Small Business Loan Options at InterconnecT Financial Group
Locate the business loan solutions that best suit your financial needs today.
ACCOUNTS RECEIVABLE FINANCING
Gain quick access to cash by selling your purchase orders or receivables so you can get back to business as usual.
Loan Amount
Tied to receivables
Speed of Funds
As soon as 24hrs
Interest Rate
as low as 3%
Business Line of Credit
Get a revolving amount of funds to borrow from when you need to and pay back later.
Loan Amount
$1k-500K
Speed of Funds
1-2 days
Interest Rate
8%-60%
SBA Loan
Cover just about every aspect of your small business. Some of the most common SBA loans are the 7(a), 504, and SBA Express.
Loan Amount
up to $5M
Speed of Funds
1-3 months
Interest Rate
Prime+
Short Term Loan
Use it to cover unexpected costs, survive a slump, finance a short-term project, or even capitalize on a new business opportunity.
Loan Amount
$2.5k-500K
Speed of Funds
As soon as 24hrs
Interest Rate
As Low as 8%
Business Term Loan
A term loan provides a lump sum that gets repaid in regular intervals over a set amount of time, also known as the loan term.
Loan Amount
$5k-2M
Speed of Funds
As soon as 24hrs
Interest Rate
As Low as 6%
Business Cash Advance
A cash advance is a form of funding that offers businesses quick access to funds by borrowing against the money they will make. That borrowed money is then repaid through a fixed daily percentage.
Loan Amount
$5k-1M
Speed of Funds
As soon as 24hrs
Interest Rate
As Low as 18%
Equipment Financing
Use this loan to purchase any kind of equipment your business needs. There are financing options for nearly every industry and any variety of items you need.
Loan Amount
$5k-5M
Speed of Funds
As soon as 24hrs
Interest Rate
As Low as 7.5%
Commercial Mortgage
Use it to buy, build, expand, remodel, or even refinance your business.
Loan Amount
$5k-5M+
Speed of Funds
1-3 months
Interest Rate
As Low as 4.5%
Startup Loan
Invest in your own business. Instead of giving up equity to investors, a startup loan maintains your equity while accessing the working capital your startup needs to grow.
Loan Amount
Up to $150k
Speed of Funds
2-4 weeks
Interest Rate
Up to 31%
Business Acquisition Loan
Purchase an existing business or franchise, and take advantage of business opportunities even if you don’t have the capital to purchase it outright.
Loan Amount
$5k-5M
Speed of Funds
As soon as 30 days
Interest Rate
As Low as 5.5%
Business Credit Card
A business credit card helps you track expenses, build a strong business credit history, and increase your working capital so you can reap the literal rewards.
Loan Amount
Up to $150K
Speed of Funds
2-4 weeks
Interest Rate
Up to 31%
Benefits of a Lending Marketplace
You would never purchase insurance by visiting one company’s website and saying, “I guess this must be the going rate for insurance.” Comparing options is a vital part of the process and ensures that you can find a flight that matches the price you want to pay and your scheduling needs.
A lending marketplace works the same way… but for business loans. The idea that you should have to pick a single lender and roll the dice on the terms you qualify for is, quite frankly, a little outdated. And it doesn’t usually work in the borrower’s favor. With a lending marketplace, you can compare multiple loan offers to ensure you’re choosing the right loan option for your needs. Through a lending marketplace, you can compare the interest rates, loan terms, loan size, and speed of capital of different offers to ensure you feel confident when you apply for a specific loan.
When you have multiple financing options, it can open up new ways to attack a specific problem. If you’re looking for financing to cover a large inventory order, for example, you may want a short term loan that gives you the capital fast so you can quickly repay the loan and move onto the next opportunity. Or you may find that opening a line of credit will allow you to make repeated inventory purchases.
Being able to compare financing opportunities gives you the flexibility to tackle your business challenges in different ways so you can find the strategic path with the highest payoff.
With a loan marketplace, you apply via a single application to compare multiple offers. That’s a heck of a lot better than the typical 25-hour bank application that only gives you a shot at… one loan option.
What’s more, loan marketplaces typically prioritize your time and make that application short and sweet. We can only speak for ourselves here, but we’ve edited the process down to a single 15-minute application that can unlock offers from 75+ lenders. If you average that out, it means you spend about 12 seconds/lender on the application.
When you apply through Lendio, we pair you with a team of experts to guide your application through the process. These experts can answer your questions, help you understand the pros and cons of different loan types, and be there to guide you through each step— from putting your documents together to submitting them for underwriting.
For some business owners, their first question is, “How fast can I get a loan?” For others, it’s, “How big of a loan can I get?” The beauty of a lending marketplace is that you can choose the option that best fits what matters to you. Need financing in 24 hours? Yup, there’s an option for that. Don’t mind waiting if it means you can secure a lower interest rate? We have an option for you, too.
A lending marketplace puts you in the driver’s seat for your financing experience. Ready for an experience that’s tailored just to you?
Starting a business brings with it a host of new decisions. Should you structure it as a sole proprietorship, partnership, corporation, S corporation, or a Limited Liability Company (LLC)? Will you operate exclusively online, or would it be better to also have a brick-and-mortar location?
