The 3 Types Of SBA Loans Business Owners Should Know About

Small businesses represent the American Dream. A successful small business doesn’t translate to success for just one person — small businesses fuel local economies and provide jobs. When small businesses have the chance to grow and thrive, everybody wins. And that’s why organizations like the Small Business Administration exist.

The Small Business Administration, or SBA, is a government agency that provides the tools and resources needed to help business owners succeed. From training sessions to educational materials, the SBA provides resources and serves as an advocate for small businesses. The SBA has also become known among entrepreneurs for one big piece of the small business puzzle: financing. Through its loan programs, the SBA provides affordable and flexible loan options for everything from expansions to new business acquisitions.

If you’re ready to take your small business to the next level and you need the capital to get there, you can’t go wrong obtaining funding through an SBA loan program. But where do you begin?

Let’s start by learning more about the different types of SBA loans. Once you have a good base of knowledge, you’ll be better able to select and apply for the program that’s right for you.

What Are SBA Loans?

The SBA doesn’t loan money directly to small businesses. Instead, the SBA works with intermediaries to provide low-interest loans with competitive terms to small businesses and startups. These intermediaries could be traditional banks, private lenders, credit unions, or even nonprofit organizations.

The SBA has created a set of standards upheld by its intermediaries to keep loans affordable for small businesses. This way, borrowers can expand and build their businesses without facing high interest rates, daily draws, or other drawbacks they might encounter with more expensive forms of credit. The SBA backs large percentages of the loans given through its programs — anywhere from 50-85% — lowering the risk involved and making lenders more apt to lend to small businesses.

The SBA offers several programs of interest for small business owners. Let’s explore the different types of SBA loans to determine which best fits the needs of your small business or startup.

The SBA 7(a) Loan Program

The SBA 7(a) program is the most well-known among SBA loans. SBA 7(a) loans are extremely popular because of the great terms and flexibility they provide. However, there are several different types to consider, each of which comes with different maximum loan amounts, interest rates, and terms. Read on to find out more about each type to determine which is the right fit.

Types Of 7(a) Loans

  • Standard 7(a) Loans: When most people refer to SBA 7(a) loans, this is the program that comes to mind. Through this program, small businesses can borrow up to $5 million. Interest rates are negotiable and maturity terms are typically 10 years or 25 years, depending on how the money is used. The SBA guarantees 75% to 85% of the total loan amount, putting less risk on lenders so they can feel confident in loaning money to small business owners.
  • SBA Express Loans: One of the drawbacks that many potential borrowers find with SBA Standard 7(a) loans is the length of the process from application to approval and funding. The entire process takes, at a minimum, 30 to 90 days. Borrowers who want a fast approval should consider SBA Express Loans. Within 36 hours, the applicant will know whether or not they’ve been approved. While actually receiving the money can still take weeks, it’s very reassuring to business owners to have an approval locked down so they can quit searching for loans and know that they’ve secured funding. The maximum loan amount is just $350,000 through this program, which could be a drawback for anyone seeking more financing. Because the SBA backs only 50% of each loan distributed through the Express program, these loans can be more difficult to obtain, especially for startup businesses.
  • Community Advantage Loans: These loans are very similar to the Standard 7(a) loans given by the SBA. The biggest difference is that the Community Advantage Loan program is reserved for borrowers in underserved communities. This doesn’t just mean small businesses in low-income areas, although those do qualify for this program. Community Advantage loans are also available to women, minorities, veterans, and startups. This program provides opportunities to businesses that may not qualify for traditional financing options. The maximum loan amount under this program is $250,000.
  • Veterans Advantage Loans: Veteran-owned small businesses can get the funding they need through the Veterans Advantage program. Through this program, veterans and service members get to enjoy the same great rates and benefits of the Standard 7(a) loans but with reduced fees. This program offers loans up to $5 million.
  • Export Express & Export Working Capital Loans: Exporters can get funding through the SBA’s Export Express and Export Working Capital programs. Through the Export Working Capital loan program, small businesses can receive up to $5 million in financing. Under the Export Express program, loans up to $500,000 are distributed. Though these loans are smaller, the benefit is that applications are approved within 24 hours.
  • SBA Lines of Credit (CAPLines): SBA CAPLines offer short-term and cyclical funding options for small businesses. Funding of up to $5 million is available with maximum repayment terms of 10 years. There are four different lines of credit available under this program. Seasonal CAPLines are used for accounts receivable and inventory that increase seasonally; Contract CAPLines are used to finance specific contracts; Builder’s CAPLines are used for the construction or renovation costs for commercial or residential buildings; Working CAPLines are a type of revolving line of credit used for recurring, cyclical, or short-term needs and is used by businesses that do not qualify for long-term credit programs.

SBA 7(a) Loan Uses

SBA 7(a) loans are so popular because there are very few limitations. With Standard Loans, Express Loans, Community Advantage Loans, and Veterans Advantage Loans, funds can be used for a variety of purposes, including the purchase of equipment, expansion, the acquisition of a business, or working capital. Export Express and Export Working Capital loans can also be used for just about any business purpose but are limited to usage only by companies that sell goods or services outside of the territorial United States.

As previously mentioned, SBA CAPLines do have limitations in how they are used. Builder’s CAPLines can only be used for direct expenses related to construction or “substantial renovation” to a residential or commercial building. Contract CAPLines can only be used for the costs of specific contracts and can’t be used to purchase fixed assets, pay back taxes, or refinance existing debt. Seasonal CAPLines are used to fund seasonal increases of inventory or accounts receivable, although in some cases it can be used for increased labor costs. Working Capital CAPLines are used for short-term needs and can’t be used for delinquent taxes or floor planning, and there are also limitations for acquiring fixed assets.

SBA 7(a) Loan Rates & Fees

The loan rates and fees for SBA 7(a) loans are extremely competitive with traditional loans. The rates and fees vary depending upon the type of loan selected. It’s also important to note that down payments, collateral, and personal guarantees are typically required for all SBA 7(a) loans. Here’s a look at SBA 7(a) loan base rates and markups:

Loan Amount Less Than Seven Years More Than 7 Years

Up to $25,000

Base rate + 4.25%

Base rate + 4.75%

$25,000 – $50,000

Base rate + 3.25%

Base rate + 3.75%

$50,000 or More

Base rate + 2.25%

Base rate + 2.75%

Standard 7(a) Loans:

The interest rates for SBA 7(a) loans are set by the lender, but all interest rates must fall below the maximum rates put in place by the SBA. For Standard 7(a) loans, the interest rate is based on the current prime rate. Lenders can add between 2.25% and 4.75% to the prime rate, depending upon the total loan amount taken and the repayment terms. For real estate, repayment terms up to 25 years are available. Business acquisitions and equipment financing come with terms up to 10 years. For working capital, the loan maturity is 7 years.

A one-time guarantee fee up to 3.75% may be passed on to the borrower. Additional fees may also be required by the lender, including but not limited to closing costs or referral fees. A prepayment penalty applies when the loan is paid within the first three years when the repayment terms are 15 years or longer.

SBA Express Loans:

The maximum interest rate for SBA Express loans is slightly higher. Lenders can charge the current prime rate plus an additional 4.5% to 6.5% based on the amount borrowed. Terms are the same for SBA Express loans as Standard 7(a) loans. A guarantee fee of up to 3% can be passed on by lenders to borrowers of Express loans, while additional fees including packaging fees and closing costs may also apply.

SBA Community Advantage Loans:

Community Advantage loans have a maximum rate set by the SBA as the prime rate plus 2.75% to 6%. Repayment terms for these loans are similar to Standard 7(a) loans – up to 25 years for real estate and up to 10 years for acquisitions, inventory, equipment financing, and other expenses. Closing costs and fees for appraisals, reports, and other costs may be passed on to the borrower.

Veterans Advantage Loans:

Veteran’s Advantage loans come with the same repayment terms and interest rates as Standard 7(a) loans. The difference is in the guarantee fee, which is reduced by 50% for loans from $125,001 to $350,000.

Export Express & Export Working Capital Loans:

Repayment terms remain the same as other 7(a) loans, while interest rates are set between 4.5% and 6.5% on top of current prime rates. A guarantee fee up to 3% will also be paid and varies based on the term length and amount borrowed.


Repayment terms for CAPLines are up to 5 years. A maximum interest rate of the prime rate plus 2.25% to 4.75% has been set by the SBA. A one-time guarantee fee between 2% and 3.75% will also be charged, as well as additional expenses similar to other SBA 7(a) loans.

SBA 7(a) Loan Borrower Requirements

There are a few requirements set by the SBA that apply across the board for all SBA 7(a) loans. All businesses must be based in the United States and must be for-profit. All applicants must qualify as a small business with 500 or fewer employees and a net worth below $15 million. Businesses must not be engaged in illegal operations.

Borrowers must have a solid credit history, with a recommended score of 680 or higher. Borrowers should be prepared to offer adequate collateral, including personal real estate if needed. Personal guarantees are required. The applicant must also show a legitimate business need for the loan and must have exhausted other financial options before applying.

All applicants should be prepared to show documentation for ownership, personal and business credit, and financial outlooks. Startups are required to have a solid business plan prepared. Anyone applying for the Veterans Advantage program must have a business that is at least 51% owned and controlled by a veteran, servicemember, reservist, or National Guard member. A current or widowed spouse is also eligible to apply.

Think the SBA 7(a) loan program is right for you? Before you apply, find out everything you need to know about this popular small business financing option.

The SBA CDC/504 Loan Program

The SBA’s CDC/504 loan program is a bit different because instead of working with one intermediary, a borrower works with two: a participating lender and a Certified Development Company.

With these loans, the SBA provides up to 40% of the total cost of a project through a Certified Development Company. A traditional lender, such as a bank or credit union, provides 50% of the total project cost. The borrower is responsible for the remaining 10% of the total project cost. The maximum SBA loan amount distributed through this program is $5 million.

SBA 504 Loan Uses

While there are some limitations, the CDC/504 loan program can be used in a variety of ways to update, expand, or improve a small business. These loans can be used to purchase buildings or land, improve land, renovate facilities, or purchase long-term fixed assets. Debt can be refinanced using these funds provided that the debt is connected to the purchase or renovation of facilities or equipment.

Funds from these loans can’t be used for repaying or refinancing debt (other than the refinancing of debt as described above). It also can’t be used to purchase inventory or for use as working capital.

SBA 504 Loan Rates & Fees

The interest rates for 504 loans are based upon the market rate of 5-year and 10-year Treasury issues. The portion that is funded through a traditional lender will be subject to the lender’s own interest rates. Repayment terms of 10 years and 20 years are available for the SBA-funded portion of the loan. Funding fees, processing fees, and closing fees may also apply and can be financed with the loan.

SBA 504 Loans

Borrowing Amount

No maximum, but the SBA will only fund up to $5 million

Term Lengths

10 or 20 years

Interest Rates

Fixed rate based on US Treasury rates

Borrowing Fees

  • CDC servicing fee, CSA fee, guarantee fee, third party fees (however, most of these fees are rolled into the interest rate or cost of the loan)
  • Possible prepayment penalty

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business


Collateral required; usually the real estate/equipment financed

Down Payment

10% – 30%

SBA 504 Loan Borrower Requirements

SBA 504 loan borrowers must meet all standard requirements set by the SBA. Borrowers must operate a for-profit business and should not be involved in nonprofit, speculative, or passive activities. Borrowers must show a legitimate need for the financing. They must also find a CDC and additional lender that operates in their area. Collateral is generally required, although typically the assets that are being financed serve as collateral. Personal guarantees are also needed from all applicants and owners of 20% or more. Read on to learn more about SBA 504 loans.

Should I Choose An SBA 504 Loan Or A 7(a) Loan?

Wondering which SBA loan is right for you? Here’s a quick comparison of the two.

504 VS 7(a) Loan Usage

SBA 7(a) Loans SBA 504 Loans
  • Working capital
  • Commercial real estate purchasing
  • Equipment purchasing
  • Purchasing a pre-existing business
  • Refinancing debt
  • Purchase an existing building
  • Purchase land and land improvements
  • Construct new facilities
  • Renovate existing facilities
  • Purchase machinery and equipment for long-term use
  • Refinance debt in connection with renovating facilities or equipment

504 VS 7(a) Rates & Terms

SBA 7(a) Loans SBA 504 Loans

Borrowing Amount

Max. $5 million

No maximum, but the SBA will only fund up to $5 million

Term Lengths

7 – 25 years

10 or 20 years

Interest Rates

Variable rate of a base rate plus a markup of 2.25% – 6.5%

Fixed rate based on US Treasury rates

Borrowing Fees

Guarantee fee, other fees from lending partners

CDC servicing fee, CSA fee, guarantee fee, third party fees (most fees are rolled into the interest rate or cost of the loan); possible prepayment penalty

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business

Guarantee required from anybody who owns at least 20% of the business


Collateral required; specifics vary based on business and loan use

Collateral required; usually the real estate/equipment financed

Down Payment


10% – 30%

504 VS 7(a) Borrower Requirements

SBA 7(a) Loans SBA 504 Loans
  • For-profit business considered “small” by the SBA
  • Engaged in business in the United States
  • Not in an ineligible industry
  • Strong personal and business credit
  • Strong business financials
  • Strong business plan
  • For-profit business
  • Tangible net worth less than $15 million
  • Average net income less than $5 million
  • Engaged in business in the United States
  • Not in an ineligible industry
  • Strong personal and business credit
  • Strong business financials
  • Strong business plan

The SBA Microloan Program

Small business owners looking for a smaller loan can apply for the SBA Microloan program. Through this program, borrowers can work with nonprofit intermediaries to receive up to $50,000 in low-interest funding.

SBA Microloan Uses

SBA Microloan funds can be used in almost any way to operate or expand a business. Purposes for these loans range from working capital to purchasing supplies and equipment. However, microloans can’t be used for purchasing real estate or refinancing debt.

SBA Microloan Rates & Fees

The interest rates for microloans are based primarily on the intermediary’s cost of funds. The intermediary may charge this rate plus a maximum of 7.75% on microloans exceeding $10,000, or up to 8.5% on loans that are $10,000 or less. The maximum maturity for microloans is six years.

Packaging fees between 2% and 3% may also be charged by intermediaries. Additional fees, including but not limited to credit reports, filing fees, recording fees, or other closing costs, may also apply. Find out more about the rates, terms, and fees of microloans before applying.

SBA 504 Loans

Borrowing Amount

$500 – $50,000

Term Lengths

Up to 6 years

Interest Rates

6.5% – 13%

Borrowing Fees

Possible fees from the loan issuer

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business


Collateral normally required, but depends on the lender

Down Payment

  • No down payment for most businesses
  • Possible 20% down payment for startups
  • Possible 10% down payment for business acquisition loan

SBA Microloan Borrower Requirements

Microloans are subject to the same standard requirements set by the SBA, including qualifying as a small business. All businesses must be for-profit, although non-profit childcare centers also may apply.

