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A business loan gives entrepreneurs access to the capital they need for operating expenses, working capital, inventory or equipment purchases, and debt repayment. Different business loans have different terms, loan amounts, and annual percentage rates (APRs), which add up to different monthly payments.
It can be difficult to compare these rates and terms, particularly if the math is complicated. With the aid of our simple business loan calculator, you can calculate your monthly payments and make astute business decisions.
varies according to loan term Minimum credit score Every business is different and must be approved and reviewed Depending on your credit history, relationship with American Express, and other factors, the required FICO score might be higher.
$2 Million Business Loan Qualifications
It’s likely that you have an opportunity that you’re trying to take advantage of rather than needing $2 million in working capital, though there’s nothing wrong with obtaining this amount if necessary.
Whatever the reason for your loan, the money provides you with the means to support growth at a higher level without endangering your cash flow. Some of the many advantages you can anticipate are as follows:
- Streamlined cash flow
- Increased purchasing power
- Capacity to take advantage of opportunities immediately
- Potential tax benefits (on some financing products)
- Numerous financing options to choose from
- Ability to tailor your contract to your business and opportunity
You don’t have to obtain a single loan for $2 million if you need it; instead, you can combine several financing options, such as a line of credit and a term loan, to give you the most flexibility as you grow your company.
Who Can Use a $2 Million Business Loan?
Your company’s financial history determines whether you qualify for a $2 million business loan. Unless you have collateral, you must have been in business for a year and make $2 million in sales in order to get approved.
Here are some instances of how various sectors can expand and grow with a $2 million loan:
- Construction: Invest in cutting-edge technology, such as drones or augmented reality, to help plan and finish projects more quickly.
- Manufacturing: Reduce your COGS by negotiating bulk inventory discounts with your suppliers.
- Restaurants: To build your brand, take over a rival, expand to a new location, or spend money on marketing.
- Medical: To improve the quality of your care, renovate your office or buy new equipment.
- Business Services: Make an investment in computer hardware to expand into new markets or expedite procedures.
These are just a handful of the numerous sectors that $2 million in funding can help. A $2 million investment in your company can make a big difference in any market you operate in, provided you make the right investments.
5 Types of $2 Million Business Loans
| Type of Financing | Description |
| Business Term Loan | Business term loans feature a single lump sum of capital with installment payments over a set time frame. Most term loans are between 7 to 25 years for a $2 million funding amount. One of the benefits of term loans is fixed interest rates with predictable monthly payments.
Term loans are best for one-off expenses or in scenarios where you know exactly how much money you’ll need – such as real estate purchases, equipment financing, debt refinancing, and more. |
| Business Line of Credit | A business line of credit offers access to a pool of funds you can withdraw from as you need – up until your approved credit limit. The best part is that you won’t have to pay interest on the funds you don’t withdraw. In this way, lines of credit are a more flexible form of financing and ideal for businesses that don’t know the exact funding amount they’ll need.
Another reason why business lines of credit are so flexible is that you’re oftentimes free to use your approved funds however you see fit. You can use a business line of credit to finance operational expenses, ongoing purchases, unexpected costs, or new growth ventures. Business lines of credit typically feature fixed interest rates and have a flexible payment schedule. Depending on your lender, you may be able to choose between fixed installments or monthly minimum payments. |
| SBA 7(a) Loan | Small Business Administration (SBA) loans are oftentimes the first choice for business owners. These loans feature funding amounts up to $5 million with long terms and some of the lowest interest rates on the market.
SBA loans are partially government-backed. In other words, the government agrees to cover a portion of the loan amount in case you default. Lenders face less risk and offer lower interest rates as a result. Despite their many benefits, SBA loans feature rigid eligibility requirements that can make them difficult to obtain. |
| Invoice Financing | Invoice financing lets business owners exchange their outstanding invoices for cash. Invoice financing has some of the highest approval rates of any type of business loan.
Your credit score, business history, and other factors tend to weigh less. The approval process is also typically fast, and it’s not uncommon to receive your funds quickly as well. On the downside, invoice financing features more fees than other types of business loans. It’s also rare to receive the full value of your unpaid invoices. |
| Revenue-Based Financing | Revenue-based financing exchanges a percent of your future sales for short-term funding. Qualifications focus on your business’s profitability rather than its credit history, which allows more entrepreneurs to reach an approval.
Unlike most other financing products, revenue-based financing comes with a “factor rate” instead of an interest rate. Although it can be confusing at first, that percentage is multiplied by your funding amount to determine how much you’ll pay for your financing. |
How Much Will a $2 Million Business Loan Cost?
A $2 million business loan’s cost will vary depending on a number of factors, including your credit score, the kind of lender, the loan’s term, and more. $2 million business loans are typically at the higher end of the range offered by most lenders.
Loan terms range from 7 to 15 years, with rates from 7 to 2015 annual percentage rate. SBA%207(a) loans typically have the lowest interest rates, typically around 6%.
You’ll need to demonstrate strong income and credit scores in order to be eligible for the best rates. Less impressive applicants might still be eligible for funding, but they might have to pay more.
When it comes to business loans, banks and credit unions typically have the best rates. Regretfully, using these lenders to get financing is also more challenging. Compared to credit lines, other loan products like term loans and SBA loans are typically less expensive.
Shorter-term loans have larger monthly payments but typically carry lower interest rates over the course of the loan. Long-term loans have lower monthly payments. However, they’re also more expensive over time.
