Obtaining a business loan for more than $100k can be challenging to qualify for — but with our foolproof advice, you can determine the minimum criteria to apply for and obtain a $100k business loan. This significant financial boost can help you turn your business dreams into a successful reality.
How To Get $100k Business Loans
There are main factors that can affect whether you will be approved for a $100k loan, including:
- Business history: If you have consistently paid your debts back on the preset repayment schedule, shown consistent growth during the lifespan of your business, and maintained a strong financial record, you have a higher likelihood of approval.
- Business length of time: For businesses less than a few months old, securing funding and money from lenders can be harder. In this case, your best bet is to come up with a detailed business plan and records of favorable personal credit history and loan repayment.
- Credit score: Businesses should have a credit score >80, with individuals having a FICO credit score >600 before they are eligible to apply for a loan.
- Industry: The type of industry you are in can affect the lender’s likelihood to provide funding, as some niches are at a higher risk of financial failure than others.
- Documentation: Getting your paperwork in order, such as invoices, debt consolidation, investments, invoices, agreements, and sales history can paint the entire picture of your business.
Best Business Loans: $100k Or Less
For businesses in need of substantial financial support, there's a wide array of funding options available, each with its unique benefits and considerations. Exploring these options can help you find the best fit for your business's needs.
Business Line of Credit
This business loan, akin to a credit card, offers reduced interest rates, lower fees, and unlimited withdrawal potential. You can customize the repayment plan to your own schedule, giving you the financial flexibility you need to grow your business.
Business Term Loan
A business term loan is a one-off investment that works well when owners understand exactly how much they need to pay for a specific product or service. For example, real estate purchases, structures, land, and equipment require a hefty, one-time investment. Owners will have a lump sum of cash they can use and pay back in regular installments.
Invoice Financing
Invoice financing, or account receivables financing, lets you borrow against unpaid invoices, providing immediate cash flow. This can be a huge relief, especially when waiting for client payments. However, it's important to be aware of the high interest rates and fees that come with this convenience.
The perks of invoice financing are that business owners get paid almost immediately instead of having a weeks-long waiting period. However, this comes with high interest rates, hefty fees, and possible debt.
Merchant cash advance
Another option to use instead of $100,000 business loans is a merchant cash advance. Business owners can borrow money against their company’s credit card sales, encouraging consistent business and allowing for ever-growing borrowing potential. One of the main benefits of a merchant cash advance is that no collateral is required.
Revenue financing
Many business owners can get off the ground running quickly. If you are an entrepreneur with frequent and consistent sales, getting revenue-based financing is an easy and fast way to have a higher borrowing limit that coincides with your business’ growth.
Revenue financing is based on your total revenue, so you can borrow a lump sum of cash and pay it back over a fixed pay schedule.
Equipment Financing
Another type of business loan for $100,000 or less is equipment financing. If you are in an industry that requires ample heavy machinery, equipment, or technology, consider using an equipment financing loan to pay off a lender who can provide cash for a large, one-time investment. With this type of funding, you don't have to provide your collateral.
SBA 7a Loans
In addition to the prior loan options, another choice for your business with a $100,000 or less budget is SBA 7a loans. A Small Business Administration loan is provided by credit unions, financial institutions, banks, and lenders who are members of the SBA network and backed by the government.
Lower interest rates and fees are among the perks of using an SBA loan over other financing options. However, owners must know that they are typically more challenging to obtain and feature stricter eligibility rules than other financing types.
How to Improve Your Chances of Getting Approved for a $100k Loan
Business owners looking to bolster their chances of obtaining a $100k loan should meet minimum requirements to increase their approval likelihood.
Build Your Credit Score
Individuals need a decent credit score to apply for a $100k business loan. You can often use services like Credit Karma, Capital One CreditWise, myFICO, or Credit.com to determine your credit score.
More often than not, businesses need a credit score between 80 and 100 to even qualify for a hearty business loan. In addition to a favorable credit score, applicants should have a DUNS Number to improve their approval odds and obtain an EIN.
Those who need a large loan as soon as possible and do not meet the minimum criteria of >80 can often apply for a sizable loan from a lender but have to settle for a secure loan, showing proof of cash flow or offering asset-backed loans.
Paperwork
Owners must prepare documents ahead of time to show the lender they can repay the debt, demonstrate cash flow, showcase the business's trajectory, and outline the business plan to show they are trustworthy and reliable.
Business owners will have to provide:
- Personal and business taxes
- Cash flow
- Profit and Loss
- Business and personal loans
- Business plan
- Client contracts
- Vendor contracts
Business Plan
One of the most effective ways to bolster your chances of securing a business loan exceeding $100,000 is by updating and enhancing your business plan. A robust business plan that outlines your future growth and company vision can significantly strengthen your loan application.
Include information such as your timeline, organizational structure and hierarchy, five-year plan, and material changes within the company.
Collateral
Another method that you can use to increase your likelihood of obtaining the $100k business loan is to offer collateral to the lender to show that you are trustworthy. Lenders only want to invest in a new business if they are sure they will be repaid in the long term. They are less likely to invest in a small business or entrepreneurial idea unless they have security or collateral in the form of an asset, real estate, or other type of investment.
$100,000 Business Loans
Let’s look at some of the best business loans for $100k or less that you can apply for as a small business owner or entrepreneur.
OnDeck
OnDeck offers two short-term business loans suitable for business owners with low credit scores and minimal experience in their industry. If your business has only been open for a short time and your personal or business credit score is below the minimum rating, OnDeck can still provide suitable funding options.
OnDeck requires approval of a personal credit score of>625 and 1+ years in business. You can choose between short-term loans of 18-24 months and loans between $5k and $100k.
Minimum Requirements:
- 1+ years in business
- >$100k in annual revenue
- Credit Score >625
- Business bank account
Wells Fargo
Business owners looking to open a business line of credit should consider Wells Fargo BusinessLine. This line of credit provides funding between $10k and $150k for businesses with 2+ years of experience.
The BusinessLine and the SBA line of credit offer the owner business rewards, perks, direct access from available credit, and higher credit limits as you build your business’ reputation.
Minimum Requirements:
- Credit Score >680
- 2+ years in business
- Collateral
Fundible
Fundible offers loan options that are suitable for business owners with bad credit. If you have a personal credit score of less than 500, Fungible offers equipment financing, invoice financing, lines of credit, and bridge loans. Although the starting rates are low, you can slowly increase your credit line to $100k.
Minimum Requirements:
- Credit Score >450
- 6+ months in business
- >$96,000 annual revenue
SMB Compass
Another smart option for $100k business loans is SMB Compass, a funding option mostly focused on providing low-interest loans to businesses with good credit. Owners can apply for loans upwards of $5 million with terms that last as long as 25 years for a fair repayment plan with low interest rates.
Minimum Requirements:
- 6+ months in business
- >$100k annual revenue
- Credit Score >600
Qualify For Business Loans Of $100k With Our Advice
Even though asking for $100,000 can seem like too much for a new business, sometimes it is needed to break into the industry, make one-time purchases, or stay afloat. Starting a new business or running a midsize company can be hard work, with consistent payments like payroll, inventory, new equipment purchases, and repaying debts.
Applying for and receiving a $100k business loan can be exactly what you need to continue running your business as usual. With Business Loans, we provide multiple loan options and help you decide which suits your unique business needs.
