4 Strategies To Secure The Largest Business Loan Possible

By Megan B. Shepherd

Large business loans can be classified as $500,000 to $5 million or more. You may need a large amount of funding for multiple reasons, such as financing machinery or equipment, purchasing real estate, high-dollar expansion or acquiring another business.

Most business lenders rely on your personal and business credit, time in business, revenue and more to determine whether you qualify for a business loan and, if so, for how much. Getting any amount of business loan can be challenging depending on your eligibility, but securing a larger business loan comes with its own difficulties.

We’ll walk you through a few strategies for securing the largest loan possible. That said, it’s important to take only the amount of funding your business actually needs and can comfortably afford to repay.

Explore online marketplaces

Online lending marketplaces offer a way to connect your business with a network of lenders, typically with one application. These platforms generally include a more streamlined application than banks and traditional lenders.

Plus, online lenders often use other rating characteristics or advanced algorithms to determine your eligibility, and the best online business loans typically have less rigorous borrowing requirements than banks.

Here are a couple of the main advantages of using online marketplaces to secure a larger loan.

Access to more lenders

As mentioned, online marketplaces provide your business with access to a diverse pool of lenders. By completing one application, you’ll be shown multiple lenders that meet your needs and eligibility. This broadens your potential of finding a lender willing to offer you a larger loan and in less time, might I add.

Competitive terms

With access to more options all at once, you can compare multiple business loan terms more easily for the business loan you need. This way, you have a better shot at getting the lowest interest rates, longer repayment terms and other more favorable loan terms.

Consider specialized loan types

When seeking large business loans, it's crucial to explore specialized loan types that cater to specific business needs or eligibility criteria. A couple of noteworthy options include Small Business Administration (SBA) loans and equipment financing.

SBA loans

SBA 7(a) loans are a popular choice among business borrowers. These loans are a versatile, government-backed financing option particularly beneficial for larger business loans — as you can secure funds up to $5 million depending on eligibility.

Lenders partner with the SBA to fund these loans, and the SBA then guarantees a portion of the loan. Having a portion of the loan backed by the SBA means lenders are taking on less risk, which allows them to keep rates low and businesses to have a chance at securing more favorable terms. Plus, the SBA caps interest rates based on your loan amount, and repayment terms can extend up to 25 years.

Equipment loans

This type of loan is specifically for buying equipment for your business. These loans use the equipment itself as collateral, making them more accessible, even for businesses with less established credit histories. Equipment loans generally offer up to $5 million in funding, with repayment terms of up to five years or more. And you could see funding in as soon as 24 hours with some lenders.

Put up collateral, opt for a secured loan

A final enduring strategy to secure a large business loan is to offer up collateral. Collateral provides lenders with security, mitigates risk and allows lenders to offer businesses larger loan amounts with better terms. Secured business loans are much easier to qualify for and generally give you more flexibility among business loan options.

You may consider collateral such as real estate, equipment, inventory or savings. However, keep in mind that if you fail to repay your loan, you risk losing the collateral you put up.

Bottomline

Getting a larger business loan may require a little extra work. Comparing multiple loans at once, looking into specialized loans and considering offering up collateral can help curb any requirement constraints or funding limits you may run into on your journey to securing high-dollar funding.

About the author:

Megan B. Shepherd is a personal finance editor at Finder committed to helping Americans navigate the financial world of loans and insurance. Megan’s expertise has graced the pages of Forbes, Fox, Time, Reviews.com, and carinsurance.com, adding invaluable information related to loans and insurance. Megan’s adept knowledge of financial topics has also led to contributions to reputable publications like Nasdaq and MediaFeed, where she intricately dissects and explains personal loans, financial strategies and smart borrowing tactics

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.