Fluency in Financing

Business Loans

The Business Loan is one of the most common types of business loans due to its straightforward nature. Businesses can borrow a sum of money that they repay within a set term by making monthly payments plus interest. This type of repayment structure is simple to understand and does not overburden the borrower’s cashflow.

What are Business Loans?

When someone talks about a “business loan”, they are usually talking about a Business Loan. Term loans are one of the most basic forms of business loan, and they offer some of the best rates and terms available on the market. Borrowers receive a sum of money from a business lender like Crown Funding Source, which they repay with regularly scheduled payments over a set period known as the loan’s “term."

The amount of money that a business borrows is called the “principle” ​and can range from $5,000 to $5 million. The borrower is also assigned an interest rate which determines the total cost of the loan and what amount the monthly payments will be. Interest rates are available starting at 5%.

Term Loans offer businesses access to high borrowing amounts and some of the best rates and terms available, but the eligibility requirements can be restrictive.

  • Rates: Starting at 5%
  • Funding Amount: $10K - $5M
  • Funding Term: 3 Months - 10 Years
  • Speed: 1 - 3 Business Days

How Do Business Loans Work?

All Business Loans feature regularly scheduled payments, a set term, and interest. There are different kinds of interest that can impact the way a loan is repaid. Variable interest rates will fluctuate overtime, usually tracking the WSJ Prime Rate. Your interest rate determines what percentage of your fixed monthly payment will go towards paying off the principle versus paying interest. Fixed interest rates remain the same over the course of the loan and are often preferred by businesses.

The kind of interest rate you are assigned will also influence whether it makes sense for you to pay off the loan before the end of the term. Doing this in some cases will save you money on interest, but there may also be prepayment penalties.

A Business Loan is a great tool for growth and can be used to fund expansion through investments in capital assets like equipment or inventory. Business Loans can also be used as working capital for businesses struggling to meet payroll obligations or pay bills. Another use might be to consolidate higher interest debt and pay a lower amount and overall rate over an extended period. A use of the funds that generates revenue will be more likely to receive approval.

Example of a Business Loan:

Your retail business is short the $80,000 it needs to purchase a large inventory order that will meet the demands of your expanding customer base. You apply for a Business Loan with Crown Funding Source and your requested borrowing amount is approved. Your terms are set at 8 years with a 6% fixed interest rate and monthly payments of $1,051.31. This allows you to spread out the cost of your purchase over 96 months, with an additional expense of $20,926.30 in interest.

What Are The Benefits of Business Loans?

Business Loans offer better rates and terms than most other financing products. They carry some of the highest borrowing amounts for qualifying businesses.

Business owners love how simple and straightforward the repayment structure can be for Business Loans. The regularly scheduled payments are predictable and can be easily budgeted for. The familiarity of this product is ubiquitous, so businesses won’t need to waste time researching other lesser known options.

Crown Funding Source has very clear eligibility requirements for ​Business Loans. Qualifying businesses need to have credit scores above 550, have been in business at least 1 year, and strong financials. Other products often carry less defined criteria that can be hard to gauge eligibility for.

What Are The Downsides of Business Loans?

It is common for businesses seeking loans to have poor credit, and this will usually prevent them from qualifying for a Business Loan. The Business Loan puts a heavy emphasis on a borrower’s credit score, so even a strong financial record might not help. Crown Funding Source offers other solutions that are more accessible to businesses with poor credit.

Business Loans do often carry the best rates and terms, but these are mostly assigned to the highest preforming businesses who have excellent credit. Your business might meet the eligibility requirements for this loan, but your rates and terms may not be as favorable as you would like.

Business Loans are usually approved when the applicant plans to spend the loan proceeds on income generating investments. If your business is struggling and needs the funding to survive, approval chances are less likely.

Who Qualifies for Business Loans?

Approved businesses generally met the following criteria:

  • Annual Revenue: $75K+
  • Credit Score: 550+
  • Time In business: 6 Months+

How To Apply

Our application process is fast and easy, taking just a few minutes to complete, and funds can appear in your bank account in as few as 1-2 business days from approval. Here is how to apply:

Step 1: Contemplate Your Needs

Before you apply, make sure that the funding program is the right solution for your business's needs. Consider whether you will be able to use the funds for your desired purpose, and if the repayment structure is conducive to your cash flow. Take your time to determine the amount of funding your business will most benefit from.

Step 2: Collect Your Documents

Here is what you will need to submit with your application:

  • A valid driver’s license
  • 1 voided business check
  • Past 4 months of bank statements
  • Past 4 months of credit card processing statements

Step 3: Fill Out Our Online Application

To start the application process, give us a call or fill out our short online application. We will ask you to provide some basic information, along with your desired funding amount.

Step 4: Speak to a Representative

Once you apply, a representative will reach out to you, so make sure you have all your documents ready from 'Step 2'. The representative will explain the repayment structure, rates, and terms you qualify for. This will ensure that there are no surprises or hidden fees during repayment. Once you decide, you will be given a final application to submit along with your documents.

Step 5: Receive Approval

If you’ve been approved, you’ll hear back from us within 24 hours. Funds should then appear in your bank account in 1-2 business days.

What If I’m Declined?

Your application may be declined if your business’s cash flow is insufficient at the time of your application. This product places an emphasis on monthly revenue, so applicants with strong sales in the previous 4 months are more likely to receive approval than those without. You may also be asked to provide statements going back farther, even from a previous year.

In some cases, we may conclude that taking on more debt would do more harm than good for your business. In this case, we might recommend a different, more affordable business financing tool. At Crown Funding Source, we can help you explore your options and point you in the direction of the most sensible choices.