Applicants seeking more than $20,000 must pass the SBA’s “no credit elsewhere” test. This simply means that any borrower must have sought other non-federal means of financing before applying. There must also be a legitimate need for the financing, and it should be proven that the small business is set up for a profitable and successful future.

Collateral may be required, but this decision falls upon the lender. The SBA simply requires the lender to use “prudent lending practices” when determining whether a microloan should be collateralized. Credit is also a consideration and scores should be at least 680 upon applying.

How To Apply For SBA-Backed Loans

business acquisition loan

With so many options, it’s easy to see why SBA loans are the ideal choice for any established small business or startup. Once you’ve found a loan that best suits the needs of your business, it’s time to take the next step and apply for funding.

Before reaching out to a lender, it’s important to make sure that you complete as much legwork on your end as possible. One of your first moves should be to make sure your credit is where it needs to be to qualify. As previously mentioned, a minimum score of 680 is ideal, although higher scores have higher chances of approval. You can easily obtain a free credit report and score online to see where you stand. You can also use your free report to check for any errors that need to be disputed. If there are any negative marks on your report that are accurate, you will need a reasonable explanation for each. Find out more about the requirements needed to obtain an SBA loan.

Once you’ve confirmed that your credit is up to par, the next step is to begin gathering documentation. Requirements vary by lender, but you should expect to provide a minimum of 2 years’ worth of personal and business tax returns, financial statements, business licenses, and financial projections. Startups should have a solid business plan prepared to replace financial documentation that may not be available.

The next step is to find an SBA-approved lender that services your area. Once you’ve found your lender, there is a strong possibility that you will be required to appear in their office. A list of documentation may be provided before your meeting. Some lenders may also allow you to start the application process online or over the phone.

Your lender will go over all required documentation, as well as their interest rates, terms, and other vital information such as down payments and collateral requirements. Make sure that you understand all terms before moving forward in the process. Once you’ve come to an agreement, your application is completed and sent off for approval and underwriting.

At this point, it’s important to understand that the funding process for SBA loans can be lengthy. On average, expect to wait a minimum of 30 to 90 days for your funding. Potential delays may further prolong the process. If you’ve applied for specific programs such as the SBA Express loan program, approval may be received in just days, but additional time will be required to close and fund the loan.

Where Do I Find SBA Loans?

To find an SBA loan in your area, you can visit the SBA’s website for more information. You can use the site’s Lender Match tool to be paired with a lender that can provide the loan you’re looking for. You can also ask for a referral for an SBA-approved lender from your financial institution. Make sure that the lender you choose is authorized to provide the specific type of loan that interests you.

Once approved, the loan will be closed and you’ll receive your funding. The final step is to use your funds responsibly. Remember to always pay your loan based on the agreed-upon terms and use all loan proceeds to further improve or expand your business to elevate your success.

The post The 3 Types Of SBA Loans Business Owners Should Know About appeared first on Merchant Maverick.


How To Apply For An SBA Loan: A Complete Guide

You’re ready to take your business to the next level. Perhaps you want to add to your team of all-stars, or you want to upgrade your equipment with the latest and greatest technology. Maybe you’re a startup and you’re ready to bring that next great idea to life. No matter how you slice it, starting or upgrading your business hinges on one big question: how are you going to pay for it?

Most of us don’t have unlimited amounts of cash at our disposal, so we have to rely on outside help to fund new projects, renovations, and other expensive initiatives to launch and grow our businesses. When it comes to financing, smart small business owners know that you can’t go wrong with a loan from the Small Business Administration.

That’s why you’re here. You’ve heard about the benefits of SBA loans and now you’re ready to get funded. There’s just one problem: you don’t know how to begin when it comes to the application process.

While it may be intimidating, the SBA loan application process isn’t that much different from getting a loan from your bank. However, knowing what to expect before you get started can help the process go much more smoothly and eliminate the hassles and headaches that come with being unprepared.

Take a deep breath and read on to find out how to complete the SBA loan process from start to finish.

The Basic SBA Loan Application Process, Step-by-Step

1. Determine Whether You Meet The SBA’s Lending Requirements

Before you even fill out an application or talk to a lender, the first step to obtaining an SBA loan is to make sure that you’re qualified to receive one. In order to obtain a loan from the SBA, your business must qualify as a small business under the organization’s guidelines. Typically, this means that your business must have no more than 500 employees, although this number could rise based on your industry. Net annual income should not exceed $5 million, while the business’ net worth shouldn’t be more than $15 million.

To be eligible for an SBA loan, the business must also be operated and headquartered in the United States. The small business should be for-profit (although non-profit child care centers qualify for SBA Microloans) and not engaged in illegal activities. Businesses involved in lending, investing, and real estate rentals do not qualify for most programs.

Depending on which loan program you select, there may be additional requirements. For example, only veterans, service members, or the spouses or widows of veterans or service members can apply for the Veterans Advantage program. The Community Advantage program is limited to underserved areas, which include low-income communities and businesses owned by women, minorities, and veterans.

One of the most important factors in the SBA lending equation is your credit report and score. Because SBA loans offer such competitive terms, it should come as no surprise that you need a good credit score to qualify. In general, a minimum score of 680 is required to even be considered for these loans.

Your score isn’t all that comes into play, though. Your full credit report (both personal and business) will be evaluated by a lender to determine if you qualify. Defaults on previous government-backed loans will disqualify you from receiving an SBA loan. Foreclosures or bankruptcies may also prevent you from receiving an SBA-backed loan. Negative items on your report, such as collections or past due accounts, won’t necessarily bar you from receiving a loan, but a valid explanation for each negative item will be required by the lender.

This is why it’s so important to know your score and review your report before even starting the process. It’s easy to obtain a free credit score and report so that you can make sure you qualify and dispute any erroneous items. If you find that your credit score is low, you can begin taking steps toward improving your credit before you apply.

2. Choose An SBA Loan Program

You’ve determined that you fit all of the requirements for obtaining an SBA loan. Now, the next step is to understand the SBA loan programs that are available and which works best for you. Each program has specific rates, terms, and maximum loan amounts, as well as requirements for how the money is used.

You’ll need to evaluate your business needs to decide which program is the best fit.

Loan Program Description More

7(a) Loans

Small business loans that can be used for many many business purchases, such as working capital, business expansion, and equipment, inventory, and real estate purchasing.



Small loans, with a maximum of $50,000, which can be used for working capital, inventory, equipment, or other business projects.


CDC/504 Loans

Large loans used to acquire fixed assets such as real estate or equipment. 504 Loans are offered in partnership with Community Development Companies (CDCs) and banks.


Disaster Loans

Loans used to rebuild or maintain business following a disaster. 


7(a) Loans

SBA 7(a) loans are the most popular among small business owners. This is primarily because of the extremely favorable terms and the flexibility with how funds can be used. With the 7(a) program, loan proceeds can be used toward just about any business expense. This includes purchasing equipment or inventory, acquiring a new business, renovating new facilities, working capital, or even refinancing old, high-interest debt. Standard 7(a) loans have a maximum loan amount of $5 million.

Through the Community Advantage program, underserved communities can receive financing when traditional lending isn’t a good fit. The Veterans Advantage program offers the same great benefits along with reduced guarantee fees. Express loans offer less funding but guarantee an approval response within 36 hours. It’s important to note that loans through the Express program come with a slightly higher but still competitive interest rate than other 7(a) loans.

In general, expect to pay between 7% to 9% interest on standard 7(a) loans. Repayment terms are up to 10 years for most purposes and 25 years for real estate purchases. Startups and established businesses are eligible to apply for 7(a) loans. This program is a good fit for almost any small business because these loans are the most flexible. SBA 7(a) loans are available through SBA-approved lenders, including banks and credit unions. Read more about SBA 7(a) loan programs.

Loan Amount Less Than Seven Years More Than 7 Years

Up to $25,000

Base rate + 4.25%

Base rate + 4.75%

$25,000 – $50,000

Base rate + 3.25%

Base rate + 3.75%

$50,000 or More

Base rate + 2.25%

Base rate + 2.75%


Small businesses requiring smaller amounts can apply for an SBA Microloan. Microloans are available through participating nonprofit organizations. The maximum borrowing amount through this program is $50,000. This money can be used for a variety of purposes, including the purchase of supplies, materials, and equipment. It can also be used as working capital. Microloans can’t be used for the purchase of real estate or paying delinquent taxes.

Like other SBA loan programs, SBA Microloans come with competitive interest rates. These rates are based on the intermediary lender’s cost of funds. The average rate is about 7.5%.

These loans are best for startups and small businesses that need smaller loans. This is also an excellent choice for non-profit childcare centers that are ineligible to apply for loans through the 7(a) program. If a microloan program seems like the right fit for your business, read on to learn more.

SBA 504 Loans

Borrowing Amount

$500 – $50,000

Term Lengths

Up to 6 years

Interest Rates

6.5% – 13%

Borrowing Fees

Possible fees from the loan issuer

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business


Collateral normally required, but depends on the lender

Down Payment

  • No down payment for most businesses
  • Possible 20% down payment for startups
  • Possible 10% down payment for business acquisition loan

504 Loans

The SBA’s 504 loan program is designed for businesses that want to expand or upgrade their facilities or equipment. Funding of up to $5 million is available through the SBA’s 504 program to purchase buildings or fixed assets, to build or update new facilities, or to purchase or improve land. Proceeds can also be used toward refinancing existing debt related to renovating, purchasing, or building new facilities or equipment.

Through the 504 program, the SBA will provide up to 40% of the total project cost through a Certified Development Company. Fifty percent of the project costs must be financed through a traditional lender. The remaining 10% of costs are the responsibility of the borrower. Interest rates for SBA 504 loans are based on 5-year and 10-year Treasury issues. Repayment terms are set at 10 years and 20 years.

Small business owners that wish to update or expand their facilities or equipment are the best candidates for this loan program. If this sounds like you, learn more about the terms, eligibility, and requirements of SBA 504 loans.

SBA 504 Loans

Borrowing Amount

No maximum, but the SBA will only fund up to $5 million

Term Lengths

10 or 20 years

Interest Rates

Fixed rate based on US Treasury rates

Borrowing Fees

  • CDC servicing fee, CSA fee, guarantee fee, third party fees (however, most of these fees are rolled into the interest rate or cost of the loan)
  • Possible prepayment penalty

Personal Guarantee

Guarantee required from anybody who owns at least 20% of the business


Collateral required; usually the real estate/equipment financed

Down Payment

10% – 30%

SBA Disaster Loans

Sometimes, the unexpected happens. Whether it’s a sudden deployment, a natural disaster, or changes within the economy, these unforeseen events can have damaging effects on a business, even leading some owners to shut their doors for good.

The SBA understands these situations and offers various Disaster Loan programs designed to help small businesses weather the storm. These loans include Physical Disaster Loans, Economic Injury Disaster Loans, and Military Reservists Economic Injury Loans.

Through the Physical Disaster Loan program, businesses and nonprofit organizations can receive up to $2 million for the repair or replacement of damaged property. This includes real estate, fixtures, inventory, and equipment used to operate the business. Loan proceeds can be increased to offer protection from future disasters, covering losses that are uninsured or under-insured and providing business owners with an extra level of protection. Repayment terms can be set up to 30 years, and interest rates are set at 4% and 8%.

Through the Economic Injury Disaster Loan, businesses and nonprofit organizations can apply for up to $2 million if economic injury occurs. This money can be used to cover financial obligations that would have been paid by the business had it not been affected by the disaster. Repayment terms are up to 30 years with interest rates set by the SBA at 4% and 8%.

The Military Reservist Economic Injury Disaster Loan is designed for reservists who have been called for active duty. These loans are used for the working capital needed to pay business expenses until the employee returns from active duty and business operations recover. They cannot be used for refinancing debt, business expansions, or to cover income or profit losses. The total amount of the loan is based on the actual economic injury as determined by the SBA. Interest rates for these loans are set at 4% with a maximum repayment term of 30 years.

Term Rate/fee

Borrowing Amount

Maximum $2 million

Term Lengths

  • Max 30 years if no credit available elsewhere
  • Max 7 years if credit available elsewhere

Interest Rates

  • Maximum 4% if no credit available elsewhere
  • Maximum 8% if credit available elsewhere


None from the SBA; possible fees from outside agencies

3. Decide On An SBA Partner Lender

Once you’ve narrowed down your loan options and have selected the program that’s right for your business, you’ll need to find an intermediary. SBA loans do not come directly from the SBA to the borrower. Instead, these government-backed loans are provided through approved lenders including banks, credit unions, private lenders, CDCs, and nonprofits. Because the SBA guarantees at least 50% of loan proceeds (and in most cases, 85%), lenders are more willing to provide these loans to qualified small businesses.

This doesn’t mean that you can just walk into any bank and receive an SBA loan. You have to find an SBA lender partner that services your area. There are a few different ways that you can do this.

The first thing you can do is consult any financial institution with which you have a working relationship. Explain the type of SBA loan that you’re looking for and ask for a referral for local SBA intermediaries.

You can also visit the SBA website, which offers a Lender Match service. Simply input a small amount of personal information, and this tool will match you to a lender that services your area.

SmartBiz is another option you can consider. You can quickly and easily find, apply for, and receive an SBA loan through this service. This online loan marketplace can also match you up with other sources of funding if you don’t qualify for an SBA loan. There are also loan matching services and online brokers that can help you find a lender and offer support through the application process.

4. Compile An SBA Loan Application

Once you’ve found an SBA-approved lender, it’s time to dive into the actual application process. This process can be a little intimidating, but it doesn’t have to be difficult provided you know what to expect going in. The most important thing is to make sure you come prepared with the proper documentation.

SBA borrower information forms are required for every partner, director, managing member, or owner of the company. All owners with at least a 20% stake in the company should also be prepared to sign a personal guarantee and have their resumes available. Personal financial statements will also need to be provided.

For the business, an income statement, balance sheet, and federal income tax returns for the last three years must be provided. A cash flow projection for a period of one year will also need to be included with the application. Business and personal credit reports will also be used to determine your creditworthiness.

For collateral requirements, real estate appraisals, lease agreements, and environmental reports are required. Additional documentation including Articles of Organization, all business licenses, and information pertaining to judgments and lawsuits may also be needed. Affiliated and subsidiary business information will need to be provided during the application process.

Before meeting with the lender, you can inquire about any additional documentation that is needed so that it can all be compiled prior to filling out the application.

5. Be Available For Follow-Up Questions

Once the application has been submitted for your SBA loan, the next step is to wait for your approval. Depending on the loan you’ve applied for, approval can take several weeks, although some options — like SBA Express loans — will be approved within 36 hours.

During this time, you should communicate with your lender and make yourself available for any additional follow-up questions. More documentation may be required by the lender, so make sure that you deliver this in a timely manner to avoid delays in the application process. Typically, you should expect the entire process from application to funding to take 30 to 90 days.