If you use debt financing as a way to fund your business, you’ll also need to consider what type of loan to pursue. There are diverse options, including business lines of credit, short term loans, business term loans, equipment financing, business acquisition loans, SBA loans, and startup loans.
Secured Vs Unsecured Business Loans
Business loans can be secured or unsecured. A secured loan is backed by collateral like property, equipment, or other business assets of value. An unsecured loan is based on creditworthiness alone and leaves a lender unprotected if the loan is not repaid.
Secured business loans typically have lower interest rates than unsecured loans because if the borrower defaults on the loan, the lender can seize property to recoup the loss. Unsecured loans have higher rates because a lender has no recourse in the event of non-repayment.
Entrepreneurs have more skin in the game with a secured business loan, meaning they offer up a personal asset to cover the cost of the loan if they’re unable to make their payments. Common examples of collateral include homes, cars, stocks, bonds, real estate, inventory, or equipment.
The value of the collateral needs to match at least the value of the loan. In some cases, lenders will ask for the collateral to exceed the loan amount because some forms of collateral, such as real estate, take substantial time and effort to convert into cash.
For example, if you used a 5-acre lot as collateral and then defaulted on the loan, the lender wouldn’t simply keep the property as a memento. They’d try to sell the lot, which would require them to jump through various hoops. Upon the sale of the property, the lender would take enough money to cover the amount you owe and then give you the remainder.
It’s important to obtain an accurate estimate for the asset’s value before talking with your lender. They will be inclined to undervalue it because they prefer to liquidate assets in a hurry, which is done at lower-than-usual prices. If you’re prepared with a recent estimate, you’ll be better able to negotiate with them.
As you might expect, lenders are more generous when their risk is lowered. For starters, the qualification standards for a secured loan are more lenient than with an unsecured loan. So if your business is new or you have less-than-stellar credit, this option is your best bet.
Secured loans have higher dollar amounts than unsecured loans, making them ideal for larger projects and initiatives, such as buying equipment or financing purchase orders. The repayment terms and interest rates can also be more favorable to borrowers, meaning you’ll have more time to repay the loan. And the lower monthly payments will help to increase your cash on hand for inventory, staffing, and other expenses related to running your business.
What is a secured business loan’s main drawback? The fact that you’re personally liable for the money you’ve borrowed. If something were to go wrong, your collateral would belong to the lender. For this reason, it’s essential that you only seek loans you can confidently repay—and only offer up collateral that you could tolerate losing if things were to go south.
No collateral is involved with an unsecured business loan, meaning the lender faces higher risk. Because of this scenario, the lender will go over your credit score with a fine-tooth comb. They’ll also pay close attention to the financial history of your company, meaning new businesses seldom qualify. If you don’t have a robust credit history, balance sheets, cash flow, and cash reserves, lenders simply won’t have enough data to make an educated decision.
For businesses with a track record of 2 or more years and annual earnings that reach at least 6 figures, an unsecured business loan can be an excellent choice. Because no collateral is required, you won’t need to put your personal assets on the chopping block. The absence of collateral also simplifies and accelerates the application process, as there won’t be analysis and dialogue involving the collateral to be used.
Unsecured loans are riskier for lenders, so approvals are less likely. If you need a cash injection quickly, the last thing you want is to waste time on an unsuccessful application. If you don’t have trading records and a good credit rating, don’t apply for this type of financing.
The dollar amounts for unsecured loans usually max out at $50,000, so this type of financing is best suited for smaller expenses. As you forecast your finances, remember that you’ll also need to account for the higher interest rates and shorter repayment terms typical of unsecured loans.
If you meet the lender’s qualifications and have financing needs in the range of what an unsecured business loan provides, this avenue can be a solid option. It’s a streamlined way to obtain low-risk money for your business.
The bottom line is that you have numerous choices when it comes to obtaining a loan for your business. There’s no silver bullet that’s best for all situations, so it’s crucial for you to consider every angle carefully before you begin submitting applications.
In most cases, the strength of your finances and the amount of money you need to borrow will dictate whether you go with a secured or unsecured business loan. From there, you’ll just need to decide which lender and loan product best match your needs.
Start preparing now so you’ll be ready to roll when you find the right loan. Get your business plan dialed in, ensure your credit score is accurate, and assemble the required documents. Any effort you put into getting yourself ready can potentially save you hours of work when it comes time to click submit on your chosen application. Plus, your preparations will foster confidence, which is one of the most crucial elements of any successful loan application.
If you’re thinking about expanding your business, you’re probably considering financing. In this case, you also need to consider collateral to secure these loans. Banks and other lenders decide on interest rates, loan amounts, and other terms based on the amount and type of collateral you have to offer them.
What is Collateral?
Collateral is an asset, such as cash or real estate, that a loan applicant offers to secure a loan as a guarantee that the loan will be repaid. The applicant agrees that the lender can claim ownership of the collateral if the applicant defaults on the loan.
The lender gains ownership of your collateral if you default on payment, whether you pledge your car, house, or equipment. Since it gives the lender peace of mind, collateral can allow people with less-than-stellar credit to qualify for a small business loan.
