It only takes a few moments for financial difficulties to cause major problems for a business. Issues like these are some of the most common reasons why approximately 20% of small businesses fail within the first few years.
The good news is there’s no shortage of financing options available, and one of the most common is stated-income business loans. Before moving forward, though, there’s certain information you’ll need to understand to navigate this process efficiently. Let’s explore the key details you should keep in mind.
Loan Qualifications
Your terms will vary substantially depending on the lender you work with. More often than not, you’ll need to be in business for at least six months.
The longer your company runs without issues, the easier it will be to obtain approval. Your credit score will also play a significant role. While you’ll need around 500 to get approved, in many cases, you’ll have an easier time finding a lender to work with if you have a score above 700.
The more revenue you make, the less of a liability lenders will perceive you as. Many loan providers will require you to make at least $200,000 in annual revenue. The type of company you run and the industry you’re in typically don’t affect your chances of getting approved.
Typical Loan Terms
Your interest rate will vary depending on your overall level of risk. A company with low revenue that’s only been in business for eight months will have a higher loan interest rate than a company that’s been around for five years and has an annual revenue of $1 million.
Your payment plan for your loan term will generally be monthly, but it could also be weekly or bi-weekly. Processing time is typically under 48 hours, allowing you to get the money you need relatively quickly. Loan documents typically include your bank account and business bank account verification.
Finding a Lender
It’s essential to find the right lender before moving forward. Otherwise, you could potentially be stuck dealing with unfavorable loan terms. Check their online reputation and see what other people have to say about working with them.
Did they encounter issues their lender couldn’t help them overcome? Were they easy to get in touch with? The answers to questions like these will help you narrow down your potential options.
Do they integrate miscellaneous fees? The last thing you want is to encounter financial surprises.
Ask about their customer support policy, as well. It can be difficult and frustrating to handle issues that arise on your own.
Leverage Stated-Income Business Loans
When utilized appropriately, stated-income business loans are some of the best financing options you can take advantage of. The tips in this guide will help ensure you avoid common pitfalls and make the most of the opportunities you encounter.
Private Capital Lenders prides itself on offering premier financial solutions to business owners. Our team of specialized agents is ready to guide you through the process. You’ll learn more about the many benefits we can provide when you get in touch with us today.