How To Apply For An SBA 504 Loan

The SBA 504 loan process is a bit different than the standard SBA loan process. More documentation is required for these loans. This includes but is not limited to estimates, quotes, and costs from vendors and contractors that will be working on the funded project. For real estate purchases, an independent appraisal is required.

Because the borrower will also be working with another lender, a letter of intent from the lender will need to be submitted with the SBA application. The lender will also need to provide a reason for why it will not provide financing for the entire project.

If debt is to be refinanced using 504 loan proceeds, the borrower must provide information on the current debt, including lien instruments and account transcripts.

How To Apply For An SBA Loan To Buy A Business

When SBA loan proceeds are used to purchase a business, the process does not differ much from what it would be when applying for any other loan. Credit reports and financial documentation will be required to determine eligibility. However, there are a few additional documents needed for approval of the loan.

If real estate is being purchased using the loan, business, stock, and asset purchase agreements are required. A real estate purchase agreement is also needed and will be submitted along with other documentation and the SBA loan application.

A business plan is also typically required. The applicant must also show that they have experience in the industry of the business they plan to acquire.

How To Apply For An SBA Loan For A Startup

If you’re a startup business (defined by the SBA as a business that has been in operation for 2 years or less), there are a few different requirements for applying for an SBA-backed loan.

There are certain documents that startups simply won’t have, such as three years’ worth of business income tax returns. However, alternative documentation can be used to qualify a new business, including a detailed business plan, a cash flow analysis, and financial projections of at least one year.

To qualify for SBA loans, startups must be able to show through this documentation that they will be successful and profitable, despite their short operating history. The applicant must also show proof of industry experience.

How To Apply For An SBA Loan For A Franchise

SBA loans are available for franchises. In many cases, loans for a franchise are easier to obtain than for the purchase of other new businesses because the franchise has a proven business model.

The organization has its own SBA Franchise Directory. This directory has a listing of all brands that are eligible to receive financing from the SBA. This list includes everything from restaurants to dry cleaners and insurance agencies. All brands that meet the FTC definition of a franchise are included on the list.

Some franchises do not fit under the FTC’s definition of a franchise. In these cases, the SBA has the option to add brands to the directory if it meets other requirements.

Financing, including the 7(a) standard loan, can be obtained to purchase a franchise. The same documentation for other SBA loans applies. In addition, agreements between the franchisor and franchisee will also need to be produced, as well as other documentation.

SBA Loan Application Process FAQs

How long does it take to get an SBA loan approved?

The time it takes to get approval on your SBA loan varies. Gathering the needed documentation may take weeks, while the approval process itself can several weeks or even months, especially if more information is required.
Applicants who need approval in a hurry can turn to the SBA Express loan. Even though this provides lower maximum funding than other SBA loan options, approval is guaranteed within 36 hours. However, it’s important to note that the actual underwriting and funding of the loan will take additional time.

Where do I apply for an SBA loan?

To apply for an SBA loan, you will need to work with an SBA-approved lender. Use the SBA Lender Match tool, a loan broker like Lendio, or consult with your existing financial institution to find a lender near you.

You can also use the SmartBiz marketplace online to prequalify and apply for SBA loans. If you don’t qualify, other lending options are available through SmartBiz.

I have bad credit. Can I still be approved for an SBA loan?

Your creditworthiness is an important factor in getting approved for an SBA loan. If you have a credit score that falls below 680, it’s unlikely that you’ll be approved.

If you need a loan but don’t qualify for an SBA loan, don’t worry – you have options. The first thing to do is begin working on your credit. Obtain your free report and score, then follow these helpful hints for boosting your score.

In the meantime, you can also check out your other business loan options. Online small business loans can be obtained with credit scores as low as 500. While the terms may not be as favorable as with SBA loans, there are still some great options out there that will help you get the financing you need today.

What if I need assistance with my SBA loan application?

Navigating the SBA loan application process can be difficult, but you don’t have to do it alone. If you have questions about completing your loan application, you can always ask your SBA-approved lender. If you haven’t yet found a lender to work with, SCORE is a great resource. This nonprofit organization provides resources and services including free business mentors that can help you through every step of the process.

I don’t qualify for an SBA loan/my application was rejected. What are my options?

If you don’t qualify for an SBA loan or your application was rejected, you’re not alone. SBA loans are extremely competitive and getting this type of funding can be difficult. However, this doesn’t mean that you’re stuck without the financing you need. Instead, you can apply for a non-SBA business loan.

Online business loans have less stringent requirements. Terms vary depending on the lender you work with and your creditworthiness. Installment loans, short-term loans, lines of credit, credit cards, and other financing options are available through online business lenders. To find the loan that’s right for you, check out this comparison of the most popular small business loans.

Final Thoughts

SBA loans are a great option for small business owners, but the application process can be frustrating when you don’t know what to expect. Being prepared, gathering your documentation in advance, and knowing what to expect beforehand can help simplify the process, putting you on the path to financing for your small business.

The post How To Apply For An SBA Loan: A Complete Guide appeared first on Merchant Maverick.


SBA Loans For Real Estate: Your Best Options

The SBA has several options for small business owners in need of a business loan for real estate. Of the six types of SBA loans, 7(a) Loans and 504 Loans are the two most viable options for real estate purchases. Other SBA loans (CAPLines, Export, Microloans, and Disaster) either prohibit borrowers directly from using funds for real estate or are not set up in a way to support such purchases.

Types Of SBA Loans For Real Estate: SBA 504 vs 7(a)

If you need an SBA loan to buy property, a 504 or 7(a) Loan is your best bet. While both can be used for real estate, the two do have differences that make some better for small business owners than others.

The main differences are in where the funding originates, the loan structure, and the SBA loan down payment. 504 loans are supported by both the SBA and CDCs (certified development companies) and have strict loan structures in which the borrower is only required to make a down payment of 10%.

A 7(a) loan is backed only by the SBA. The structure of the loan can vary dramatically depending on the risk involved with financing– 10% is the minimum down payment required.

504 loans offer fixed-rate financing, while 7(a) loan products offer lower but variable fees adjusted quarterly.

SBA CDC/504 Loans

The SBA 504 loan is a program backed by the SBA and Certified Development Companies. These selective loans are open to for-profit small businesses operated by United States citizens and resident aliens. They offer fixed interest rates, long-term financing, and smaller down payments.

The purpose of 504 Loans is to promote job creation through supporting small businesses. Recipients are connected with a CDC, a non-profit organization that is certified and regulated by the SBA. The CDC will then provide financing in partnership with the SBA.

Loan Usage

These loans can be used for fixed assets, like real estate, and a few soft costs.

There are strict policies on how the funds may be used– borrowers cannot use financing for working capital, inventory, or consolidation or repayment of debt.

Because of the focus on fixed assets, 504 Loans are often referred to as SBA Real Estate Loans or SBA Commercial Real Estate Loans. A 504 loan can be used for purchasing an existing building, land or land improvements, constructing or renovating facilities, purchasing equipment for long-term use, or refinancing debt connected to renovation or equipment. This policy makes a 504 Loan a great option for a real estate loan.

Rates & Terms

SBA real estate loan rates do vary depending on loan and lender. 504 loans are known for long-term fixed rates and fees, set by the current market rate for 5- or 10-year Treasury issues. Fees may include:

  • Interest rates
  • CDC servicing fees
  • Central servicing agent fees
  • SBA guarantee fees
  • Bank fees
  • Third-party fees
  • Prepayment fees

While no limit exists on project size for 504 loans, there is a maximum SBA loan amount of $5 million. This number may rise to $5.5 million if the recipient intends to use the money to finance an energy-related project.

How To Apply

If you intend to apply for a 504 loan, the SBA asks you to provide proof of:

  • Eligibility
  • Indebtedness
  • Creditworthiness

The 504 loan application guides potential recipients through the process of providing such material. It is a lengthy application — thirteen pages, to be exact. You can expect to provide information on your small business’s project costs, energy efficiency goals, debenture pricing, and more. The application can be completed and submitted to your area’s CDC, which will then partner with the SBA Loan Processing Center to determine eligibility. You can get connected with your regional CDC through the SBA’s online resource for small business owners.

SBA 7(a) Loans

7(a) loans are the most popular financing option for small business owners. They are backed by the SBA in amounts up to 85%, providing opportunities for businesses that may be ineligible for traditional loans. There are several types of 7(a) loans that provide versatility, long terms, favorable rates, and flexibility for small businesses.

Loan Usage

7(a) loans can be used for a wide variety of needs: working capital, building, renovating, business startups, construction, real estate, equipment, and more, depending on your lender and loan agreement. This versatility, of course, also includes fixed assets such as real estate purchases. 7(a) loans are flexible and can be negotiated depending on a particular business’s needs; this makes them a viable option for many small businesses purchasing real estate.

Rates & Terms

Rates and terms for 7(a) loans can vary depending on the specific loan agreement, lender, borrower, etc. The SBA Loan Calculator is a great way to better understand your specific loan’s rates and fees. We track the current SBA loan rates at merchant Maverick.

How to Apply

To apply for a 7(a) loan, you will need to fill out an online form that describes your business and its needs. The SBA uses this information to match you with a lender with whom you can negotiate a loan.

The documents you need will vary depending on which loan you apply for. Typical items you will need are:

  • Borrower Information Form
  • Statement of Personal History
  • Personal Financial Statement, Including Credit Score
  • Business Financial Statements
    • Profit and Loss Statement
    • Projected Financial Statements
  • Ownership and Affiliations
  • Business Certificate/License
  • Loan Application History
  • Income Tax Returns
  • Résumé
  • Business Overview and History
  • Business Lease

Do SBA Real Estate Loans Require A Down Payment?

While down payments do vary in size, there is usually a minimum 10% down payment required from SBA real estate loan recipients. You will also need collateral, which depending on your specific loan, can usually be any property or equity owned by the business. Some lenders will allow borrowers to use personal items, such as a personal home or vehicle, as collateral. Depending on the lender, an SBA loan of any kind may also require a personal guarantee from the borrower.

Final Thoughts

For real estate financing, SBA 7(a) Loans and SBA 504 Loans are the most viable options for small business owners. Both 7(a) and 504 loans offer reasonable rates and flexibility for business owners, so the best loan for your individual business will rely heavily on the specifics of your needs for real estate.

The post SBA Loans For Real Estate: Your Best Options appeared first on Merchant Maverick.


Top Business Credit Card Balance Transfer Offers

Sometimes you’ll need to transfer a previous credit card balance when getting a new card. However, not every card is made equal when it comes to transferring in an old balance. Some add on extra transfer fees or put a cap on how much you can transfer. Others may even tack APR onto balance transfers. Unfortunately, it’s not always easy to figure out the best credit card options when it comes to transferring a balance.

That’s why we’ve picked out some of the top balance transfer credit card offers for business owners. Read on through to find out which card could be best for you.

Top Business Credit Cards For Balance Transfers

Best Overall Pick: American Express Blue Business Plus

American Express Blue Business Plus


Annual Fee:



Purchase APR:

12.99% – 20.99%, Variable

With a 0% intro APR for the first 15 months on purchases and balance transfers, this card from American Express offers the longest introductory period currently available. That means you’ll have plenty of time to pay your balance without racking up interest charges. For rewards, it provides two points per $1 up to $50,000 spent, and then one point per $1 after you hit that cap. Those points are usually worth $0.01 but may wind up higher or lower depending on how they are redeemed. Keep in mind that the balance transfer fee sits at 3% (with a minimum fee of $5) although that’s relatively normal.

For an in-depth look, spend some time with Merchant Maverick’s complete review.

Best For Those With Fair Credit: Capital One Spark Classic for Business

Capital One Spark Classic For Business

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Annual Fee:



Purchase APR:

24.74%, Variable

Because Capital One markets this card towards average credit applicants while packaging it with unlimited 1% cash back on all purchases, Spark Classic is a solid choice for those with fair credit. As long as you manage your account responsibly, you’ll help build up your credit score. Increasing your credit score could potentially allow you to switch to a card with better rewards. The Spark Classic for Business also comes with no balance transfer fee, no annual fee, and no foreign transaction fee.

Read our ultimate guide to learn more about improving your business credit score.

Best No Balance Transfer Fee: Capital One Spark Cash for Business

Capital One Spark Cash For Business

capital one spark cash select
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Annual Fee:

$95 ($0 the first year)


Purchase APR:

18.74%, Variable

With its unlimited 2% cash back on all purchases and no balance transfer fee, this card certainly appeals to those looking to transfer debt. Capital One also includes a welcome offer of $500 cash if you spend at least $4,500 in the first 3 months of opening your account. However, there is a $95 annual fee, although it is waived the first year. To qualify for this card, you’ll need to have excellent credit; you’re required to have had a loan or credit card for three-plus years with a credit limit in excess of $5,000 before getting a Spark Cash for Business card.

For a deep dive on Capital One’s card, take a look at Merchant Maverick’s full review.

Best Introductory APR Offer: American Express Blue Business Plus

American Express Blue Business Plus


Annual Fee:



Purchase APR:

12.99% – 20.99%, Variable

While this card also made the list at best overall, its 0% APR for 15 months is hard to beat when looking at introductory APRs. Because that 0% intro APR is applicable to both purchases and balance transfers, this card is especially attractive for those with balance transfers. Do note, however, that American Express does attach a pretty normal balance transfer fee of 3% or $5—whichever is higher.

Get the full rundown on the American Express Blue Business Plus with our in-depth review.

Best For Cash Back: Chase Ink Business Cash

Chase Ink Business Cash

Apply Now

Annual Fee:



Purchase APR:

14.99% – 20.99%, Variable

The Ink Business Cash card offers a 0% intro APR on both purchases and balance transfers for the first 12 months. On top of that, Chase really packs some hefty rewards into their Ink Business Cash credit card. These rewards include 5% back on purchases at office supply stores and on internet, cable, and phone purchases up to a combined $25,000 each account anniversary year. You can also earn 2% back at gas stations and restaurants up to a combined $25,000 each account anniversary year. For everything else, you’ll get 1% cash back.

Head on over to Merchant Maverick’s in-depth review for more details on Chase’s card.

Why Would I Need To Do A Balance Transfer?

Two worried friends having problems buying on line with credit card and a laptop sitting on a couch in the living room at home

The most obvious reason for doing a business credit card balance transfer is if you’ve found a card with a lower APR or better rewards. You may also only want to transfer a certain amount of your debt in order to lower your per-card utilization ratio—potentially increasing your credit score.

Can I Use A Personal Card For A Balance Transfer?

As we mentioned in our guide to using personal credit cards for business expenses, you’ll want to separate personal and business expenses when possible. However, if you’ve already accrued some business debt on a personal card, you can transfer that debt onto your new business card. Doing this will help completely separate your personal and business expenses.

What Do I Need To Qualify & Be Approved?

