If your business is poised to grow and you can handle the extra debt payments, a small business loan could be a good way to fund your business expansion — but you’ll need a solid expansion strategy to ensure everything goes according to plan.
Up to $5,000,000
10.50% to 14.00%
14% for loans $50,000 or less
13.5% for loans $50,001 to $250,000
12% for loans $250,001 to $350,000
10.5% for loans above $350,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.
12.50% to 15.50%
15.5% for loans $25,000 or less
14.5% for loans $25,001 to $50,000
13.5% for loans $50,001 to $250,000
12.5% for loans above $250,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.
Up to 300 months
Whether you need to stock up on inventory, hire additional employees or purchase commercial real estate, Live Oak Bank is a good option, offering multiple types of SBA loans, including SBA 7(a), SBA 504 and SBA Express loans. SBA 7(a) loans, the most popular option, offer loan amounts up to $5,000,000 with repayment terms lasting as long as 300 months, depending on how the funds are being used.
As an SBA Preferred Lender, Live Oak Bank can process and fund loans in as little as two weeks — significantly faster than non-preferred lenders, which may take two months or longer. Still, even with a preferred lender, SBA loans are slower to fund than other loan types, so this option isn’t ideal for borrowers with time sensitive needs.
Live Oak Bank doesn’t disclose the minimum credit score, time in business or annual revenue you’ll need to qualify. Contact the lender directly to find out if your business qualifies for a loan.
$500 to $5,000,000
7.99%
12 to 84 months
If taking your business to the next level means purchasing or upgrading equipment, you might want to consider getting an equipment loan from Taycor Financial. While some lenders may require a down payment for equipment financing, Taycor Financial does not, which can help keep your upfront costs low.
The lender also offers flexible payment options, including monthly, quarterly and seasonal payment plans, plus the option to delay your payments for up to 90 days. However, a personal guarantee may be required to secure the loan.
In order to qualify, you’ll need to meet Taycor Financial’s criteria of:
$5,000 to $1,500,000
13.00% Fora Financial’s minimum rate is a 1.13 factor rate. This means you’d repay 13.00%, plus any additional fees, on top of the amount borrowed.
4 to 18 months
If a poor credit score is preventing you from accessing financing elsewhere, you might be happy to learn that Fora Financial offers multiple loan programs for borrowers with scores as low as 570. Term loans offer up to $1,500,000 in working capital, with the opportunity to borrow more after 60% of the original loan is paid off.
However, you’ll need to generate at least $240,000 in annual revenue to qualify. It’s also important to note that Fora Financial’s repayment terms are relatively short, requiring you to repay your debt in 18 months or less, so you’ll need to examine your budget closely to avoid borrowing more than you can afford.
In order to qualify, you’ll need to meet Fora Financial’s criteria of:
$2,000 to $250,000
3.00%
3% to 9% for 6-month terms
6% to 18% for 12-month terms
9% to 27% for 18-month terms
12% to 18% for 24-month terms
Each draw counts as a separate installment loan. Single-repayment loans will have different rates and terms.
6 to 24 months
If you run a small business, you might struggle to generate enough revenue to qualify for a business expansion loan. But unlike other traditional lenders, American Express has lenient revenue requirements, allowing businesses that earn at least $36,000 in their first year to qualify for financing.
You’ll only pay interest on what you borrow, and with low starting rates you might be able to keep your borrowing costs low — especially if you have good or excellent credit. However, only customers with a pre-existing relationship with American Express can qualify for initial line sizes over $150,000, making this option best suited to expansions with a smaller budget.
In order to qualify, you’ll need to meet American Express’s criteria of:
$25,000 to $500,000
7.49%
6 to 60 months
If you need fast funding to take advantage of a limited-time business opportunity, iBusiness Funding may be able to deliver your funds in just a few business days without charging extra for the perk. Fast business loans are typically offered by online lenders, which are known for charging hefty interest rates. By comparison, iBusiness Funding’s rates are relatively affordable, and approved borrowers can expect to receive their funds within two to four business days.
Loan amounts go up to $500,000, which is lower than some of the other lenders on this list, but still a substantial amount of cash to put toward technology, machinery, inventory and other business expansion costs. However, some form of collateral may be required to secure the loan.
In order to qualify, you’ll need to meet iBusiness Funding’s criteria of:
A business expansion loan is a type of financing designed to help established businesses grow.
Business expansion loans can be used for a variety of purposes, including opening a new location, upgrading equipment, expanding product lines and hiring additional employees.
However the funds are used, what matters is that the loan allows businesses to grow beyond their current limitations.
| Pros | Cons |
|---|---|
Can provide capital to expedite your business growth without selling your equity Typically more affordable than startup business loans, especially for businesses with good credit and a solid stream of revenue | Debt payments can disrupt your cash flow and put a strain on your business budget May put your personal and business assets at risk, depending on how the loan is secured |
If your business is poised to grow and you can handle the extra debt payments, a small business loan could be a good way to fund your business expansion — but you’ll need a solid expansion strategy to ensure everything goes according to plan.
You’ll be in a stronger position to borrow funds for your business expansion if you have a proven track record of success. One of the ways lenders evaluate your business performance is based on your income, so some lenders may set a high bar where revenue is concerned.
However, other lenders may be more lenient with their revenue requirements, especially for borrowers with good credit scores.
If your application for a business expansion loan is denied, there may be a few steps you can take. Depending on the reason you were rejected, it might be possible to qualify for financing with a different lender.
However, if the only loan options available to you come with high interest rates and hefty fees, it might be best to focus on improving your credit and increasing your revenue so you can reapply for affordable financing at a later date. Otherwise, your business expansion could be jeopardized by expensive debt payments.