There are numerous options for $1 million business loans, and each loan type has a unique interest rate, repayment plan, and other features. Some loan types may be better suited for specific situations.
Where to Get a $2 Million Business Loan?
Commercial loans up to $2 million are available from non-bank lenders, credit unions, and banks. While the latter has easier qualifying requirements and higher rates, the former has more stringent eligibility requirements and lower rates. The “best” option depends on your business.
Banks and credit unions are notorious for upholding inflated qualifications. To be approved by most institutions, you must have a 720 FICO score, be in business for at least two years, and bring in $250,000 annually. Many businesses look to non-bank lenders for a quicker and more convenient process when they don’t meet their requirements.
Non-bank lenders work with companies of all sizes, in terms of revenue, credit profiles, and ages. Banks typically require 60-90 days to process an application and fund it; however, non-bank lenders can complete the process in a matter of hours or days. Despite their higher rates, the cost of capital disappears if the business opportunity projects enough revenue growth to cover the interest paid.
Recall that there isn’t a single “optimal” kind of lender for business loans. It’s critical to consider the advantages and disadvantages of each option before choosing one because each has unique benefits and disadvantages that could make one more appealing to a business than another.
$2 Million Loan Qualifications – Explained
Online lenders, or fintech lenders, tend to be more lenient. When applying to banks or credit unions, you should anticipate needing to submit the following documents.
- Business credit score (700+)
- Personal credit score (700+ & at least 3 years)
- Bank statements (going back at least one year)
- Business plan (with details on your sector, rivals, expansion plan, etc.) ).
- Business history (at least 3 years)
- Cash flow
- Collateral
- Entity type
- Profit margins
- Revenue levels
To reduce risk, banks and credit unions uphold stringent regulations. They must be assured that your company has the resources to handle payments on schedule and that you are in a strong position to expand.
Since lenders are constantly trying to safeguard themselves in case of an emergency, many of them require collateral in exchange for funding. Any kind of asset you own with value is collateral. You might have to agree to give up your collateral in order to obtain a loan in the event that you are unable to make payments.
As you can expect, providing collateral increases your level of risk as the borrower. However, collateral offers lenders an extra layer of security, which is why many may demand it.
Fintech or online lenders should be taken into consideration if you’re searching for financing options that are more flexible. Online lenders provide a wider range of financing options for different kinds of business requirements. Even if you have a shorter credit history or a lower credit score, you can often still get loans.
Fintech lenders and online lenders can be more flexible. They typically provide a wider range of financing options for various companies in different circumstances. Some businesses may even be able to obtain funding despite having shorter business histories or lower credit scores. Learn more here.
Compare $2 Million Loans
Most $2 million business loans aren’t easy to come by. Good credit and a sufficient income are prerequisites for persuading lenders that you can make payments as agreed. It’s also not uncommon to have to put up collateral.
Working with a group of committed experts to help you navigate the process is beneficial. If in doubt, contact National Business Capital, a specialty finance group that matches companies with funding sources. Our team keeps your company’s best interests front and center throughout negotiations while utilizing our exclusive lender relationships to obtain offers that other lenders are unable to.
Our Business Finance Advisors will assist you in investigating different loan options and will provide knowledgeable guidance at each stage. Our lenders place more emphasis on your room for growth than strict qualification requirements. Our financing options are also quick to implement, taking only a few hours.
Ready to get started? Fill out the 60-second application here.
How to Qualify for a $2 Million Loan
To learn everything there is to know about getting a $2 million loan for your company, watch CEO Joseph Camberato’s video.
Exclusive Connections: Thanks to our enduring partnerships with leading B2B lenders, National Business Capital has been propelling business expansion across the country since 2007. This allows our clients to take advantage of deals that they wouldn’t find elsewhere. Personal Advisors: Customize your financing to meet your specific needs by working with your assigned Business Finance Advisor. Finance on Your Schedule: Unlike traditional banks, you can quickly meet your urgent capital needs or plan for future projects. Long Term PerspectiveYou’re not getting just a loan. Our goal is to establish a connection that facilitates future capital access.
With just a few clicks, you can obtain the funding you require to realize your complete potential.
- 1. Use Caution When Applying
- 2. Examine Your Offers: Our knowledgeable Business Finance Advisors get in touch with you quickly and take the time to get to know you, your company, and your objectives.
- 3. Start Developing When you have money in hand, you can confidently take on obstacles and seize opportunities.
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See how National keeps companies connected to essential growth capital.
Apply for a $2 Million Business Loan
Take advantage of the chance to expand your company and acquire the funding you require.
FAQ
How hard is it to get a 2 million dollar loan?
Most $2 million business loans aren’t easy to come by. Good credit and a sufficient income are prerequisites for persuading lenders that you can make payments. It’s also not uncommon to have to put up collateral. Working with a group of committed experts to help you navigate the process is beneficial.
Is it hard to get a million dollar business loan?
Obtaining a million-dollar business loan necessitates additional planning and investigation. You’ll typically need good to excellent personal and business credit scores, as well as a high annual revenue—often millions. However, seven-figure small business loans are undoubtedly achievable with the appropriate plan of action.
What is the payment on a $1000000 business loan?
Example Monthly Payments on a $1 Million Dollar Business Loan: Let’s say you have a $1 million loan with a fixed interest rate of 4% for the next 10 years. The monthly payments on that business loan would be $4,774. 15. Next, think about a 15-year business loan at the same interest rate. The payment on that is $7,396. 88 a month.
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