Approval is dependant on the card and the issuer. Each issuer has their own requirements, but they’ll primarily look at your debt service coverage ratio (DSCR) and—most importantly—credit score. Every financial institution has their own standards, but for the most part, a credit score of 600 – 670 is considered “fair”, 671 – 750 is considered “good” to “very good”, and a score of 751 – 850 is considered “excellent”.

Don’t know your credit score? Visit a comparison of our favorite sites to check your credit score for free. Unsure how to calculate your DSCR? Check out our calculation guide.

What If I Don’t Meet The Necessary Qualifications?

If you’re struggling with your credit score, visit the Merchant Maverick guide to improving your business credit score. Or head over to our do’s and don’ts of business credit cards if you still need to learn the basics. You may also be able to consolidate your debt with a short-term loan; read up on the merchant’s guide to short-term loans for more information.

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SBA Community Advantage Loans: A Complete Guide

Every small business has one thing in common: they all need cash to operate. Money is required to start a new project, expand a business, or purchase the equipment required for daily operations, and sometimes that money has to come through financing. As many business owners know, though, this isn’t as easy as simply walking into a bank and receiving a loan, especially in underserved areas.

Sadly, whether we’re talking about an inner-city business or one that is owned by a woman or minority, funding can be hard to get. But funding for these demographics is critical, not just for the success and survival of the individual business, but to improve the economy throughout underserved markets. This is why the Small Business Administration has launched the SBA Community Advantage Loan Program. Read on to find out more about this innovative pilot program.

What Is The SBA Community Advantage Loan Program?

The Small Business Administration offers loads of resources for small business owners, including training, educational materials, and even funding. Any small business owner that has ever attempted to take out a loan knows just how difficult it can be to obtain traditional funding. This holds especially true for those in underserved communities.

What Is An Underserved Community?

Underserved communities typically include inner cities and rural areas. Federally designated Low-to-Moderate Income communities are considered underserved. Any business that has more than 50% of full-time staff members that are low-income or live in LMI areas is considered an underserved market. Businesses that are owned by minorities, women, and veterans are also included in this definition.

The SBA assists small business owners in becoming empowered and successful, and businesses in underserved markets are no exception. After all, a successful business doesn’t just benefit the owner – it also helps stimulate the economy and create jobs, which is especially critical in these low-income areas.

This is why the SBA has launched the SBA Community Advantage Loan Program. This financing program allows businesses in underserved areas to receive low-interest financing with reasonable terms. Business owners that can’t receive financing through traditional loan programs can take advantage of competitive rates and terms through this SBA pilot program.

Because this is an SBA pilot, there is a limited amount of time during which businesses can apply for and receive a Community Advantage loan. This small-scale project from the SBA will expire on March 31, 2020, after which businesses will have to consider one of the Administration’s other loan programs, such as the 7(a) program.

Community Advantage VS Standard 7(a) Loans

When exploring the options for SBA business loans, the Standard 7(a) program is typically the most popular. Why, then, would a business consider applying for a Community Advantage loan? Looking at the differences between the two programs can help determine which is the best choice for any business.

First, it’s important to understand how SBA loan programs work. The Small Business Administration does not provide funding directly to small businesses. Instead, the SBA has created a framework and standards that enable banks, credit unions, and nonprofits to act as intermediaries and provide low-interest loans with flexible terms for business owners. Because these loans are backed by the SBA, there is less risk for the lender, so it can feel confident in loaning money to startups and established small businesses.

The SBA Community Advantage program was launched in 2011 and will be available through 2020. This program provides loans of up to $250,000 to qualifying small businesses. Because 85% of loan funds up to $150,000 and 75% of funds more than $150,000 are guaranteed by the SBA, lenders are more willing to work with businesses that have failed to obtain traditional financing. Loans can be used for almost anything, including the purchase of equipment or real estate, to refinance existing debt, or for use as working capital.

The maximum interest rate for these loans is set by the SBA as the prime market rate plus 6%. Rates are typically around 7% to 9%, which varies by lender. The background of the borrower, including credit score, could affect the interest rate, but it will never go above the SBA’s set maximum. Terms for these loans are dependent on how the money is used. Equipment purchases and working capital come with a maximum maturity of 10 years, while real estate purchases have a maximum term of 25 years.

The Standard 7(a) program has a few differences when compared to the Community Advantage program. For starters, the maximum loan amount for 7(a) loans is much higher. Borrowers can receive up to $5 million through this program, which makes it the better choice for anyone seeking more than $250,000. If you need a smaller loan and don’t qualify for the SBA Community Advantage program, you may want to consider SBA Microloans.

Interest rates for loans obtained through the 7(a) program vary and depend upon the amount borrowed. Rates are currently set at the prime rate plus a maximum of 4.75%. Average interest rates range from about 7% to 9% and are comparable to the rates of the Community Advantage program.

The repayment terms are also similar between the two programs. Loans used for working capital and equipment have maximum terms of 10 years, while real estate purchases have terms up to 25 years.

One of the biggest advantages of the Community Advantage program is that businesses without adequate collateral can be approved since the SBA backs between 75% to 85% of the loan. Collateral requirements will vary by lender.

Under the terms of 7(a) loans, lenders do not have to take collateral for loans that do not exceed $25,000. Lenders may opt to demand collateral for loans up to $350,000. Once the loan exceeds this amount, the SBA requires that the lender collateralize the loan up to the total loan amount. If business assets are not enough collateral, trading assets and personal real estate will be used. It’s also important to note that a personal guarantee is required to receive both 7(a) and Community Advantage loans.

Aside from the maximum loan amount, one key difference between the two programs is which businesses are eligible. Any for-profit business or startup that meets the general requirements set by the SBA can apply for a 7(a) loan. Only businesses that have met the qualifications of operating in an underserved area can apply for and receive Community Advantage funding.

If an SBA Community Advantage loan is the right choice for you, read on. If the 7(a) program sounds more in tune with your needs, read more about SBA 7(a) terms, rates, and eligibility.

Who Is Eligible For A Community Advantage Loan?

All applicants for an SBA Community Advantage Loan must meet the standard eligibility requirements set forth by the SBA.

Business owners applying for a Community Advantage loan must own a for-profit small business as defined by the SBA. This means that businesses should have fewer than 500 employees and under $15 million in annual revenue. Businesses must be based in the United States and must also be in the area that is served by their chosen lender. Businesses that participate in illegal operations, lending, or investment services are not eligible.

All applicants must have a purpose for obtaining the loan, be able to prove that they can repay the loan, and be able to demonstrate a need for the funding. In addition, applicants must have exhausted other financing options before applying for a loan through the SBA.

A good credit score is required for all SBA loans, including the Community Advantage program. A minimum score of 680 is recommended for the highest chance of approval. Any negative marks on a credit report will need to be explained to the lender. Unsure of your score? There’s no need to be – find out how you can obtain your free credit score before talking to a lender.

Finally, the SBA has requirements specific to the Community Advantage program. In order to qualify for a loan, the applicant must operate the business in an underserved market. By the SBA’s definition, this includes Low-to-Moderate Income communities, businesses where over half of the full-time staff is low-income, Empowerment Zones, Enterprise Communities, Promise Zones, and HUBZones.

In addition to the underserved communities previously listed, startups that have been in business for fewer than two years are also eligible to apply. Servicemembers and military veterans who qualify for the SBA Veterans Advantage program and meet all other requirements can also apply for a Community Advantage loan.

If you’re still unsure if the SBA Community Advantage program is right for your business, take a look at the requirements for other types of SBA loans that may better serve your needs.

How Do I Apply For An SBA Community Advantage Loan?

small business

If you need a loan of $250,000 or less and you operate your business in an underserved area, the SBA Community Advantage program may be the right choice for your financing needs. After you’ve determined that you’re qualified for the program, the next step is to begin the application process.

To begin, you will need to find a lender that offers SBA Community Advantage loans. You can use the SBA website to find a local lender in your area or you can ask your existing financial institution for a list of SBA Community Advantage lenders. Once you’ve found a lender, you’ll need to work with them online, over the phone, or in person to complete the application process.

Your lender will guide you through the process and will provide the details specific to your loan, such as interest rates, terms, and collateral requirements. The lender will also require personal information from you relating to your credit, finances, and business history. You can get started ahead of time by gathering a few critical documents.

To apply for your loan, you will need to provide financial statements, personal and business tax returns, and personal and business credit reports. You should plan to have all documents for at least the last two years.

For startup ventures that have been in operation for fewer than two years, a solid business plan and financial projections will be required to process your application. Please note that other documentation may be required for both established and startup businesses.

Once the application is completed, approval and funding typically take several months because of the lengthy underwriting and closing processes. The entire process from application to funding takes an average of 30 to 90 days (and sometimes longer). If you need approval in a hurry, consider the advantages of an SBA Express Loan.

After the application is approved and the underwriting and closing process is complete, funds will be distributed and you can use them to purchase, update, or expand your small business.

Final Thoughts

It’s no secret that SBA loans can be tedious to apply for and difficult to obtain, but the benefits of these small business loans outweigh the drawbacks. If you operate in an underserved community and need low-interest financing to improve your business, the SBA Community Advantage Program is certainly an option worth considering.

The post SBA Community Advantage Loans: A Complete Guide appeared first on Merchant Maverick.


Credit Cards Balance Transfers: A Guide for Small Business Owners

Picture this: you get a credit card for business expenses that comes with a high APR. Maybe it’s because you didn’t know any better, needed quick credit for an emergency, or simply didn’t have the credit score to qualify for better offers. No matter what the reason, you’re not alone. Even the savviest consumers and business owners can fall victim to high-interest credit cards.

Once you’ve used the card, you’re stuck with this high interest rate until you pay off the debt, right? Actually, you have an alternative that can lower your interest rates, potentially saving hundreds or even thousands in interest. That alternative? Transfer your balance to a credit card with a lower APR.

If saving money on interest is something that, well, interests you, read on to learn everything you need to know about balance transfer credit cards.

What Is Balance Transfer?

To put it simply, a balance transfer occurs when existing debt is transferred from one credit card to another. The transfer won’t eliminate the debt. While the first credit card will be paid off, the balance will simply be applied to the new card.

Is A Business Credit Card Balance Transfer Like A Normal Balance Transfer?

The primary difference between personal and business credit card transfers is how they are reported. Monthly payments, late payments, and defaults from normal credit cards affect your personal credit score, while business credit card payment history is typically reported to business agencies.

What Is A Balance Transfer Fee?

A balance transfer fee is a one-time fee charged by the issuer of a credit card for completing the transfer. This fee varies by company but typically runs 3% to 5% of the total transferred balance. When compared to long-term savings on interest, these fees are quite minimal for many business owners.

What To Watch Out For

You’ve transferred your balance to another card, and it’s all smooth sailing from there, right?

Not exactly. It’s important to note that balance transfers come with expiration dates. This period of time varies by issuer, but you can typically expect the introductory APR to expire between 6 and 18 months after making the transfer. Once the low interest rate disappears, the balance will be subject to the standard APR which could be 15%, 18%, or even higher.

Making a late payment could also result in losing the introductory APR; all balances would then become subject to the company’s standard APR.

Be aware that new purchases charged to the credit card will most likely not be covered by the introductory APR offer. Instead, new purchases are typically subject to the standard APR. Make sure you fully understand the terms, conditions, and rates surrounding new purchases before making your move.

How Long Do Balance Transfers Take?

Best Time Tracking Integrations

Once you’ve picked a balance transfer card that’s right for you, the process of completing the transfer is quite simple. All you need to initiate the transfer is information such as account numbers and the balance amount. Once all of the information has been submitted, you can expect the transaction to be completed in about two weeks.

Different Types Of Balance Transfer Offers

There are a few different types of balance transfers available. Make sure to shop around to find the card that offers the most savings while also providing a competitive interest rate after the promotional period has expired.

One of the first types of balance transfers is the no-fee offer. These balance transfer cards do not require you to pay the typical 3% to 5% transfer fee, which could add up to big savings on larger balances.

Another popular type of balance transfer is the 0% APR offer. These balance transfers offer a 0% introductory rate, making it easier to pay down or pay off debt. As previously mentioned, these offers do expire, so it’s important to be aware of standard APR rates and try to pay down as much of the debt as possible during the introductory period.

The Benefits Of Business Credit Card Balance Transfers

There are several benefits to taking advantage of a business credit card balance transfer. For starters, the money saved on interest allows business owners to pay down their debts much faster, which not only provides more unused credit but can also boost the credit rating of the business.

A business credit card balance transfer is also an easy way to consolidate debt and lower credit utilization. For example, if a balance of $4,000 on a card with a $5,000 limit is transferred to a new card with a $20,000 limit, credit card utilization on the new card is not as high, and additional purchases up to the higher limit can be made, keeping all expenditures on one card.

In some cases, additional debt balances can be transferred to a business credit card. High-interest loans and installment payments can sometimes be transferred, depending on the card issuer’s terms. This could save in interest and help reduce debt over a shorter period of time.

If business purchases have been made on a personal credit card, transferring the balance to a business card will also help boost your business credit, which is critical for obtaining business loans, equipment financing, and other business-related financial products.

Balance Transfer Drawbacks

Balance transfer cards aren’t without their drawbacks. A big mistake that many business owners and consumers make when signing up for these cards is not looking beyond the introductory APR. Sure, it sounds great in theory, but reading the fine print can reveal caveats such as a higher interest rate than what is currently paid. All terms and conditions should be fully understood before making the transfer.

It’s also easy to believe that once the introductory rate expires, the remaining balance can be transferred to another card. In reality, this can harm your credit score. Bouncing from card to card and keeping a high balance makes you a riskier venture, which could harm your chances at receiving additional financing when needed and can potentially lead to reduced credit limits on existing cards. Remember, a balance transfer card is meant to pay off debt more quickly and should be used responsibly.

I Want To Do A Balance Transfer – Where Do I Begin?

  1. Understand your current financial situation. What is your current balance, credit limit, and APR? Knowing this information will help you make an informed decision on whether making the transfer is the smartest financial move.
  2. Explore your options. If you’ve received a preapproved offer (or several), consider these first. Weigh the new terms and conditions with the terms and conditions of your old card or loan to see which are better. Remember to think over the long term and look beyond the introductory APR. Also, note that you typically cannot transfer balances between two cards from the same bank or provider.
  3. Choose a card. Apply for your chosen card once you’ve determined which best fits your needs.
  4. Wait for approval. Once approved, you can either use the credit card company’s online system or call customer service to provide details on the balance transfer. Remember, you will need balance amounts and account numbers to complete the transfer.
  5. Pay off the debt. Once the transfer is complete after 1 to 2 weeks, work to pay off your debt as quickly as possible. Don’t forget that the introductory APR expires, so your goal is to pay off as much as possible before this period ends.

Frequently Asked Questions

Is it better to pay off one credit card or reduce the balances on two?

The most effective way to tackle credit card debt is to focus on paying down the balance of the card with the highest interest rate. Chipping away at this debt will cut down on the interest you’re paying and help you pay off the card faster. After one card is paid off, continue this method to pay off all of your cards. Remember, even though you’re keeping the focus on one card, you always want to make sure you’re making at least the minimum payment on all credit accounts.

