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$200,000 Small Business Loans: How To Get a Business Loan For $200k

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$200,000 Small Business Loans: How To Get a Business Loan For $200k

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How To Get a $200k Small Business Loan

Lenders That Offer a $200,000 Business Loan

  • Rapid Finance - Up To $600,000
  • Fora Financial - Up to $1,400,000
  • Kapitus SBA Loans - Up To $20,000,000
  • Kickfurther Inventory Financing - Up to $2,000,000
  • OnDeck - Up To $250,000
  • Credibly - Up to $400,000
  • Fundation - Up To $500,000
  • VFI Equipment Financing - Up to $10,000,000

What is a $200k small business loan?

A $200,000 small business loan is a financial arrangement  where a lender — usually a bank, credit union, or online lender — provides a business with $200,000 to be used for a wide variety of business expenses. This arrangement, otherwise known as a loan, is to be repaid in installments with interest. While the specifics of how the loan works and how it can be used can vary, small business owners often use $200,000 business loans for acquiring new locations, expanding, stocking inventory, purchasing equipment, and more. Some $200,000 business loans require collateral. These loans are known as secured business loans. Some $200,000 business loans do not require collateral. These loans are known as unsecured business loans. 

How hard is it to get a $200K business loan?

Qualifying and getting a $200,000 business loan can be challenging, but with the right preparation you can increase your chance of approval. Typically, the main factors for qualifying are personal and business credit score, business revenue, cash, and track record, although requirements can vary depending on the lender and the type of loan. The bottom line here is that lenders want to feel confident that you’re able to repay the loan, so the stronger your financials, the better your chances of getting approved. 

To better understand the risk you pose to a lender, even down to the industry you operate in, visit mySMBscore for a glimpse of how a lender views your business when considering it for a business loan. It's essential to do your homework, prepare a solid business plan, and explore different lending options to find the best fit for your needs. From there, you can review personalized loan offers and get actionable advice on how to improve your credit score to unlock competitive small business loan offers - all of which mySMBscore can help with.

Getting a $200k business loan requires many different factors, here are a few:

  1. A solid business plan to share with the lender
  2. Typically a solid credit score of at least 600+. However, some lenders may offer $200k business loans for less desirable credit scores.
  3. In business for a minimum of one year. Although there may be lenders that have lower requirements.
  4. Having an annual revenue of $50k - $300k. More annual revenue would help of course.
  5. A 10% down payment at the very least.
  6. Financial information about the business - the necessary paperwork the lender asks for.
  7. A personal guarantee or collateral would definitely increase your chances of getting a $200k loan.
  8. Proof of income.
  9. Solid employment history.

What are the requirements to qualify for a $200k small business loan?

While requirements may vary depending on the lender, there is a basic set of criteria you'll likely need to meet to qualify for a $200k small business loan.

  • Personal and business credit score -  When it comes to qualifying for a small business  loan, your personal and business credit score should be in tip-top shape. The higher your score, the better your chances of returning a competitive offer. If you’re looking for ways to improve your business credit score, mySMBscore can provide you with actionable steps to improve your business credit score, thus opening the door to help your business unlock competitive loan offers. 
  • Business revenue - Lenders usually want to see that your business generates enough revenue to repay the loan, so make sure you meet their minimum revenue requirements before applying or taking on a loan that’s outside of what your business can handle.
  • Time in business -  Most lenders prefer to work with companies that have been in business for at least two years to confirm that they’re successful and stable.
  • Collateral -  Some loans may require collateral, such as real estate or equipment, to secure the loan. This can help the lender feel confident that if you default on the loan, they’ll have something to leverage their losses. 
  • Financial statements - The lender will likely need to review recent financial statements, including profit and loss statements, balance sheets, tax filings and cash flow projections. Financial statements can be used as a way to further prove your business is qualified for a loan. 

What are the interest rates for a $200k small business loan?

There are a lot of things that can impact the interest rate that comes along with a $200k small business loan. Rates can be single digit and go all the way up to double digit numbers. By checking your SMBscore and understanding how lenders assess risk you can gain perspective and negotiating power as to what a fair interest rate is for your business. Remember that the loan term can impact the interest rate and loan cost too. Short-term loans might have lower rates and lower total loan costs, but monthly payments might be higher. Whereas long-term loans might have higher rates and higher total loan costs, but lower monthly payments. Carefully consider options and empower yourself with valuable insights provided by mySMBscore. 

What is the repayment period for a $200k small business loan?

Most small business loans are term loans meaning they are funded as a lump sum to be repaid within a certain term or repayment period. Similar to interest rates, repayment periods can vary. With a larger loan amount like $200,000 lenders are likely to offer longer loan terms to help the business afford the payments. As you shop offers, find a repayment period that allows payments to fit your budget, but also be mindful of total loan costs. Repayment period can greatly impact the total loan costs as interest rate can too.

How long does it take to get approved for a $200k small business loan?

