- Many small business owners seek small business loans of anywhere from $10,000 to $1 million when they need help to cover business expenses like real estate, utilities, equipment, inventory, payroll, marketing, or other operational expenses.
- A business loan of $75,000 could be the sweet spot for small business owners who want to start or expand their small business.
- The best way to get good loan rates is through good credit, no matter what loan amount you’re seeking.
- Applying and qualifying for a small business loan can be tricky, but Nav has tips to help you find the right $75,000 business loan for your company.
Loan Requirements for a $75,000 Business Loan
Depending on your point of view, $75,000 may be a lot of money or not much at all. For a small business borrower, that amount could seem like a life-saving number, while a big bank might see it as small potatoes. But your eligibility for any loan amount typically requires a few standard qualifications, no matter how big or small the amount of money you need.
This is because any lender needs to determine how risky it is to lend to you and how likely you are to be able to pay them back. Someone asking to borrow $250 is probably going to be less risky to lend to than someone asking for $25,000 and even less risky than someone looking for $2.5 million. But there are other factors that determine your risk level for the lender.
Your business loan application will probably include questions about:
- Credit scores — both your business credit and personal credit scores will be taken into account. The better the scores, the more likely you are to qualify, and the more likely you are to get a better interest rate. This doesn’t mean that you can’t get financing for $75,000 if you have bad credit, but it’s a good idea to know your scores at the bare minimum so you can be prepared. You can check your credit scores and see loan options with Nav by signing up here.
- Years in business — one of the biggest risk factors for a lender is that you’ll go out of business before you can pay them back, so knowing how long you’ve been in business can factor into their decision to lend to you as an indicator of your staying power. Your personal resume can also have some sway in this, if you can prove that you know the ins and outs of the business you’re in.
- Cash flow — your business revenue, outgoing payments, and existing debt are more historical elements that indicate how likely you’ll be able to pay back the loan, so lenders take cash flow and other financial records into account when reviewing your application.
- Personal and financial records — any lender is going to want to see a handful of important documents, including tax returns, financial statements, identification, business incorporation documents, your business plan, and more.
- Collateral — depending on the type of loan you want to get for your specific business needs, you may need collateral to ensure that the lender will give you the money. This could be any one of several business assets, but may include the equipment you use, your vehicle or vehicles, or even your business itself. Unsecured business loans won’t require collateral, but they may require a personal guarantee and cost more upfront.
What are the Typical Payback Options for a $75,000 Business Loan?
As with any loan, a small business loan will include a loan payment plan. Your scheduled monthly payments may vary widely, depending on the interest rate you get and the repayment terms. Many term loans will have a repayment plan of 60 months. A low-interest loan of 6% with repayment terms of five years (or 60 months) would be about $1,500 a month. However, a short-term loan of one year will have a much higher price tag in terms of interest, and you may get dinged with prepayment penalties for paying it back too quickly.
Small Business Administration (SBA) loans tend to have better terms and interest rates, but can be more difficult to qualify for and tend to have a lengthy application process. Online lenders or alternative lenders may have more relaxed qualifications and application processes, but they may also have much higher interest rates. Many loans may also include an origination fee in order to process the application, and some may charge a monthly service fee, so it’s important to read the fine print.
You may also find that a business line of credit is a better option for you than a small business loan. With a business line of credit, you borrow only the amount of money you need and pay interest on that, plus you usually get to have the credit back once you pay it off. Again, read the fine print — some of these can have annual percentage rates (APR) of nearly 80%.
What are the Best Lenders for $75k Loans for Startups?
Finding a startup business loan can appear a bit tricky. Startups have unique needs for small business financing, especially because they typically don’t have much (or any) business history to show their monthly revenue and years in business.
Alternative lenders and short-term lenders are often more willing to lend to “risky” businesses like startups. They also tend to fund faster, sometimes as quickly as one business day, and have shorter, less rigorous application processes. But their money can come with a cost — like a higher interest rate and a steeper loan term — usually one year.
If you think your startup can pay back the money quickly, there are several short-term loan options for startups who need a loan of $75,000, including:
A merchant cash advance (MCA) or business cash advance is another type of financing that startups and entrepreneurs have been considering more and more. With an MCA, you promise to pay back the money you get from the lender through your credit card sales by making a daily payment. Clearly this isn’t a great option if you’re not going to be making credit card sales, and if you’re not expecting to have a large amount of sales quickly. But it can be a way to sidestep the usual difficulties of getting a loan that startups may face.
You may also consider taking out a personal loan for your startup, although you may not qualify for as much funding as you would with a business loan.
What are the Best Lenders for $75k Loans for Established Businesses?
As an established business, you may have more business financing options than a startup, especially if you have several years in business and a steady monthly revenue. You’ll probably also have established business credit and more financial history, which gives you better odds of qualifying for $75,000 with a traditional lender like a bank or credit union. An SBA loan will be easier for you to get than it would be for a startup or other small business.
A few options you may consider include:
How to Calculate Payments on a $75,000 Business Loan
With a small business loan of $75,000, you’ll get the money in your bank account as a lump to spend how you need to. But how can you plan for how much you’ll have to pay back?
Obviously, you’ll need to know the total amount of your loan plus the term length, or how long you have to repay it. $75,000 divided between 60 months versus 12 months is a vastly different sum. Plus, you need to include the interest rate, origination fees, and any monthly fees the loan may require.
Luckily, you can find a business loan calculator online that can help you calculate the monthly payment, including a term-loan calculator created by Nav.
How to Build Credit to Get a $75,000 Business Loan
Your credit history is the number one way that you can show a lender your creditworthiness. If you’d like better terms for your $75,000 business loan, the best thing you can do is establish and build your business credit, as this is the top indicator that lenders — traditional or otherwise — look at to determine your risk level. You can learn how to establish business credit and ways to improve it over time to help you qualify for the loan.
In the meantime, you may also consider business credit cards as a way to get the money you need and build your business credit. These tend to be much easier to qualify for, and you can earn rewards and perks for using your credit card to pay for everyday business expenses.
Nav can help you find the best loan options for $75,000 that you’re most likely to qualify for based on your business credit score and other factors. Sign up for a free Nav account today to see your options.
This article was originally written on June 29, 2022 and updated on September 1, 2022.