How do balance transfers affect your credit score?

Applying for a credit card does show up as an inquiry on your credit report, which can lower your score. It’s important to pick just one card with the best terms to avoid multiple dings on your credit. Transfers can be great for your credit score over the long term. In addition to potentially lowering your credit utilization, a lower interest rate allows you to pay off your debt quickly, which can boost your score.

Does a balance transfer automatically close the account I’m transferring from?

A balance transfer does not automatically close your old credit account. If you wish to close your account, contact the creditor once the balance has been transferred.

Can I transfer a personal credit card balance to a business credit card?

In some cases, yes, but it depends upon the terms of the company. It’s important to note that keeping business and personal expenses separate is often recommended, so this should be a consideration before a transfer is initiated. It is also important to remember that business cards typically require a personal guarantee, so you will still be held liable for the transferred debt.

Can I transfer a business credit card balance to a personal credit card?

Again, in some cases, you can do this, provided that both accounts are in your name. However, as previously mentioned, it’s typically recommended to keep business and personal finances separate for bookkeeping purposes.

The post Credit Cards Balance Transfers: A Guide for Small Business Owners appeared first on Merchant Maverick.


The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

If you’ve ever applied for a loan — whether it be for a car, a house, or even a small business — then I’m sure you’re well acquainted with the importance of credit scores. But what about credit reports?

Credit reports tell lenders about your credit history and indicate how reliable you are as a borrower. But more than that, credit reports help you understand your credit, improve your credit score, and prevent fraud and identity theft. So how do you get your credit report? That’s where credit bureaus like Equifax, Experian, and TransUnion come in.

In this post, we’ll cover everything you need to know about credit bureaus. Then we’ll break down the “big three” credit bureaus so you can confidently understand your credit report and score.

What Is A Credit Bureau?

Let’s start with the basics.

A credit bureau is a business organization that collects and sells data regarding the credit history of individuals. They typically collect data such as your credit card and loan balances, the number of credit accounts you have, your payment history, any bankruptcies, etc. Today, there are dozens of credit bureaus, but the “big three” are Equifax, Experian, and TransUnion.

Credit bureaus arose to help lenders quickly gauge the reliability of a potential borrower. In the past, you could go to the good ol’ general store and the owner would know you, your character, and whether or not putting your items on “charge” (or on credit) was a good idea. That method may have worked in the past, when communities were small and isolated, but there had to be a better way moving forward. Thus credit bureaus were born.

Credit bureaus collect data on potential borrowers and sell it to banks to help them make informed lending decisions. The oldest of the “big three,” Equifax, started capitalizing on this need all the way back in 1899.

Today, the credit bureaus have streamlined and computerized the whole process by compiling the data they collect into a credit report and credit score. While every credit bureau calculates credit scores differently, and every lender has different credit score requirements, credit reports and credits scores allow for a more universal measuring stick to judge potential borrowers by. Recently, credit bureaus also have branched out to providing dozens of additional products to help individuals and businesses alike, including identity protection, business marketing, and more.

How Do Credit Bureaus Collect My Information?

Okay, we admit it all sounds a bit creepy. Big Brother’s always watching, right? Well, yes, but it might comfort you to know how credit bureaus collect and share your information.

Credit bureaus mainly collect information from credit institutions with which you already have a relationship, such as:

  • Banks
  • Credit card companies
  • Student loan providers
  • Auto loan providers

Credit bureaus do not have access to these accounts; instead, the credit institutions share the information with the credit bureaus. Credit institutions are not obligated to share information and can give data to one, two, three, or none of the major credit bureaus. Typically, credit bureaus store data on your balances, available credit, payment history, and the number of open and closed accounts you have. Collection agencies and debt collectors may also report to the credit bureaus if you have any delinquent activity.

The rest of the information credit bureaus collect comes from public court records. They access these records in search of any possible bankruptcies, tax liens, repossessions, and foreclosures.

How Do Credit Bureaus Use My Information?

Now that you know how credit bureaus collect your information, you’re probably wondering how they use your information?

Credit bureaus use your information to create credit reports and credit scores. They then share your information with potential lenders, landlords, and employers for a number of reasons. Your credit report may be pulled up in the following scenarios:

  • When a lender is checking your credit to see if you qualify for a loan
  • When a landlord is deciding whether or not to accept your rental application
  • When a new employer needs to run a background check
  • When a utility provider is about to start a service contract with you

Credit bureaus also sell information for marketing purposes. Say a lender is looking for potential customers with poor credit who might need a credit card. The lender will reach out to a credit bureau, which will then sell the lender a prescreening list of qualifying individuals and their basic contact information. (If you’ve ever wondered how you end up with so many preapproved credit cards flooding your mailbox, this is it.)

However, there are rules that protect you and your data — particularly the Fair Credit Reporting Act (FCRA).

The FCRA is a law that states you have the right to know your credit report and the right to dispute any errors on your credit report. It also lays out what is a “permissible purpose” for a lender to pull your credit and what is an “impermissible purpose.”

If a potential lender, landlord, utility provider, future employer, insurer — you name it — wants to view your full credit report, they must have a permissible purpose and your permission first. In some cases, a potential lender will simply let you know that they will do a credit pull, and by following through with the application, you grant them permission to do so. In other cases, a landlord might have you use a tenant screening service like ExperianConnect, where you have to download your credit report and share it with them directly.

If you aren’t comfortable with credit bureaus prescreening your information and sending it to third-party lenders, you can use to prevent this. Continue onto the “What To To Do In Case of Fraud Or Identity Theft” section to learn more ways to protect your credit report and personal information.

Credit Reports VS Credit Scores

Since credit bureaus use your credit history to compile both a credit report and a credit score, it’s important to know the difference between the two.

Credit Report Credit Score

A report prepared by credit bureaus that shows an individual’s credit history, including payment history, loan balances, credit limits, and personal information (such as your social security number, birth date, and address).


A number that indicates an individuals creditworthiness and is based on the individual’s credit history, payment history, and other data compiled by credit bureaus.

On a credit report, you’ll see detailed information about your credit history. A typical credit report will give you a full breakdown of all your open or closed credit accounts, bank accounts, loans, and payment history. Below, you’ll se an example of a credit report and what it might include (this is only page 1 of 4, so you can imagine how detailed your full credit report might be):

The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

A credit score, on the other hand, provides much less detail. You’ll usually be given your credit score in tandem with a graphic indicator of whether your credit score is poor, fair, good, or excellent. You may be able to drill down to see the factors that affect your credit score, and you may not. Here’s an example of a credit score and how it might appear:

The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

Think of it like this: a credit report is a detailed report of what your credit history is, while a credit score is an interpretation of what your credit history means. Your credit score is one of the biggest factors lenders use when considering loan applications; the higher the score, the more likely you are to pay your loan back — at least, in a lender’s eyes.

It’s worth noting one more key difference between credit reports and credit scores. Credit bureaus are legally obligated to give you a free credit report once a year, whereas there is no law requiring them to provide a credit score. This means you’ll have to pay a fee to access your credit score through one of the “big three.” There are free credit score sites if you want to avoid this fee. Check out our post The Best Free Credit Score Sites to learn more.

Note: In certain situations — like unemployment, identity theft, and fraud — you can access your credit report multiple times a year without charge.

How Credit Scores Are Calculated

Credit scores are all based on similar data but can vary significantly depending on the credit score model. Credit scores are generally affected by the following:

  • Your payment history
  • How much credit you use versus how much credit is available in an account
  • The number of accounts you have open
  • How long your accounts have been open
  • The types of credit you have (such as credit cars, loans, mortgages, etc.)

How this information is transformed into a credit score depends on the credit model being used. There are two main types of credit models: FICO scores and VantageScore.

FICO Scores VS VantageScore

The FICO score model was created by Fair Isaac Corporation in 1989 (hence the name FICO). FICO credit scores range from 350 – 850 and are determined by these five factors, which are ranked in terms of importance by percentage:

  • Payment History: 35%
  • Amounts Allowed: 30%
  • Length Of Credit History: 15%
  • New Credit: 10%
  • Credit Mix: 10%

The VantageScore model was created by Equifax, Experian, and TransUnion in 2006. This model also uses a 350-850 scale. Scores are determined by the following six factors that are ranked by level of importance rather than a percentage:

  • Payment History: Extremely influential
  • Percentage Of Credit Limit Used: Highly influential
  • Age & Type Of Credit: Highly influential
  • Total Balances & Debt: Moderately influential
  • Available Credit: Less influential
  • Recent Credit Behavior & Inquiries: Less influential

VantageScore claims that it is “the scoring model that is more accurate.” However, the FICO scoring model is used more predominantly in the lending industry.

Why Is My Credit Score Different With Each Bureau?

It makes sense that your credit score may vary depending on whether the potential lender is using the FICO or VantageScore model. But when the “big three” all use the VantageScore model, why do you get a different credit score from each credit bureau?

Remember earlier when we said that credit institutions aren’t required to share information with the credit bureaus? They can choose to share data with one, two, three, or none of the “big three.” This means that Equifax, Experian, and TransUnion don’t have access to exactly the same data, which accounts for the difference in credit scores.

This is why it’s important to treat your credit score as a “guesstimation” rather than an end-all number. Credit scores are ever-changing and lenders all have their own way of calculating and evaluating your credit score. Check your credit score so you have a general idea of what it is, and try to keep your score as close to 850 as possible, but don’t stress over-much about the exact three-digit number.

Reasons To Use A Credit Bureau

Now that you know what credit bureaus are and how they work, when should you use one? It’s simple: use a credit bureau anytime you want to know or need to know your credit report or credit score. Here are five of the most common scenarios for when you should use a credit bureau.


1. When Applying For A Loan

When applying for a loan, a potential lender is going to consider both your credit report and credit score, so it’s extremely important that you know your credit report and score beforehand. This way, you can correct any errors on your credit report and make sure you meet the lender’s minimum borrower requirements before you apply.

If there are errors, they can take a while to set right. Additionally, if you don’t meet the credit score requirement, raising your credit score can take time. Knowing the state of your credit before applying gives you the time to put your best foot forward and significantly increases your chances of being approved for a loan.

For more tips and tricks about increasing your chances of securing the loan you want, read our post on improving your loan application.

2. Before Renting An Apartment Or House

Potential landlords almost always run a credit report in order to decide if you’re trustworthy enough to make your monthly payments on time. Knowing your credit report beforehand is key. Again, if there are any errors, you can correct them before your future apartment or house is on the line. Or, if there is a missed payment or some other potential red flag on your credit report, you can try to explain the situation to your landlord in advance rather than being flat-out rejected.

3. To Improve Your Credit Score

If you are wanting to monitor and improve your credit score, you need to know your score first. Each of the “big three” allows you to purchase your credit score. They also offer credit monitoring subscriptions that allow you to regularly view your credit score and receive alerts when there are any changes to your credit score.

If you don’t want to pay for a monthly credit monitoring service, check out the best free credit score sites.

4. To Doublecheck For Credit Errors

As we mentioned earlier, you don’t want to be stuck with an error on your credit report right when you’re in the middle of the application approval process for a new loan or mortgage. Check each of the big three credit bureaus for errors as they all collect and maintain different information.

5. To Prevent Fraud & Identity Theft

Another benefit of using a credit bureau is fraud prevention and identity protection. If you stay on top of your credit report, you can pinpoint anything fishy and secure your information. When it comes to fraud and identity theft, the sooner you notice a problem, the better. One of the best parts about using one of the “big three” credit bureaus is that they all offer some form of fraud monitoring and extra security measures (which we will cover in more detail).

Bonus: To Help Run Your Business

As an added bonus, Equifax, Experian, and TransUnion all offer additional business services to help business owners manage, expand, and secure their small businesses. These services include everything from analytics to customer acquisition to risk management to fraud prevention and more.

What To Do If There’s An Error On Your Credit Report

If you find an error on your credit report, you’ll need to report and dispute that error with each individual bureau since each bureau collects and utilizes different information. Each bureau has their own process for disputing. You’ll need to go to their individual sites to find details on how to fix an error on your credit report.

One of the reasons it’s so important to check your credit report regularly is that it can often take months to properly fix an error on your credit report. For more details on common credit report mistakes and how to dispute credit report errors, visit the FICO website.

What To Do In Case Of Fraud Or Identity Theft

The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

When it comes to fraud and identity theft, you don’t want to take any chances. If you suspect fraud related to any of your credit cards, bank accounts, or identity — or if your identity has been stolen — it’s important to take action right away. You can do so by submitting a fraud alert or security freeze (sometimes known as a credit freeze).

Both a fraud alert and security freeze are steps to secure your credit report and personal information, but they differ slightly.

Fraud Alert Security Freeze

A fraud alert warns credit bureaus that there might be fraudulent activity, so potential lenders will need to take extra measure to verify your identity before extending credit.


A security freeze blocks lenders from accessing your credit report at all until the freeze is lifted by you (usually using a pin).

Fraud alerts usually last 90 days (unless you’re an identity theft victim, in which case you can extend the alert). To place a fraud alert, contact Equifax, Experian, or TransUnion and follow their instructions. You only need to contact one of the big three credit bureaus to place a fraud alert as they will notify the other two credit bureaus.

A credit freeze has the advantage of being much more secure. However, you will have to lower the freeze each you time you or a lender need to view your credit report, and you may be required to pay for the service. Unlike a fraud alert, you will have to place a security freeze with each of the three bureaus.

How Do The Big Three Credit Bureaus Compare

Now that you know the basics about credit bureaus and the reasons to use one, how do you know which credit bureau to use? How do the big three compare to each other? And what products do each credit bureau offer? Here’s a basic breakdown that compares Equifax, Experian, and TransUnion. Read on to learn more about each credit bureau.

Equifax Experian TransUnion

Free Annual Credit Report




Credit Score




Credit Monitoring


Starts at $0/mo


Identity Protection




Business Credit Score




Number of Business Services





The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

Best For…

Individuals looking to check their Equifax credit report and score and in need of a free credit lock service.

The oldest of the three credit bureaus, Equifax has been around since 1899. While the company has grown significantly over the years, the Equifax motto to “always focus on its customers” has stayed the same. Today, Equifax offers basic credit report and credit score services as well as several business products. The most notable aspect of Equifax is its free credit lock service that allows individuals to protect their data at no additional cost.

Products Offered

Equifax offers basic credit report and credit score services, as well as a free credit lock service.

  • Credit Report: As with every credit bureau, you can access your free Equifax credit report at
  • Equifax Credit Score: You can purchase an Equifax credit score for $15.95. This score will be accessible for 30 days.
  • Lock & Alert: This free service allows individuals control over their credit report by locking and unlocking the report as needed. They even have a mobile app and send alerts every time your account is unlocked or locked.

Business Services

You can purchase a single business credit report from Equifax for $99 or a multi-pack for $399.95. You can use this to view your own business credit or to ascertain the credit health of a potential business partner, supplier, or new customer.

