Business loans
Business loans
A business loan gives you the whole amount at once and you repay it on a set schedule. It suits a known cost with a known purpose — a purchase, a build-out, buying out a partner. If what you need instead is money you can dip into and repay again, a line of credit is the better shape.
Step 1 of 5
Fund my business
About your business
Just enough to point your file at the right desk.
How a business loan works
You borrow a fixed amount, receive it in one payment, and repay it over an agreed period. The payment is predictable, which is the whole appeal: you can put it in a budget on the day you sign and it does not move.
What varies enormously is who lends it and on what basis. A bank or SBA lender looks hard at years in business, tax returns and profitability, and takes longer. A revenue-based or working-capital lender looks mainly at what goes through the bank account and moves quickly, in exchange for a shorter term. Neither is the right answer in the abstract; it depends on your numbers and how fast you need it.
Almost all of these carry a personal guarantee. You are promising to repay whatever the business does, which is worth understanding before you sign rather than after.
What lenders look at
Revenue and deposits
Consistent money moving through the business bank account. On most business loans this is the first thing read.
Time in business
How long you have been trading. Nearly every lender publishes a minimum, and newer businesses go to a different set of lenders.
Profitability
Bank and SBA lenders want to see the business making money. Revenue-based lenders weigh the deposits more heavily.
Credit
Personal and business both. It usually moves the price and the size more often than it decides a yes or no outright.
Existing debt
Other loans and advances already open. Stacked positions narrow your options sharply.
What the money is for
A specific use — equipment, inventory, a contract — often opens a better-priced product than general working capital.
Industry
Some industries are restricted at some lenders regardless of how the numbers look.
Collateral, sometimes
Many business loans are unsecured beyond a general lien and your guarantee. Larger ones often are not.
Questions we get asked
How much can I borrow?
It depends on revenue, time in business, existing debt and the lender. We will not guess a number before seeing the file — anyone who does is selling, not underwriting.
How long does it take?
Working-capital lenders are fast; bank and SBA loans are not. The honest answer depends on which lender fits, and we will tell you which one you are looking at once we see the numbers.
Do I need collateral?
Many business loans are unsecured beyond a general lien on business assets and your personal guarantee. Larger amounts and bank loans more often want specific collateral.
Will this affect my personal credit?
Telling us about your business does not. If you proceed, some lenders check personal credit, and we will tell you before that happens.
What if the business is new?
There are lenders for newer businesses, and the terms reflect the risk. Equipment financing and SBA options are sometimes a better route than a general business loan.
I already have a merchant cash advance. Can I get more?
Sometimes, but open positions narrow the field sharply, and stacking is how businesses get into trouble. If restructuring is the better answer we would rather say so.
Is a loan or a line of credit better?
A loan for a known cost you pay once; a line for a need that comes and goes. If you are unsure, the shape of the expense usually answers it.
Who this page is for
- Owners with a specific, known cost to cover.
- Businesses buying out a partner or acquiring another business.
- Owners funding a build-out, a relocation or a second location.
- Established businesses consolidating more expensive debt.
- Anyone weighing a loan against a line of credit.
What people use them for
- Buying equipment or inventory outright.
- A build-out, renovation or move.
- Acquiring another business, or a partner's share.
- Bridging a large contract before it pays.
- Consolidating costlier short-term debt.
- Hiring and payroll ahead of known growth.
The words you will hear, in plain English
- Term loan
- A fixed amount repaid over a fixed period. The plainest form of business borrowing and what this page is about.
- Personal guarantee
- Your personal promise to repay if the business cannot. Standard on most business lending, and required on SBA loans.
- UCC filing
- A public notice that a lender has a claim on business assets. Existing filings show up when the next lender looks.
- Blanket lien
- Security over business assets generally rather than one named item. Common on unsecured-sounding business loans.
- Time in business
- How long the entity has been trading, usually counted from formation. It is a hard cutoff at many lenders rather than a preference.
- Stacking
- Taking a second or third advance while the first is open. It is expensive, it narrows your future options, and lenders can see it.
- Revenue-based financing
- Repayment tied to a share of sales rather than a flat monthly payment. Faster to obtain and usually shorter and costlier.
- Debt service
- What your loan payments cost you over a period. Lenders test whether your earnings cover it with room to spare.
How these are usually put together
Illustrative structures, to show how these loans are assembled and what a lender weighs. Not offers, not quotes, and not terms available to anyone in particular — products, eligibility and figures vary by lender and by business.
A known cost, a fixed loan
A restaurant funding a build-out at a second site. The cost is quoted, the amount is known, and a term loan with a fixed payment sits neatly in the budget.
Buying out a partner
One owner buying another's share. Lenders look at whether the business supports the debt without the departing partner, so the case is made on the accounts.
Equipment, financed against the equipment
Where the money is for a machine or a vehicle, equipment financing usually beats a general business loan, because the asset itself secures it.
Consolidating short-term debt
A business carrying two advances at once. A longer-term loan that clears them can lower the weekly drain — when the file supports it, which is the part to test honestly.
What to prepare
Most business lenders start with the bank statements. Having them ready is the difference between a week and a month.
- Recent business bank statements
- A completed application
- Government-issued ID for each owner
- Entity papers: articles, operating agreement, EIN letter
- Business financial statements, where the lender asks
- A list of existing business debt and advances
- What the money is for, in one plain paragraph
- Voided business cheque for funding
From application to funding
- 1
Tell us about the business
What it does, roughly what it turns over, how long it has been going, and what the money is for.
- 2
We work out which desk
Bank, SBA, revenue-based or equipment — the answer changes the timeline and the documents, so it is decided first.
- 3
Documents
Bank statements first. Everything else follows from which lender we are approaching.
- 4
Underwriting
The lender reviews revenue, time in business, credit and existing debt, and comes back with questions.
- 5
Offer and review
Terms come back in writing. We go through the payment, the term and the total cost with you before you decide.
- 6
Funding
Signing, then funds to the business account.
What goes wrong
Borrowing the wrong shape
A line of credit dressed up as a loan, or the reverse. Match the borrowing to the expense — one-off or recurring.
Stacking advances
A second and third position on top of the first. It gets expensive fast and closes doors with better lenders.
Only asking what the payment is
Ask the total cost and the term as well. A small payment over a long period is not automatically cheaper.
Messy bank statements
Overdrafts, negative days and transfers in and out are read closely. Three clean months change what is available.
Not knowing your own numbers
Monthly revenue and existing debt should be answerable without looking. A lender reads hesitation as risk.
Shopping with everyone at once
Multiple applications leave a trail. We take your file to the lenders that fit, rather than to all of them.
Related financing
- Business line of credit →When the need comes and goes rather than arriving once.
- SBA financing →Longer terms and more paperwork, through an SBA lender.
- Equipment financing →Where the money is for a machine, the machine usually secures it.
- All business funding →Start from the question rather than the product.
Tell us about the business
Revenue, time in business and what the money is for. That is the core of it.
Step 1 of 5
Fund my business
About your business
Just enough to point your file at the right desk.
This is not an offer and not an approval. Terms are set by a lender, in writing, after underwriting, and vary by lender, by property and by file.
See your business loan options
Tell us what the business does and what the money is for. We will point you at the right desk rather than the fastest one.