Lenders want to lend money to people who have skin in the game for pretty obvious reasons—they want some way to get their money back in case you stop repaying your loan. Commonly, banks want small business loans to be fully collateralized, meaning you need to offer enough collateral to cover 100% of the proposed loan amount.
Different types of lenders accept various forms of collateral, so there are several routes you can take. It’s important to remember that there’s always a risk that you’ll lose the collateral if you default on your loan.
Collateral in the form of cash, as a deposit or in savings, will always be the gold standard for banks. It’s low risk for banks because it’s very easy to get their money back in case you default. While you’ll get the most favorable terms if you offer cash as collateral, you might want to shield your money from banks. Although it’s important to note that, as long as it’s being used as collateral, you also won’t be able to touch the cash.
Real estate and home equity are the most commonly offered collateral for small businesses because a house is typically the most valuable asset an individual possesses. However, most banks will only take a small fraction of equity accrued on a house as collateral because they follow stringent debt-to-income ratios.
Along with homes, cars are common options for collateral. It’s best if you own your vehicle or if the total amount you owe on your car note is significantly less than its Kelley Blue Book value. Often, credit unions will offer loans for close to 100% of the value of your car. However, before offering your car as collateral, you should check with your lender to ensure that the terms of the small business loan you’re seeking will allow this.
Like residential real estate, you can use commercial property as collateral. If you plan to buy commercial property with a loan, you can actually use the property in question as collateral. However, banks tend to lend less against commercial property since it is considered a less secure investment than residential property. Banks usually lend up to 50% of the value of commercial property. The same sort of financing is also available for expensive equipment.
You can leverage your 401(k) as collateral, but you might get hit with a large tax bill. Many 401(k) plans allow you to take a loan out at prime interest plus one to two points. Other investments can be used as collateral, but you will typically get worse rates than if you had offered cash.
Another way you can use your 401(k) to finance a business is to execute a Rollover as Business Startups (ROBS). It’s an arrangement that lets you access your funds without incurring taxes, penalties, or interest charges, even if you have bad credit.
A ROBS involves forming a C corporation and starting a retirement plan for the business entity, then rolling over the funds from your old 401(k) into the new account. That allows you to purchase stock in your own company with the rolled-over funds and use the proceeds from the sale to fund your business.
While it can be effective, a ROBS is a highly complex and risky strategy that can cost you your business and retirement funds. It should generally be a last resort, and you should always consult a tax professional before attempting one.
Some lenders have options called asset-based loans that accept a small business’ inventory and accounts receivable as collateral. These loans will typically be smaller than when other assets are offered as collateral because it’s difficult for banks to determine the value of your inventory or accounts receivable. However, these can be good options if you don’t have a lot of valuable assets like real estate.
As a small business, you can apply for merchant cash advances, where you trade a portion of your daily credit card sales for a lump sum loan. There is no personal guarantee with this type of payment: it applies to your company only, and it will not affect your personal credit score if, for some reason, you cannot repay the loan. While merchant cash advances are flexible, the interest rates are often high.
Before applying for any loans, think hard about the size of the loan your business requires and what you’re willing to put up as collateral. Traditional banks want their loans to be fully collateralized, but other lenders might be less strict. In those cases, though, the interest rates will usually be higher, and the loan amounts will be smaller.
Don’t be afraid to negotiate with a lender based on alternative lending options, your credit history, and the value of your assets.
Because collateral loans allow the lender to seize the underlying asset if you default, the arrangement is more appealing to them. As a result, they’re one of the easiest ways for small business owners to qualify for financing despite having limited or bad credit. Meanwhile, qualified borrowers may find that collateral loans offer more favorable terms than they’d receive otherwise, such as lower interest rates and higher loan amounts.
However, collateral loans also have notable drawbacks. The most obvious is that you must own something of significant value to access them. The other is that they’re riskier than unsecured loans. Not only would defaulting damage your credit and likely sink your business, but you would also have to give up whatever asset you pledge.
If you’re like many Americans without valuable assets, there are still lending options. You’ll want to seek out unsecured loans, which are lending products that don’t require collateral. Credit cards are the most common unsecured alternative to loans. Because the lender takes on more risk, the terms are generally far less favorable than a term loan from a bank, but you also don’t have to stake any of your assets.
FAQs About InterconnecT
The actual pace and method of your payments will depend on the lender and loan type you choose, as well as factors such as your business history. Typically, the stronger your business and credit, the less frequently you’ll have to make loan payments and the more payment processing options you’ll have.
InterconnecT makes it easier to get approved for a small business loan. You won’t need nearly as much paperwork to apply. Our online application connects you with more than 75 lenders. The application process is totally free—you only pay when your loan gets funded. Once your application is complete, one of our funding managers will contact you to discuss the best loan option for you.
APR is a common abbreviation for annual percentage rate, which is the amount of interest accrued on debt held for one year. In other words, your APR is the annual cost of your loan. For example, if you owed $10,000 and your APR were 10%, by the end of the year you would owe $11,000 (assuming you’d made no other payments during that time period).