In addition to business credit reports, Equifax offers 11 products to help you run your small business. These products range from customer acquisition to risk mitigation to credit monitoring to fraud prevention and more. Visit the Equifax website to learn more about their business offerings.


The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

Best For…

Individuals looking to view their Experian credit report or to actively monitor their credit report and credit score from all three credit bureaus.

Equifax began as part of TRW Information Systems and Services INC. back in 1968, and has since had a long history of acquisitions and advancement. Of all three bureaus, Experian offers the most personal products for monitoring and protecting your credit. What really sets Experian apart is that you can monitor your credit report from each of the three bureaus, so you can have all your credit information in one place. Experian also offers a FICO score simulator, which is invaluable for seeing what your FICO score could be if you make changes to your credit.

Products Offered

Experian offers personal credit monitoring and identity protection products as well as loan matching and credit card matching services.

  • Credit Report: As with every credit bureau, you can access your free Experian credit report at
  • Experian Credit Report & Score: You can purchase your Experian credit report and FICO credit score for $19.99. This purchase is only good for a one-time view.
  • 3 Bureau Credit Report & FICO Score: For $39.99, you can view your Experian, Equifax, and TransUnion credit report as well as your FICO credit score. This purchase is only good for a one-time view.
  • Experian CreditWorks Basic: View your Experian credit report for free every month.
  • Experian CreditWorks Premium: For $24.99/month, you can view your FICO score and gain access to Experian’s credit monitoring, identity protection, and credit lock services. This service includes the 3 Bureaus Credit Report. This product lets you view your credit reports and credit score daily, and it includes a FICO score simulator as well.
  • Experian IdentityWorks Plus: Experian’s identity protection service starts at $9.99/month and includes dark web surveillance, identity theft insurance up to $500,000, lost wallet assistance, credit lock, and identity theft monitoring and alerts. Includes credit monitoring for Experian and FICO score alerts. You can add child identity protection as well.
  • Experian IdentityWorks Premium: Experian’s most expensive identity protection service is $19.99/month and includes dark web surveillance, identity theft insurance up to $1,00,000, lost wallet assistance, credit lock, and identity theft monitoring and alerts. Includes credit monitoring for all three credit bureaus and FICO score alerts. You can add child identity protection as well.

Note: For Experian CreditWorks and IdentityWorks products, you can receive a discount for purchasing an annual subscription rather than a monthly subscription.

Business Services

Experian does offer business credit scores, although they aren’t forthcoming about the cost. The credit bureau also offers Experian Connect (a tenant screening service) and Experian Mailing List Builder (a customer acquisition service).

In addition, Experian offers 11 other business services ranging from customer management to risk management to debt recovery to consulting services and more. Visit the Experian website to learn more about their business offerings.

TransUnionThe Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion

Best For…

Individuals looking to check their TransUnion credit report and score and to manage their business and its credit.

TransUnion started back in 1968 as a holding company for a railroad leasing organization known as Union Tank Car Company. Today, TransUnion is the smallest of the three credit bureaus but packs the biggest punch where business services are concerned. TransUnion also offers a credit score simulator — it is a great tool for improving your credit score as you can see how your credit could be affected if you made certain changes to your credit.


TransUnion offers basic credit report and credit score products, as well as a free credit monitoring and identity theft service.

  • Credit Report: As with every credit bureau, you can access your free TransUnion credit report at
  • TrueIdentity: This is TransUnion’s free credit monitoring and identity theft protection service. It includes unlimitedTransUnion credit reports, a credit lock service, and alerts.
  • Credit Monitoring: For $19.99/month, you can have access to unlimited TransUnion credit report and score views, as well as credit lock, credit change alerts, and a score trending and score simulator tool.

Business Services

TransUnion offers business credit scores, although they aren’t forthcoming about the cost. The credit bureau also offers SmartMove, a tenant screening service.

In addition, TransUnion offers business products covering 14 fields, including marketing, fraud detection, healthcare revenue protection, customer acquisition, and more. Visit the TransUnion website to learn more about their business offerings.

Which Credit Bureau Should I Use?

Now that you know a little more about each of the three credit bureaus, the question becomes: Which credit bureau should I use?

The answer is all three of them.

We promise this isn’t a trick answer. Since each credit bureau collects different data regarding your credit history, it’s incredibly important to check your credit report with Equifax, Experian, and TransUnion. Luckily, you are legally guaranteed a free annual credit report from each bureau.

One recommendation is to stagger your annual free credit report. Check your Equifax report, then your Experian report four months later, and then your TransUnion report after another four months. This way you can always have a rough idea of what your credit report looks like without losing a penny. Another option is to use ExperianCreditWorks, which monitors all three credit bureaus and your FICO score for $24.99 a month.

If you simply want more control over your credit report and credit score, Experian offers the most bang for your buck in terms of personal credit monitoring and identity protection. However, TransUnion offers the most business-related products.

Ultimately, choosing which of the three credit bureaus’ monitoring services is right for you will depend on your budget and the level of control you want. The most important thing is to actually monitor your credit regularly. Take advantage of your free annual credit reports and know your credit score at the very least. Being proactive about your credit report can help ensure your credit report is accurate and can help catch any early signs of fraud, and knowing your credit score is the first step to improving your credit score.

Read our post 5 Ways To Improve Your Personal Credit Score and The Ultimate Guide To Improving Your Business Credit Score to learn more.

The post The Complete Guide To Credit Bureaus: Equifax VS Experian VS TransUnion appeared first on Merchant Maverick.


How Strong Is Your Business Loan Application?

How Strong Is Your Business Loan Application?

We all like to know that we are succeeding in our endeavors. It’s easy to tell how successful you are when exercising — just pull out a scale or a measuring tape. It’s equally easy to judge a successful work day by how many items you checked off the good ol’ planner. But when it comes to loan applications, how do you know when you’re ready to submit it?

What if I told you that you could measure how likely your loan application is to be approved before you sent it? While there’s no sure-fire magic secret to ensure your business loan application gets approved, there are ways to tell how strong your application is and how likely lenders are to accept it. In this post, we’ll cover seven ways to measure the strength of your business loan application.

Before sending your loan application, check how it stacks up in these seven areas first…

A Clear Plan

How Strong Is Your Business Loan Application?

Lenders want to know exactly how you plan on using a loan if approved. For this reason, it’s incredibly important to explain in detail how you plan on using the funding to grow your business.

If you ask a lender for $100,000 and don’t give a reason for the loan, there’s no chance you’re getting that money. Instead, provide a specific reason for the funding. For example, you may need $100,000 of new equipment that will increase your company’s productivity, allowing you to take on 100 new clients.

Common reasons for business loans include:

  • Hiring new employees
  • Purchasing inventory
  • Purchasing equipment
  • Expanding your business
  • Buying property

The more detailed you can be on your application the better. Some lending experts even recommend adding a detailed business plan to your application. A business plan will show that you are prepared, organized, and knowledgeable about your business field. When it comes to getting approved for a loan, these extra brownie points could make the difference between securing a loan and being declined.

Double check your loan application to make sure it clearly explains what you need the money for and how your business will benefit from this loan. Also, make sure you are asking for a reasonable amount for your business’s specific purposes. If your business loan application can demonstrate a clear plan, you’re off to a great start.

The 5 C’s Of Credit

How Strong Is Your Business Loan Application?

A strong loan application will highlight the 5 Cs of Credit. But what are the 5 Cs of Credit?

The 5 Cs of Credit are a measurement that lenders use to judge the trustworthiness and creditworthiness of a potential borrower.  If your loan application doesn’t display these traits, then most lenders view you as high-risk and decline your application entirely.

Here is a basic breakdown of the 5 Cs of Credit and what lenders are looking for on your loan application.


Character refers to your business’s reputation. Lenders want to see that you pay your debts on time and are trustworthy.

To judge your company’s character, lenders will often check your credit history, your business credit score, and your personal credit score. They may also try to gauge your personal character through social media, references, or a phone consultation.

A loan application with strong character will have:

  • A good credit score
  • A record of on-time payments
  • Sound references (if required by lender)

If your application doesn’t demonstrate these qualities, read our post 5 Ways To Improve Your Personal Credit Score.


Capacity refers to your business’s ability to pay back the loan. Lenders want to be assured that you have the cash flow to actually afford loan repayments.

To judge your company’s capacity, lenders often view your cash flow statements, bank statements, income, and existing debt.

A loan application with strong capacity will have:

  • Strong cash flow
  • Enough income to cover monthly payments
  • Minimal existing debt


Capital refers to how much money you have invested in your business. Lenders view owner’s capital as a sign that you “invested” in your company’s success and are then more likely to do whatever it takes to make your business succeed (which for lenders means paying back your loans).

To judge your capital, lenders view how much is invested as well as how it has been invested.

A loan application with strong capital will:

  • Show the total owner’s investments
  • Give detail on how those investments have grown the company

We understand that not every business owner has invested personal money into their business. Read our post The 5 Cs of Credit: What Lenders Look For to learn how you can still impress lenders without owner’s capital.


Collateral refers to any assets that are offered up as insurance should you default on the loan. Many lenders require collateral as a safeguard that they won’t lose everything should you be unable to pay your loan.

To judge your company’s collateral, lenders may vary. They may require specific assets or a blanket lien or a personal guarantee.

A loan application with strong collateral will:

  • Understand their specific lender’s collateral requirements
  • Provide the proper collateral
  • Include any paperwork associated with the collateral


Conditions refer to the conditions of the loan as well as those of the current economy. Lenders want to make sure that you can afford a loan.

To judge your company’s conditions, lenders will not only evaluate your loan application but also the details of the loan you are applying for (such as borrowing amount, interest rate, etc.). The economy and your business’s current market can also play a role.

A loan application with strong conditions will:

  • Have enough income to cover monthly payments
  • Demonstrate an understanding of their industry, current market, and competitors

Ultimately, the 5 Cs of Credit are a great way to determine how strong your loan application is. Make sure your loan application highlights your company’s character, capacity, capital, collateral, and conditions. If your business application demonstrates each of there traits, you are well on your way to getting the loan you want.

If you want to tips about how to master the 5 C’s of Credit, read our post The 5 C’s of Credit: What Lenders Look For.

Strong Cash Flow

How Strong Is Your Business Loan Application?

For lenders, it’s all about being certain that you can pay your loan back on time and in full. Your business loan application and the documents you send with it should demonstrate that you have enough cash flow to comfortably make payments.

Almost all lenders will require that you include cash flow statements and projections with your business loan application. Most accounting software will generate cash flow statements for you. A strong loan application will provide this information upfront so that lenders can calculate your debt service coverage ratio (DSCR).

  • Debt Service Coverage Ratio (DSCR): Measures the relationship between your business income and debt and is used to determine how healthy your business’s cash flow is. It also plays a key role in knowing exactly what size monthly payment you can afford on a potential loan.

Before applying for a loan, I recommend calculating your DSCR so you can know exactly what you can afford. You don’t want to go into a spiral of unpayable debt or bankruptcy. Be sure that the borrowing amount you’re asking for and its monthly payments are realistic. A lender will shoot your application down if they aren’t convinced you can pay a loan back.

A loan application that displays weak cash flow or a poor DSCR is not likely to get approved. By calculating your DSCR and evaluating your cash flow ahead of time, you can be sure that you can afford the loan you want before submitting the application.

To learn more about DSCR, read our post Debt Service Coverage Ratio: How To Calculate And Improve Your Business’s DSCR.

Minimal Existing Debt

How Strong Is Your Business Loan Application?

In addition to displaying strong cash flow, business owners seeking a loan should have little-to-no existing debt. A strong loan application is one that shows again and again “I can afford this loan.” If your business already has a large amount of existing debt, it’ll be hard to convince lenders to approve your application.

When lenders look at your application, they will check your existing debt using the DSCR mentioned earlier as well as the debt-to-income ratio (although, the DTI ratio is used more for sole proprietors and freelancers who aren’t considered separate legal entities and don’t have a DSCR).

  • Debt-To-Income (DTI) Ratio: Measures the relationships between your personal debt and income and is used to determine how high-risk you are.

Working to get rid of existing debt also proves to lenders that you pay your debts in full and on time, which increases your credit score and betters your chances of getting approved for a loan. The less debt, the more cash you have available for a loan, and the stronger your application is.

Proper Documents

How Strong Is Your Business Loan Application?

Every lender requires certain documents to be included in a potential borrower’s loan application. Specific documents will vary from lender to lender, so be sure to check your lender’s requirements. Have all of the proper documents prepared beforehand.

Often, these documents include:

  • Cash flow statements
  • Bank statements
  • Income sheet
  • Statement of owner’s equity (or capital)
  • Tax Returns
  • Collateral documentation
  • Legal documents and licenses
  • Business history
  • Business owner’s history

Some lenders may ask for these documents in the loan application itself, while many online lenders require you to submit an initial application and then provide the required documents at a later time. Having these documents ready to go whenever the lender asks for them demonstrates that you are timely and organized.

Taking every opportunity to impress lenders and put your best foot forward can make or break the chance of you getting that loan.

Borrower Requirements

How Strong Is Your Business Loan Application?

No matter how beautifully polished and impressive your loan application is, it’s not going to get you anywhere if you don’t meet the lender’s requirements.

Every lender has specific requirements borrowers must meet in order to qualify for a loan. They often include:

  • A minimum credit score
  • A specific amount of time in business
  • A minimum monthly or yearly income
  • Certain collateral

Be sure to carefully research potential lenders so that you can be certain you meet all of the borrower requirements. If you meet and exceed all of the requirements and have a beautifully polished loan application, you make yourself a strong applicant and increase your chances of being approved for the loan you want.

If you are having trouble finding a loan you qualify for, we can help you find the perfect loan for your business.

No Spelling Or Grammatical Errors

How Strong Is Your Business Loan Application?

You’ve checked that you can afford a loan; you’ve met the borrower requirements; you’ve prepared all the proper documents. That should mean you’ve got the green light and are all clear, right?

Not quite. There’s one key final step.

Before sending off your loan application, double and triple check that there are no typos, spelling error, grammatical errors, or missing information. Maybe even get another set of eyes to read over it. This is an easy step to skip over, but I can’t stress how important it is.

Spelling errors and typos simply make you look unprofessional. Additionally, loan applications require a lot of legal information that you really don’t want to goof up on.

Once you’ve read and edited your finished loan application multiple times, you can be confident that you’ve done everything to make your loan application as strong as possible.

Final Thoughts

Now that you have a better idea of what lenders are looking for, you can more easily measure how strong your application is. After all, the stronger your application, the strong your chance of getting that loan.

Before you send off your application for good, be sure to ask yourself these questions regarding your loan application:

  • Do I demonstrate a clear plan for the loan?
  • Do I display the 5 Cs of Credit?
  • Do I have enough cash flow for monthly payments?
  • Did I eliminate most or all of my existing business debt?
  • Are the required documents included (or at least prepared)?
  • Do I meet or exceed the borrower requirements?
  • Did I edit everything correctly?

