Small Business Express Loan
Is a business loan right for you?
Like a mortgage or personal loan, a small business express loan comes with a fixed interest rate and monthly payment. Business loans are so common that you’re probably familiar with how it works, but nevertheless, it makes sense to go over the uses and how to qualify. 
First, it’s important to understand that a business loan is a traditional source of funding and requires extensive documentation. With a Small Business Express Loan the rates start as low as 6% with terms ranging from 1-10 years.
Remember, a key factor in getting the lowest rate with this type of funding program is the amount of time that you need to obtain the loan. If your timeline allows for 45 days or more the better compared to a deadline of just three weeks.
Unlike a business line of credit, a business loan will provide you a large sum of cash upfront. Once the funds are used and your company needs additional funding then you’ll need to apply for another loan.
By the way, be sure to check out my recent post titled ‘Business Loan vs Line of Credit’ where we outline the key differences between the two.
In today’s post we’ll explore the Small Business Express Loan, various ways it can be used, and what you’ll need when you submit an application for funding. First things first, here are the top 10 major uses for a business loan.
- Starting a New Business
- Open a New Franchise
- Grow an Existing Business/Franchise
- Buy an Existing Business/Franchise
- Working Capital
- Marketing
- Construction/Expansion
- Purchase Equipment
- Prep for Seasonal Growth/Slow Down
- Purchase Real Estate Property
About the Business Express Loan
- Terms: 1-10 years (terms and rates vary)
- Rates start at 6.0%
- No personal collateral
- See if you qualify in 48 hrs at no cost
Banks generally won’t issue loans to finance a new business without collateral, profits or long-term success to back it up. So be prepared to have 10% cash on hand because without “skin in the game,” a lender is not likely to approve you for a business loan.
It’s important to remember that going the traditional loan route is much more document intensive compared to non-traditional funding programs like our UBF program or Revenue Based Loan. Where the UBF program strictly relies on the strength of your personal credit, a business express loan looks at many more factors such as tax returns, bank statements, P&L statement, etc.
How to Pre-Qualify for a Small Business Express Loan
Personal Credit
For both startups and existing businesses you’ll need personal credit scores at least in the 650+ range. Here are five areas that our in-house underwriters are looking at…
1) Credit score in the 650+ range and higher – but scores are just a benchmark not the most important factor.
2) You need to show depth and history on the credit report – this means open credit cards.
3) No recent derogatory items – absolutely no bankruptcies or foreclosures
4) Credit card utilization ratios – Ideally credit card debt needs to be under 40% and we will give specific pay downs to meet that criteria if you have too high of a utilization ratio.
5) They look at inquiries. Shopping around for credit is a deal killer so avoid excessive inquiries at all costs.
Verifiable Funds of 10% (Only for Startups or Business Purchases)
Now if you’re aiming to purchase a business or franchise then you’ll need to supply three years of personal tax returns, a copy of a recent credit report, and verifiable funds of 10% of the target loan amount you need. For example, if it takes $100,000 to purchase the franchise you want then you’ll need to show that you have at least $10k of cash on hand.
The fact is when it comes to startups, lenders want to see that the business owner has the cash available to inject into the business if needed. You probably heard the expression, “you better have skin in the game.” Don’t worry, this doesn’t mean you have to use the funds; it’s just what banks like to see.
On the other hand, if you’re an existing business looking for a business loan then you’ll need to supply two years of business and personal tax returns, a copy of a recent credit report, up-to-date profit & loss statement, six months of bank statements and four months of merchant account statements (if applicable).
Checklist for Pre-Qualifying for a Small Business Express Loan
Startups & Business Purchases
- Complete a BEL application
- Copy of a recent personal credit report (no older than 3 weeks)
- 3 years of personal tax returns
*Verifiable funds of 10% of the target loan amount needed
Submit to [email protected] for review
Existing Businesses
- Complete a BEL application
- Copy of recent personal credit report (no older than 3 weeks)
- Current profit & loss statement
- 2 years of personal tax returns
- 2 years of business tax returns
- 6 months of bank statements
- 4 months of merchant account statements (if applicable)
Submit to [email protected] for review
Ready to start building your business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($497 value) =>
To Your Success In Business and in Life!
Did This Blog Help You? If so, I would greatly appreciate if you like and shared this on Facebook and Twitter.
About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, Business.com, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.
