likely be making payments for quite some time. The longer you make payments, the more the loan will likely cost you. As with any investment make sure you carefully consider the ups and downs of a business loan before moving forward. Here are some basic pros and cons of a $60k business loan.
- Create opportunity to grow faster
- Improve cash flow
- Borrow money without giving up equity in your business
- Personal guarantee (credit may be impacted if you default)
- May not provide enough funding to achieve goals
What is the minimum credit score required to qualify for a $60k business loan?
Even though you’re applying for a business loan, your personal credit score matters. Small businesses are often sole proprietorship which means you are fully responsible and accountable for commitments. While business credit score can be considered, personal credit score is extremely important. While you may be able to get by and qualify for a small business loan amount with credit challenges, when you start to get into more sizable amounts such as $60,000, good credit will become even more important. To qualify for a $60,000 business loan you should have a good FICO score which falls in the range of 670-739. If you have a lot of current debt or a low credit score, you may need to back the loan with collateral.
What are the monthly payments on a $60,000 business loan?
Monthly payments can vary. For example, if you have a 7-year term versus a 10-year term, the payment will vary significantly. Furthermore, interest rates can impact monthly payments. The best way to estimate a monthly payment for a $60,000 business loan is to get prequalified or use a payment calculator. While we can give payment estimates, they truly don’t mean anything since you may qualify for different terms. Monthly payments can range from several hundreds of dollars to thousands of dollars.
Is it difficult to qualify for a business loan?
The difficulty of qualifying for a business loan can vary depending on the type of loan and loan amount. Larger business loans will be harder to qualify for. If you’re lacking in revenue or credit score, you may need to back the loan with collateral. If you have the right qualifications that the lender is looking for, qualifying should be easy. You can reach out to the lender of your choice before applying to find out what basic requirements you need to meet.
Can I get a business loan with no money down?
Business loans can be secured with no money down. If you need a zero down business loan, consider an SBA loan or microloan. A microloan is a small business loan, in terms of amount. In addition, you could use a secured loan which allows you to back the loan with collateral rather than money down. Remember, there are plenty of business loans to choose from so compare your options carefully and find the one that works best for you. To compare business loan offers, visit PrimeRates.
How to qualify for a $60,000 business loan
Qualifying for a business loan involves some preparation. Ideally, you have some time in business accumulated and some success. To qualify for a loan you’ll likely need to provide financial documents, so be sure to submit accurate information on the application. Here are some steps that will put you on the path to qualifying for a $60,000 business loan.
- Check your credit score (make sure there are no easy improvements)
- Determine what type of loan you want to use
- Determine how much you need to borrow
- Prepare financial documents and tax returns
- Compare offers
Are business loans a good idea?
Business loans are often the difference between success and failure. If you fear that they will destroy your business, they are probably not a good idea. However, if you feel that a business loan will help you achieve goals and bring your vision to life then they are likely a very good idea. While we can consult in general terms, we cannot speak for your personal or professional situation. If a business loan benefits you and you can qualify for reasonable terms, you should pursue a business loan.
Apply for a $60k business loan and get started
Securing a $60k business loan online is likely your best option. At PrimeRates you can unlock loan offers you actually qualify for within minutes. This means more time building your vision and less time shopping around for a loan. Checking offers from our network of lending partners does not impact credit score, but it can make a huge impact on the success of your business.
Compare $60k business loan offers with no impact on your credit score. . . apply online today!
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