If your application is strong, great! You can go ahead and send it off with confidence. If your application seems weak, you can save yourself the heartache and time and avoid being denied. Instead, take the time to strengthen your application and better your chances of getting approved.

For more information on how to improve your loan application, read our post 20 Tips To Improve Your Business Loan Application.

The post How Strong Is Your Business Loan Application? appeared first on Merchant Maverick.


20 Tips To Improve Your Business Loan Application

Improve Business Loan Application

The loan application process can seem overwhelming at times. But keep in mind that all lenders want to know is that you can pay back the loan. Your application is the perfect place to prove that you can and will repay your loans successfully. Filling out a loan application is about being prepared and putting your best foot forward. It’s important to “sell” lenders by convincing them that your business is reliable, profitable, and going places. According to Entrepreneur, potential borrowers should:

Think of your loan application as a sales tool, just like your brochures or ads. When you put together the right combination of facts and figure, your application will sell your lender on the short- and long-term profit potential of lending money to your business.

Easier said than done, right?

We’ve put together a comprehensive list of the best tips, tricks, and practices for improving your business loan application. By knowing how to optimize your loan application, you can improve your chances of getting the loan you want. Here are 20 practical tips for nailing the loan application process and increasing your chances of securing a small business loan.

1. Have A Plan

Lenders want you to demonstrate that you have a clear purpose and an actionable plan for your business loan. If you simply say you need $50,000 without giving a reason, most lenders will shoot you down right then and there. Instead, be as specific as possible about your plans for the loan. Explain that you need $50,000 to purchase a new piece of equipment that will double your production efficiency, for example.

Here are some common reasons that small businesses give when they apply for additional funding:

  • Business expansion
  • Purchasing inventory
  • Updating equipment
  • Hiring or training new employees
  • Increasing cash flow

In short, when filling out your loan application, be sure to give a reason why you need the loan and discuss how the loan will benefit your business in detail.

2. Choose A Realistic Borrowing Amount

For your application to be successful, it’s vital to be realistic about how much cash your business needs. Don’t ask for too much, and don’t underestimate expenses or costs and ask for too little.

Don’t guess, in other words. Sit down and crunch the numbers. If you need a loan to purchase new equipment for your business, research exactly how much that equipment costs, including tax, shipping and handling, implementation, and/or any training required to use it.

Lenders want to work with realistic, responsible borrowers who know, to the cent, how much money they need to achieve their goals and grow their business.

3. Calculate Your Monthly Payments

A lender’s biggest question is always “can you pay back the loan?” If you can’t satisfactorily prove that you can repay the loan, you’re out of luck.

Lenders evaluate whether you can afford monthly loan repayments by using the debt service coverage ratio and the debt-to-income ratio. Both ratios are used to determine how risky your business is and if you can afford to pay back the loan or not.

  • Debt Service Coverage Ratio (DSCR): Measures the relationship between your business’s income and debt. Since the DSCR measures how much excess cash your business has after meeting its financial obligations, the higher your DSCR, the better. A DSCR of 1.25 or higher indicates that you have enough cash flow to run your business, while still having money left over to take on new debt.
  • Debt-To-Income Ratio (DTI): Measures the relationship between your personal income and debt as the business owner. Since the DTI indicates how much of your income is designated to debt, the lower the DTI, the better. A DTI ratio of 36% or lower is ideal as it shows that you can afford to comfortably take on loan repayments.

Note: Most lenders rely predominantly on the debt service coverage ratio to judge small business loan eligibility. However, sole proprietors and freelancers are not separate legal entities, so lenders will use your DTI to determine your creditworthiness.

These ratios provide a good indication that you can (or can’t) take on more debt. Before turning in your loan application, calculate your own DSCR and DTI scores. Making sure your DSCR and DTI ratios are ideal will increase your chances of impressing a lender. You can also use these ratios to find out exactly how much you can afford to repay each month, which can help you be realistic about your borrowing amount.

Read our posts Debt Service Coverage Ratio: How To Calculate And Improve Your Business’s DSCR and Debt-To-Income Ratio: How To Calculate And Lower Your DTI to learn more.

4. Find The Right Type Of Loan

All loans are not created equal. To improve your chances of securing a loan, make sure you’re applying for the right kind of funding for your business.

Here are the most common types of business loans:

  • Installment Loan: An installment loan, or term loan, is issued in one lump sum and paid back in regular intervals or installments, plus interest.
  • Short-Term Loan: A short-term loan is issued in a lump sum and paid back in regular intervals over a short period of time. Instead of earning interest, short-term loans have a fixed fee that is added to the repayment amount.
  • Line of Credit: With a line of credit, a lender grants you a certain amount of money that you can draw from as needed.
  • Merchant Cash Advance: While not technically a loan, a merchant cash advance is a type of financing in which businesses sell their future receivables for immediate cash.
  • Invoice Factoring: While not technically a loan, invoice financing is the practice of selling unpaid invoices at a discount in return for immediate cash.

Carefully choose which small business lending method is right for you. Don’t waste your time filling out applications for loans that aren’t suited for your business. Improve your chances of getting approved by applying for the right type of loan.

To learn more about the pros and cons of each loan and to decide which is right for you, download our free Beginner’s Guide To Small Business Loans.

5. Find The Right Lender

Finding the right lender can make or break your chances of being approved for a business loan. Each lender offers different types of loans and has different borrower requirements. Some only lend to established businesses, while others lend to startups. Some only work with businesses that have good credit, while others care more about your annual income. You get the picture.

Carefully researching each lender and their requirements can help you know if you qualify for a loan before putting in all the effort of completing an application.

If you aren’t sure which lender is right for you, check out our small business loan comparison chart or read through our selection of small business loan reviews.

6. Understand The Loan Process

Lenders want to work with responsible, experienced borrowers. Increase their trust in you by having a good understanding of how loans work. Not only does this show that you know what you’re doing, it makes the application process go more smoothly. According to Forbes:

The more educated you are about small business lending options and procedures, the more likely you will be successful in obtaining a loan.

If you’re asking a lender what an interest rate is or to explain the difference between a term loan and a line of credit, it’s time to go back to the basics. But don’t worry, we’ve got you covered with our Beginner’s Guide To Small Business Loans.

7. Have A Strong Business Credit Score

Another key to a strong loan application is having a healthy credit score. Lenders use credit scores to determine that your business is trustworthy and able to pay its loans on time. Having strong credit will not only increase your chances of being approved for a loan, it can also qualify you for better loans with more favorable terms and rates.

Read our Ultimate Guide To Improving Your Business Credit Score to make your credit score — and loan application — even stronger.

8. Don’t Forget Your Personal Credit Score

Lenders don’t just look at your business credit score; they also look at your personal credit score when applying for a loan. Lenders want to establish your character as a borrower to see if you are trustworthy and pay your debts on time. This is especially true if you are required to sign a personal guarantee.

Improve your loan application by having great business and personal credit scores. Improving your personal credit may take some time, but will be more than worth it when applying for a loan. Read our post 5 Ways To Improve Your Personal Credit Score to master your credit score and wow potential lenders.

9. Know What’s On Your Credit Report

When applying for a loan, be sure to know your credit report forward and backward. Lenders will look at your credit report to evaluate your credit history before approving you for a loan. If you know there’s negative activity on your report, explain it to your lender in your application. This may not always make up for the poor credit report, but it might make lenders understand your situation better.

10. Pay Off Existing Debt First

We know you’re probably foaming at the bit to get business funding, but paying off existing debt before applying for a loan could be the key to securing a loan in some situations.

If you already have substantial debt, a lender is far less likely to approve your loan application for fear that you won’t be able to keep up with the repayments. Not only will paying off existing debt show lenders that you mean business and have a good credit history, it will also increase your debt service coverage ratio and lower your debt-in-income ratio, leaving you with more cash to use on a new loan.

11. Increase Your DSCR

Paying off your existing debt isn’t the only way to increase your debt service coverage ratio. If you want to increase your DSCR and show lenders that you have plenty of cash to afford a loan, here are some additional tips:

  • Increase your net operating income
  • Decrease your net operating expenses
  • Decrease your borrowing amount

Finding ways to cut back on operating expenses and increase your sales income will boost your DSCR. In some cases, your DSCR may not need a boost. If your operating income and expenses are already optimized, or if you don’t have time to implement changes before applying for a loan, consider decreasing your desired borrowing amount. Maybe you can’t afford payments on the $100,000 loan you need to replace the entire company’s computer systems, but you can afford payments on a $50,000 loan to replace the equipment for your executives and sales team. Lenders will only approve loan applications for loans when they know that you can afford the payments.

12. Offer Up Collateral

Many lenders have specific collateral requirements. If you don’t have the assets to meet those requirements, you’re much less likely to have your loan application approved. Be sure to carefully research your lender’s borrower requirements to see exactly what collateral they require. Some may require specific assets, while others may simply require a blanket lien or personal guarantee. Be sure that your business can meet these requirements and feels comfortable in doing so.

Once you’ve decided on what collateral your business can offer up, prepare a document outlining each asset offered. Include this in your business loan application to show lenders that you take your business seriously and have something to lose if you default on the loan. Lenders aren’t evil monsters, lying in wait for you to default so they can steal your assets — they just need an assurance that they won’t lose all of their money if you can’t repay your loan. The hope is that you will be more likely to pay your loan back with your collateral at stake.

To learn more about collateral, check out these resources:

  • Secured Vs. Unsecured Business Loans
  • Should I Sign A Personal Guarantee?
  • What Is A UCC Blanket Lien?

13. Prepare The Proper Documents

To complete your loan application, lenders require certain documents to verify your business’s financial history and validity. The documents required vary by lender, but here’s an idea of types of things they might ask for:

  • Cash flow statements
  • Bank statements
  • Income sheet
  • Profit & loss report
  • Statement of owner’s equity
  • Tax returns
  • Collateral documentation
  • Business licenses and registrations
  • Articles of incorporation
  • Commercial licenses
  • Franchise agreements
  • Business history and business owners’ history
  • Owners’ resumes or background

Your lender may not require all of these, but having the above documents prepared before applying for your loan can help the application process proceed more quickly. Gathering these documents ahead of time can also help you have a better understanding of your business’s financial state — always good information to have before seeking business funding!

14. Create A Cash Flow Projection

Lenders don’t just analyze your business’s financial past; they also want to see that you have a promising future. One of the best ways to promote faith in your business’s future is to add a cash flow projection to your loan application.

A cash flow projection, or cash flow forecast, is an estimation of your business’s future operating income and expenses. The best way to create a cash flow projection is to realistically predict your future expenses and sales. Use your past cash flow statements as a jumping-off point so you aren’t just winging it.

To learn more about how creating a cash flow projection can benefit your business, read our article How To Calculate And Analyze Business Cash Flow.

15. Use Accounting Software

Before applying for a loan, you need to have a solid understanding of your business’s financial state and a firm grasp on managing cash flow. One of the best ways to achieve this is by using accounting software. Accounting software will track your income and expenses so you can know exactly how much you’re spending and how much is left to use on a loan.

In addition, accounting software can help you run the reports required by lenders, such as the income statement, profit and loss, and cash flow statements. If you need help finding the perfect accounting software for your business, check out our comprehensive accounting software reviews and compare our top favorite accounting software programs.

16. Create A Business Plan

While not always required by lenders, a business plan can earn you a gold star and shows a lender that you are organized, prepared, and responsible. A strong business plan also allows you to further demonstrate why you need a business loan and exactly how it will benefit your business.

Additionally, a business plan lets you present realistic repayment plans, which assures lenders that you have thought of a strategy for repaying your loan. Many business loan specialists recommend making a repayment plan as well as multiple backup plans, just in case.

17. Be Professional

This should go without saying, but here’s a friendly PSA: Being professional in all of your communications with a potential lender is incredibly important. Whether you’re interacting in person, over the phone, online, or through your loan application itself, be sure to put your best foot forward. This is the difference between being a C student and an A student, which in the business world equates to getting a loan or not getting a loan.

As we mentioned earlier, lenders care about character. Show a potential lender that you are professional, kind, and put together. Always spellcheck your work and ensure that every section of your application is filled out properly. Have all of the required documents ready for when your lender needs them.

And, don’t forget that honesty is one of the most important aspects of a strong character. It’s easy to fib to try and make your business’s situation sound better, but this will only hurt you in the end. Lenders aren’t stupid. They can tell if you’re lying and can easily see when the financial statements don’t add up. Don’t ruin your chance of getting approved for a loan. Instead, be honest and trust that your character and business expertise are enough.

18. Wait Until The Market Is Good

This may seem backward, but don’t wait until you are in dire need of money to try to get a line of credit. Apply for a line of credit when the economy is booming and your business is successful. This way, when you do need to draw on a line of credit, you’ll already have the funds available.

You are much more likely to be approved for a loan if your business is healthy and has excess cash flow — and you’re more likely to get favorable rates and better terms to boot.

19. Don’t Ignore Social Media

For many lenders, it isn’t all about the money. They also want to know that you and your business have a good reputation. For this reason, many lenders review your business’s social media platforms and sites like Yelp before approving your loan. If they like what they see — good customer service, positive reviews, an effort to respond to and correct poor reviews — they can trust that your business has good character. If they see any red flags, they may decline your application altogether.

Treat others like you want to be treated using your social media, and lenders may be that much more likely to “treat you” to a business loan.

20. Seek Extra Help

What Information to Bring Accountant for Small Business Taxes

If you are still worried about your loan application or want a second opinion, you can always seek professional assistance. Organizations like SBDC and SCORE are designed specifically to offer small business advice; your local chapter may be able to assist you in bettering your loan application. You can also have an accountant view your loan application and financial documents. They can help make sure everything is in order and raise any potential red flags that lenders would be concerned about.

Note: Some lenders actually require you to have your loan application reviewed or audited by an accountant. Make sure you know your lender’s policy before submitting your loan application.

Final Thoughts

We’ve covered twenty practical steps you can take to improve your business’s loan application. Now, when you finally send in your application, you can rely on more than crossing your fingers. Don’t guess or trust to luck. By optimizing your loan application and knowing exactly what lenders are looking for, you significantly increase your chances of getting approved.

If you are still looking for the right lender, check out our top-rated lenders. Best of luck!

The post 20 Tips To Improve Your Business Loan Application appeared first on Merchant Maverick.


The 8 Best Places To Order Business Checks Online

Best Place To Buy Business Checks

When running a business, every penny counts. One of the best ways to keep your expenses in check is to reconsider where you’re ordering your checks from.

Those of you who are still ordering your business checks directly from your bank may be seriously overpaying. If you want to order business checks cheap, there are tons of reputable, online check ordering services that allow you to get more bang from your buck and refill your check supply without ever leaving the office.

But with so many online check suppliers, how do you know which is best? And more importantly, how do you know which you can trust with your sensitive bank information?