The approval time for a $200,000 small business loan can vary significantly, depending on the lender and your financial situation. Traditional banks and SBA loans may take several weeks or even months to approve a loan. On the other hand, online lenders and alternative financing options can offer much faster turnaround times, with some providing approval same-day or within a few business days, although funding times can vary. To speed up the approval process, make sure you have all your documentation ready, including financial statements, business plans, and tax returns. The more prepared you are, the quicker you can get that funding!

What types of collateral are required for a $200k small business loan?

What’s acceptable as collateral can vary depending on the lender. For small business loans that require collateral you may be able to back the loan with the following types of collateral:

  • Real estate (commercial, residential property, etc.)
  • Equipment or machinery
  • Inventory
  • Unpaid invoices
  • In some cases, your personal assets, like your home or car

Keep in mind that if you're unable to repay the loan, the lender has the right to seize the collateral to make sure their losses are covered.

Can I use a $200k small business loan for any purpose?

One of the great things about a small business loan is that you can use it for so many different business purposes to grow your business and reach your goals. Without many restrictions, a $200,000 business loan can be used for things like: 

  • Expanding your operations or opening a new location
  • Purchasing new equipment or machinery
  • Hiring and training new employees
  • Boosting your working capital

Make sure you closely review your loan terms and check with your lender for any specific restrictions or guidelines on how you can or can’t  use your loan. 

What documents do I need to apply for a $200k small business loan?

Applying for a $200k small business loan can seem like a daunting task, but having all the necessary documents ready can make the process much smoother. Here's a rundown of the essential paperwork you might want to gather before starting the loan process. 

  • Business Plan - Lenders like to see that you have a thorough business plan and goal on how you’ll use your funding. 
  • Financial Statements - Make sure you have financial statements ready to send like profit and loss statements, balance sheets, and cash flow statements
  • Tax Returns - You may need to submit both personal and business tax returns for the past two to three years so your lender can assess your company’s financial position and how you’ll repay the loan.
  • Bank Statements - Don’t be surprised if your lender asks for several months of bank statements that speak to your company’s cash flow and financial management.

What are the consequences of defaulting on a $200k small business loan?

Yikes! One of the worst things is to default on a loan — especially a business loan. Defaulting on a $200,00- small business loan can have severe consequences for both your business and your personal finances, like: 

  • Damage to your credit score (both personal and business) makes it more difficult to secure future financing
  • The bank could seize the assets that you used as collateral for the loan
  • Your lender could take legal action to recover the outstanding debt

To avoid defaulting on your loan, it’s critical to really understand your finances and what you can afford each month for your business. If you’ve defaulted on a loan in the past, see where your business stands now at mySMBscore before applying for a new loan. 

What is the monthly payment on a $200,000 business loan?

To calculate the monthly payment on a business loan you can use the loan amount, interest rate, and the length of the loan term. For a $200,000 business loan we could use a series of assumptions to calculate a monthly payment. Let's assume an annual interest rate of 5% and a business loan term of 5 years/60 months. After making these assumptions, the estimated monthly payment for a $200,000 business loan with a 5% annual interest rate and a 5-year term would be approximately $2,961.13. However, please note this is just a series of assumptions. Monthly payments vary severely depending on the terms, interest rate and loan amount among other factors.

Are there any fees associated with a $200k small business loan?

Unfortunately, most lenders do have some sort of fee associated with getting a $200,000 small business loan. The fee structure will depend on the lender and loan product, but some typical fees include:

  • Origination fees - These are charged by the lender to cover the cost of processing and underwriting the loan. They usually range from 1% to 5% of the loan amount.
  • Application fees - Some lenders charge a fee for reviewing your loan application, even if you don't get approved.
  • Prepayment penalties -  If you decide to pay off your loan early, some lenders may charge a prepayment penalty fee.
  • Late payment fees -  If you miss a payment or pay late, you may be charged additional fees.

When you use mySMBscore, you can compare different loans to find the right fit for you and your business. Our lending platform utilizes advanced AI technology that constantly analyzes a wide range of current and historical data, including loan performance, accounting, and macroeconomic data from more than 1,200 organizations. This allows us to provide valuable insights and connect you with reliable loan offers from our lending partners to help your business maximize its potential. 

What credit score is needed for a $200k business loan?

Credit scores can vary depending on the lender, here are a few different types of lenders with varying credit scores needed:

  • For Traditional Banks and Credit Unions, these lenders typically require a "good" to "excellent" credit score, especially for a $200k loan. Your credit score should range between 670 to 850.
  • SBA loans are government backed and usually require "good" to "excellent" credit scores for large loans like $200,000. For SBA 7(a) loans a credit score of 680, at minimum, would get you a loan.
  • For some business loans, especially loans for $200,000, lenders might require collateral or personal guarantees.
  • For online lenders, credit score varies substantially. We recommend a credit score in the high 600's at least to get a decent loan offer.

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