- Many small business owners seek out small business loans ranging from $10,000 to $1 million when they need help with business expenses like real estate, utilities, equipment. , inventory, payroll, marketing or other operational expenses.
- A $75,000 business loan could be the perfect solution for small business owners looking to start or expand their small business.
- The best way to get good loan rates is to get good credit, no matter what loan amount you’re looking for.
- Applying for and qualifying for a small business loan can be tricky, but Nav has tips to help you find the right $75,000 business loan for your business.
Loan requirements for a $75,000 business loan
Depending on your perspective, $75,000 may or may not be a lot of money. For a small business borrower, this amount may seem like a life-saving number, while a large bank may consider it small potatoes. But your eligibility for any loan amount usually requires a few standard qualifications, regardless of the size of the amount of money you need.
This is because any lender needs to determine how risky it is to lend to you and how likely you are to repay them. Someone asking to borrow $250 is likely to be less risky to lend than someone asking for $25,000 and even less risky than someone looking for $2.5 million. But there are other factors that determine your level of risk to the lender.
Your business loan application will likely include questions about:
- Credit ratings — your professional and personal credit scores will be taken into account. The better the scores, the more likely you are to qualify and the more likely you are to get a better interest rate. That doesn’t mean you can’t get financing for $75,000 if you have bad credit, but it’s a good idea to know your scores at the bare minimum in order to be prepared. You can check your credit scores and view loan options with Nav by signing up here.
- years of activity – one of the biggest risk factors for a lender is that you will go bankrupt before you can repay it, so knowing how long you have been in business can factor into their decision to lend you as an indicator of your staying power . Your personal resume can also have some influence in this regard, if you can prove that you know the ins and outs of the company you work for.
- Cash flow – your business revenue, outgoing payments and existing debt are more historical things that indicate the likelihood that you will be able to repay the loan, so lenders consider cash flow and other financial records when lending examination of your request.
- Personal and financial records – any lender will want to see a handful of important documents, including tax returns, financial statements, identification, company incorporation documents, your business plan, and more.
- Collateral — depending on the type of loan you want for your specific business needs, you may need collateral to ensure the lender will give you the money. It can be one of many business assets, but it can include the equipment you use, your vehicle or vehicles, or even your business itself. Unsecured business loans don’t require collateral, but they may require a personal guarantee and cost more upfront.
What are typical repayment options for a $75,000 business loan?
As with any loan, a small business loan will include a loan repayment plan. Your scheduled monthly payments can vary significantly, depending on the interest rate you get and the repayment terms. Many term loans will have a 60 month repayment plan. A low-interest loan of 6% with repayment terms of five years (or 60 months) would cost around $1,500 per month. However, a one-year short-term loan will have a much higher price in terms of interest and you risk being penalized with prepayment penalties if you pay it off too quickly.
Small Business Administration (SBA) loans tend to have better terms and interest rates, but can be more difficult to obtain and tend to have a long application process. Online lenders or alternative lenders may have more flexible application qualifications and processes, but they may also have much higher interest rates. Many loans may also include an origination fee in order to process the application, and some may charge a monthly service fee, so it’s important to read the fine print.
You may also find that a business line of credit is a better option for you than a small business loan. With a business line of credit, you only borrow the amount of money you need and pay interest on that amount, and you usually get the credit back once you pay it back. Again, read the fine print – some of them can have Annual Percentage Rates (APR) of almost 80%.
Who are the best lenders for $75,000 loans for startups?
Finding a loan to start a business can seem a bit tricky. Startups have unique needs when it comes to small business funding, particularly because they typically don’t have much (or any) business history to show their monthly revenue and years in business.
Alternative lenders and short-term lenders are often more willing to lend to “riskier” businesses like startups. They also tend to fund faster, sometimes as quickly as a business day, and have shorter, less rigorous application processes. But their money can come at a cost – like a higher interest rate and a longer loan term – usually a year.
If you think your startup can pay the money back quickly, there are several short-term loan options for startups that need a $75,000 loan, including:
A merchant cash advance (MCA) or business cash advance is another type of financing that startups and entrepreneurs are increasingly considering. With an MCA, you agree to repay the money you receive from the lender through your credit card sales by making a daily payment. Obviously, this is not a good option if you are not doing credit card sales and expecting a large amount of sales quickly. But it can be a way around the usual difficulty getting a loan that startups can face.
You can also consider taking out a personal loan for your startup, although you may not be able to get as much financing as with a business loan.
Who are the best lenders for $75,000 loans for established businesses?
As an established business, you may have more funding options than a startup, especially if you have several years in business and a stable monthly income. You’ll also likely have established business credit and a better financial history, giving you a better chance of qualifying for $75,000 from a traditional lender like a bank or credit union. An SBA loan will be easier for you to obtain than for a startup or other small business.
Here are some options you might consider:
How to Calculate Payments on a $75,000 Business Loan
With a $75,000 small business loan, you will get the money in your bank account as a flat rate to spend however you want. But how can you predict how much you will have to repay?
Obviously, you will need to know the total amount of your loan plus the length of the term, or how long you have to pay it back. $75,000 split between 60 months and 12 months is a very different sum. Additionally, you must include the interest rate, origination fees, and any monthly fees the loan may require.
Fortunately, you can find a business loan calculator online that can help you calculate the monthly payment, including a term loan calculator created by Nav.
How to Build Credit for a $75,000 Business Loan
Your credit history is the best way to show your creditworthiness to a lender. If you want better terms for your $75,000 business loan, the best thing you can do is establish and grow your business credit, as this is the primary indicator that lenders, traditional and non-traditional, look to determine. your level of risk. You can learn how to build business credit and how to improve it over time to help you qualify for the loan.
In the meantime, you can also consider business credit cards as a way to get the cash you need and boost your business credit. These tend to be much easier to get, and you can earn rewards and perks by using your credit card to pay for day-to-day business expenses.
Nav can help you find the best $75,000 loan deals you’re most likely to qualify for based on your business credit score and other factors. Register for a free Nav account today to see your options.
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