Well, that’s what we’re here to tell you. We’ve spent hours researching and comparing the most popular check suppliers to bring you the best of the best. We chose the top eight places to order business checks based on affordability, reliability, customizability, compatibility, and security. Compare each supplier below and read on for more specific about each company’s offerings.

1. CostcoBest Place To Buy Business Checks

You may love Costco for its bulk groceries and $1.50 hot dogs, but did you know that Costco can also be a great choice for business checks? Of all the check suppliers on this list, none can even come close to Costco’s cheap bulk check pricing. Costco’s computer checks are compatible with 35 different accounting and payroll software solutions and come with basic check customizations. The only problem is that you have to be a Costco member to take advantage of these great deals.

Products Offered

  • Standard business checks
  • Payroll checks
  • Computer checks
  • High-security checks
  • Invoice checks
  • Proprietor checks
  • Personal checks

Costco also offers business check accessories such as address labels, tax forms, ink stamps, envelopes, and more.


Costco has compelling bulk pricing for Costco members, and Gold Star Executive or Business Executive Members can receive an even bigger discount on their purchases. Prices vary based on quantity and whether you choose single or duplicate checks. Here is a basic overview of Costco’s checks pricing for regular Costco members:

  • Standard Business Checks: Start at $26.38 for 600 checks.
  • Payroll Checks: Start at $29.38 for 600 checks.
  • High-Security Checks: Start at $80.54 for 600 checks.

For computer checks, price varies based on your accounting or payroll software, but to give you a general idea, Costco’s QuickBooks Multi-Purpose Checks start at $45.55 for 500.

There is an extra fee for adding a custom logo to your checks as well as a standard shipping and handling charge.


Costco is not particularly communicative about their check’s security measures. However, their high-security checks have several counterfeit safeguards such as a foil hologram bar and heat reactive ink. You can contact Costco by phone or email to learn more.


By far, Costco gives business owners the most bang for their buck where checks are concerned. If your business uses a large number of checks, Costco is a cost-effective option.

2. Checks SuperstoreBest Place To Buy Business Checks

Checks Superstore offers one of the biggest selections of business checks available. Top that with strong security features and tons of check customizations options and it’s easy to see why this online check supplier is one of the top picks for small businesses.

Products Offered

  • Standard business checks
  • Payroll/voucher checks
  • Computer checks
  • High-security checks
  • Desk checks
  • Wallet checks
  • Personal checks

Checks Superstore also offers business check accessories such as envelopes, checkbook covers, binders, custom ink stamps, and more.


Checks Superstore offers a wide array of checks with affordable pricing. Prices vary based on quantity and whether you choose single or duplicate checks. Checks Superstore often runs promotions, so be sure to take advantage of any deals when ordering. Here is a basic overview of Checks Superstore’s prices:

  • Standard Business Checks: Start at $28.99 for 252 checks.
  • Payroll Checks: Start at $26.99 for 252 checks.
  • Computer Checks: Start at $36.99 for 250 checks.
  • High-Security Checks: Start at $72.99 for 252 checks.

There are extra charges for customizing your check’s font, signature line message, and logo. A standard shipping and handling charge also applies.


With up to 27 security features, Checks Superstore has some of the strongest security measures available. Some of these features include holographic foil, fluorescent fibers, watermarks, and heat sensitive ink. You can contact Checks Superstore via phone, email, live chat, contact form, fax, or read their FAQs to learn more.


With affordable prices, strong security, and great customization options, Checks Superstore covers all of the basics and then some. The company’s wide selection of checks and impressive customer support make it a compelling option. The only potential drawback is that Checks Superstore’s computer checks are only compatible with three software programs: QuickBooks, Quicken, and Microsoft Money.

3. Check AdvantageBest Place To Buy Business Checks

Check Advantage is an affordable online check supplier. This company offers one of the best deals on computer checks and has good customization options. With decent security options and customer support resources, it could definitely be to your, er, advantage to order business checks online from Check Advantage.

Products Offered

  • Standard business checks
  • Payroll/voucher checks
  • Computer checks
  • Desk checks
  • Personal checks

Check Advantage also offers business check accessories such as checkbook covers, check registers, envelopes, labels, binders, and more.


Check Advantage is one of our picks for “best business check supplier” because their checks are so affordable. Check Advantage also offers business check kits that can save you a bit of money when ordering multiple types of checks and check accessories. Prices vary based on quantity and whether you choose single or duplicate checks. Here’s a basic breakdown of Check Advantage’s pricing:

  • Standard Business Checks: Start at $33.65 for 300 checks.
  • Payroll Checks: Start at $33.65 for 300 checks.
  • Laser Checks: Start at $19.45 for 100 checks.

There is an extra fee for adding a custom font or logo and standard shipping and handling rates apply. You can also purchase EZShield Plus for additional check security.


Each Check Advantage checks come with six built-in security features including microprinting, invisible fluorescent fibers, a heat sensitive icon, and more. While Check Advantage does not offer high-security checks, you can purchase EZShield Plus protection for added check security. Check Advantage also partners with McAfee and VeriSign for their security measures. You can contact Check Advantage by phone, email, live chat, contact form, or fax to learn more.


For small businesses in need of computer checks, you’ll be hardpressed to find a better deal than Check Advantage. Check Advantage’s computer checks are compatible with five different software programs, but the company also promises to “match any laser format free of charge.” While other online suppliers take the cake for high-security checks, small businesses requiring computer checks need to look no further.

4. QuickBooksBest Place To Buy Business Checks

You may know Intuit QuickBooks for its accounting software, but did you know that you can purchase business checks and accessories from Intuit as well? While QuickBooks checks are a bit more expensive than those of other online check sellers, Intuit boasts the most security features. You don’t have to be a QuickBooks Online or Pro user to purchase checks from Intuit, but QuickBooks users can rest assured knowing these checks are specifically designed with QuickBooks software in mind.

Products Offered

  • Standard business checks
  • Voucher checks
  • Computer checks
  • High-security checks
  • Wallet checks
  • Office and away checks
  • Personal checks

Intuit also offers business checks accessories and office supplies such as deposit slips, tax forms, envelopes, labels, ink stamps, high-security pens, and more.


While Intuit checks are on the spendier spectrum of business checks, the company often runs promotions. Prices vary by quantity, security level, and whether you choose single, duplicate, or triplicate checks. Here’s a basic overview of QuickBooks business checks’ prices:

  • Standard Business Checks: Start at $58.99 for 300 checks.
  • Voucher Checks: Start at $36.99 for 50 checks.
  • Computer Checks: Start at $102.99 for 250 checks.
  • High-Security Checks: Start at $61.99 for 50 checks.

Intuit charges a fairly hefty extra fee for adding a logo and a standard shipping and handling fee.


Intuit offers three different security levels: Basic, Secure Plus, and Secure Premier. The highest level offers 29 built-in security features including watermarks, heat sensitive icons, a security hologram, and an exclusive security coating that protects against tampering, counterfeiting, and photocopying. You can contact Intuit’s check support via phone, live chat, email, or read the support FAQs to learn more.


While not the most affordable option on this list, Intuit QuickBooks offers the best check security features. For QuickBooks users seeking peace of mind or who don’t print many checks, Intuit could be a good option for ordering business checks and supplies.

Order Checks, Tax Forms & Other Supplies From QuickBooks

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5. Carousel ChecksBest Place To Buy Business Checks

While ordering checks may not be as fun as riding a carousel, Carousel Checks does their best to make the experience easy and enjoyable. With great check customizations, affordable prices, and the highest number of compatible software programs, Carousel Checks is definitely worth looking into.

Products Offered

  • Standard business checks
  • Payroll checks
  • Computer checks
  • High-security checks
  • Desk checks
  • Wallet checks
  • Invoice checks
  • Personal checks

Carousel Checks also offers business checks accessories such as checkbook covers, check registers, address labels, envelopes, ink stamps, and even calendars.


Carousel Checks are affordable to begin with, but the more checks you purchase, the more you save. Prices vary based on quantity and whether you choose single or duplicate checks. Here is a basic overview of Carousel Checks’ pricing:

  • Standard Business Checks: Start at $31.99 for 300 checks.
  • Payroll Checks: $31.99 for 300 checks.
  • Computer Checks: Start at $19.99 for 50 checks.
  • High-Security Checks: Start at $27.99 for 50 checks.

You can add customizations such as check styles and logos for no extra charge. However, standard shipping and handling fees apply and security features cost extra.


With Carousel Checks, you can purchase EZShield security for an additional cost. Contact Carousel Checks by phone, contact form, or fax to learn more.


Besides competitive pricing, one of the biggest perks of carousel checks is the number of compatible software programs. With over 70 compatible software programs, Carousel Checks is a great option for nearly any small business looking for computer checks. Security does cost extra, but this service still may be worth it for some small businesses.

6. Checks In The MailBest Place To Buy Business Checks

Checks In The Mail is an online check supplier that sets itself apart by offering over 200 check styles. In terms of check customizations, no other supplier on this list even comes close. Add strong security features and custom check formatting to the mix and it’s easy to see why Checks In The Mail is a contender for your small business check needs.

Products Offered

  • Standard business checks
  • Payroll/voucher checks
  • Computer checks
  • High-security checks
  • Desk checks
  • Wallet checks
  • Office and away checks
  • Personal checks

Checks In The Mail also offers tax forms, deposit slips, ink stamps, envelopes, binders, and other business check accessories.


Checks In The Mail’s prices are a bit steep next to their competitors, but the company does offer check value kits and occasional promotion codes that can help save you some money. Prices vary based on quantity and whether you choose single or duplicate checks. Here’s an idea of what to expect from Checks In The Mail’s pricing:

  • Standard Business Checks: Start at $53.99 for 252 checks.
  • Payroll Checks: Start at $39.99 for 252 checks.
  • Computer Checks: Start at $49.99 for 250 checks.
  • High-Security Checks: Start at $53.99 for 252 checks.

Standard shipping and handling rates apply. You can also opt to add Fraud Armor protection to your checks for an extra $0.04 per check.


Checks In The Mail offers 15 built-in security features including invisible fluorescent fibers, microprinting, a foil hologram, chemical reactive paper, a patented security weave, and more. You can also add Fraud Armor to your checks for an added layer of protection. Contact Checks In The Mail by email, phone, or fax for more information.


Checks In The Mail is ideal for small businesses looking for a high degree of customizability and strong security when they order checks online. The company only supports three compatible software programs for their computer checks, but Checks In The Mail will create a custom check format for you if you use a different software. While the prices are a little steeper than the other suppliers on this list, small businesses looking for strong customizations may find the price more than worth it.

7. Checks UnlimitedBest Place To Buy Business Checks

Checks Unlimited is your average, run of the mill online check supplier that makes its mark in the industry by offering a 100% satisfaction guarantee. It is ostensibly part of the America Mail Order Check Association (AMOCA), which “guarantee that the checks they manufacture meet or exceed the standards set by the Amercian National Standards Institute Committee,” according to Checks Unlimited. Information about the AMOCA online is scarce at best, so take that with a grain of salt.

The company offers average prices, decent customizations, and computer checks compatible with 10 different software programs.

Products Offered

  • Standard business checks
  • Payroll/voucher checks
  • Computer checks
  • High-security checks
  • Desk checks
  • Personal checks

Checks Unlimited also offers address labels, envelopes, ink stamps, check registers, and other business check accessories.


Checks Unlimited falls in the mid-range of online check supplier pricing. The company does offer discounts for ordering checks in bulk. Prices vary based on quantity and whether you choose single or duplicate checks. Here is a basic breakdown of Checks Unlimited’s prices:

  • Standard Business Checks: Start at $43.12 for 300 checks.
  • Payroll Checks: Start at $43.12 for 300 checks.

For computer checks, prices vary depending on your accounting or payroll software, but to give you a general idea, Checks Unlimited’s QuickBooks Voucher Checks start at $83.80 for 500 checks.

Checks Unlimited offers free shipping, although you can pay a shipping and handling fee to expedite the process.


Checks Unlimited does not offer high-security checks. Each of their checks comes with only four built-in security features, although you can add EZShield Pro security for an additional cost.


Reliability is the name of the game when it comes to Checks Unlimited. The thing that sets this supplier apart is that it’s the only program on this list that comes with a 100% satisfaction guarantee. Checks Unlimited may be perfect for small businesses that don’t mind paying a little extra for quality, reliable service.

8. StaplesBest Place To Buy Business Checks

Living up to its slogan, Staples’ online business check ordering service will have you saying “that was easy” in no time. Although their checks are on the spendier end of the spectrum, Staples offers great customizations as well as a “design your own check” option. Their computer checks are compatible with over 45 different software programs.

Products Offered

  • Standard business checks
  • Payroll/voucher checks
  • Computer checks
  • High-security checks
  • Desk checks
  • Office and away checks
  • Personal checks

Staples also offers a huge array of business and office supplies as well as business check accessories.


Staples business checks are a bit spendy compared to some other the competitors on this list. However, Staples rewards members may qualify for free shipping which can help offset the cost. Prices vary based on quantity and whether you choose single or duplicate checks. Here’s an idea of what you can expect to pay with Staple’s business checks:

  • Standard Business Checks: Start at $53.99 for 250 checks.
  • Payroll Checks: Start at $53.99 for 250 checks.
  • Computer Checks: Start at $54.99 for 150 checks.
  • High-Security Checks: Start at $68.99 for 150 checks.

You can add a custom logo or check color for an additional cost.


All checks come with six built-in security features including chemically sensitive paper, microprinting, invisible fluorescent fibers, and more. High-security checks add additional security features. Contact Staples via phone, live chat, support, form, or read their FAQs for more information.


While Staples may be one of the more expensive check options on this list, there is a comfort and reliability in ordering checks from a well-known, reliable company. Staples checks are ideal for small business owners who may be wary of other online suppliers or want the option to create their own custom checks.

Which Online Business Check Supplier Is Right For Me?

With eight great options to choose from, it can be a bit overwhelming to choose the best place to order business checks. Carefully consider which features and qualities are most important to you about a check company, whether that be price, security, customizations, customer support, reliability, etc. Knowing your priorities can help illuminate which business check company is best for you.

To help choose the perfect check supplier, ask yourself these five questions before you order business checks online:

  1. What’s my budget?
  2. What type of business checks do I need?
  3. Does the check supplier work with my accounting or payroll software?
  4. How important are check customization options? Security?
  5. How many checks will I realistically use?

Asking these questions can not only help narrow down your choices but also ensure you get the perfect checks for your business needs. Before ordering business checks, look to see if the company is running any promotions or offering any discounts for ordering checks in bulk.

While we heavily researched each of these eight check companies to bring you secure, reliable online check ordering options, be sure to do your own research and carefully compare all of your options before committing to any online purchases. This way, you can be sure you are getting the best deal and the most bang for your buck.

The post The 8 Best Places To Order Business Checks Online appeared first on Merchant Maverick.