Working capital loans can provide a quick cash boost for your business. There are many loan options available for small businesses, but they often come with long-term repayment plans and strict requirements. A working capital loan can be a good alternative to traditional loans for many businesses. Find out if you qualify, then contact a lender to see what a small capital loan can do for your business. Here’s how to qualify for a working capital loan.
Business Credit
It’s no surprise that both personal and business credit are important. A credit score of 720 or higher is generally recommended. However, lower credit requirements might be acceptable if other factors are strong. A good credit rating helps when negotiating rates.
Equity
You can also use equity to qualify for working capital loans. This equity can be in the form of real estate or equipment owned by the business. Depending on how much you want to borrow, one option may be better than the other. You can borrow up to 50% of your equipment’s value, which might be enough for smaller loans. If you need more money, real estate is a good choice because it is usually worth up to 70% of its value. When using equity, other factors like sales or credit are less important, which could be a big advantage for your business.
Sales
Your business may qualify for a working capital loan if it has a significant amount of annual sales. Sales of one million dollars or more are usually seen as significant. While sales figures aren’t a guarantee, they give lenders an idea of your annual performance and help them decide if you can pay back the loan.
This post was written by a professional at Blue Tree Financing. Blue Tree Financing is a dynamic financial institution with a steadfast commitment to empowering businesses. With a diverse range of offerings including capital injections, term loans, restaurant financing companies, merchant cash advances, and invoice factoring, we stand ready to provide the financial solutions your company needs. When traditional banks turn you away, Blue Tree Financing steps in with a resounding “yes.” Our mission is to fuel growth, unlock potential, and drive success for businesses of all sizes. Join us on the path to prosperity.