How to Get a $100K Business Loan for Your Business 

You can get a $100K business loan by submitting an application to a traditional financial institution or an online lender.  

Here’s what you should know to navigate the process successfully, including the qualification requirements, how to prepare for them, and the different types of loans available.  

Is It Hard to Qualify for a $100,000 Business Loan? 

Qualifying for a $100,000 business loan can be challenging, but it’s far from impossible. Additionally, the eligibility requirements can vary significantly depending on the type of lender you wish to borrow from. 

Traditional lenders, like a bank or a credit union, tend to demand a lot from prospective borrowers. They typically want to see excellent credit scores, several years in business, and a history of solid financial performance. 

In contrast, online lenders tend to be more forgiving. They may be more willing to work with business owners who have below-average credit or began their operation too recently to have established a track record of profitability. 

For example, here are the qualification requirements for Bank of America, a traditional financial institution, and OnDeck, an online lender: 

Of course, there’s a tradeoff. Generally, banks and credit unions offer more favorable financing terms than online lenders.  

You could get a $100K business loan more easily from a company like OnDeck than a bank, but it will often cost more and have a shorter repayment term. 

For more information on how much funding you can secure through various types of loans, check out our article, How Much of a Business Loan Can You Get. 

What Are the Credit Score Requirements for a $100,000 Business Loan? 

The minimum credit score requirements for a $100,000 business loan depend primarily on whether you’re attempting to secure business financing from a traditional financial institution, such as a bank, or an online lender. 

As we’ve established, traditional institutions have higher expectations. Generally, you can expect them to look for good to excellent personal credit, often defined as a FICO score of at least 700 in this context. Bank of America is a perfect example. 

Meanwhile, online lenders tend to have less rigorous credit requirements for prospective borrowers.  

They may give you a business loan even with a personal credit score in the low 600s. OnDeck’s 625 minimum threshold is pretty typical, but FundBox and Balboa Capital both accept scores from 600 (Fundbox) to 620 (Balboa Capital). 

In addition to your personal score, some lenders may also have business credit score requirements, especially more traditional ones.  

For example, you generally need a FICO Small Business Scoring Service (SBSS) score of at least 155 to secure a Small Business Administration (SBA) loan through a 7(a) lender. 

How to Get a $100K Business Loan 

Here’s a step-by-step guide on how to get a $100K business loan that can finance your operation: 

• Assess your needs and budget: Before anything else, determine exactly how much funding you need and how much monthly debt service you can handle. The last thing you want is to qualify for a loan only to cripple your cash flows. 
• Check your credit reports and scores: Your personal and business credit both play a significant role in your eligibility for financing. Make sure you understand what you can realistically qualify for, and fix any errors in your credit report that might harm your chances. 
• Compare potential loan offers: Don’t just settle for the first small business loan that sounds like a good fit. Shop around for providers that will offer you the most favorable terms, such as the lowest interest rate, smallest monthly payment, or lengthiest loan term. 
• Gather your documentation: Applying for a business loan often requires that you provide documents like financial statements, tax returns, or a business plan. Check your prospective lenders’ requirements and make sure you have the necessary documentation prepared. 
• Apply with multiple lenders: You never know what kind of terms you’ll get from a lender until you have an offer in hand, so it’s often beneficial to submit multiple business loan applications and pick the most favorable.  

Once you receive loan approval and sign the necessary documents, funding often takes somewhere between one and five business days. Once again, it depends on the lender you’re working with and the type of business loan. 

How to Build Business Credit to Qualify for a $100K Business Loan 

A good business credit score can help you qualify for a $100K business loan. Some business lenders, most notably SBA loan issuers, won’t consider your application without one. Here are some steps you should follow to build your business credit: 

• Establish a separate legal entity: Form a separate entity for your business, such as a limited liability company (LLC). Not only does that protect your personal assets and credit, but it also allows your business to apply for credit under its own name and Employer Identification Number (EIN). 
• Get a business checking account: A business bank account provides several benefits, including streamlining your bookkeeping and helping to separate your business and personal activities. Additionally, some lenders require that you have one to qualify for a loan. 
• Apply for a DUNS Number: A DUNS Number is another nine-digit identification number for your business, but it’s primarily used to track your company in Dun & Bradstreet’s (D&B’s) systems. D&B is one of the major business credit bureaus, and a DUNS Number is necessary to open your credit report with it. 
• Open vendor and financial tradelines: Building business credit requires a mix of credit accounts. Vendor tradelines, such as net 30 accounts, come from businesses that don’t specialize in extending credit. Financial tradelines, such as a business credit builder loan or credit card, come from dedicated creditors.  
• Make timely payments and keep debts low: A positive payment history is just as important for building business credit as it is for personal credit. In fact, scores like the PAYDEX reserve the best ratings for those who pay before their due dates. Keep your debts low enough that you can always afford to pay them back. 

Check your business credit reports and scores regularly as you build business credit.  

Not only will that help you track your progress toward being eligible for a $100K business loan, but it also helps you quickly address any issues or errors that might negatively impact your credit. 

How to Find the Best $100K Business Loan Offer 

Finding the best $100K business loan offer typically involves some fairly extensive due diligence. Once you have a few different offers in hand, here are some steps you should take to identify the most favorable loan option: 

• Compare annual percentage rates (APRS): APR is the best measure of your loan offer’s total financing costs, including the interest rate and one-time charges like origination fees.  
• Consider other loan terms and restrictions: Make sure you also review the other important terms of the offer, such as the life of the loan, the timing of the payments, and any notable restrictions. For example, if you hope to pay off your loan ahead of schedule, early repayment penalties would be a significant issue. 
• Review lender reputations and customer service: The details of a loan offer are certainly important, but so is the trustworthiness of the lender that makes it. Don’t forget to factor each lender’s online reviews and customer support policies into your decision. 

Remember, the best $100K business loan offer is the one that makes the most sense for your unique goals and circumstances. That might not always mean the one with the lowest interest rate. 

For example, if you’re having issues staying cash flow positive, it might be more beneficial to choose the offer with the lowest monthly payment. Prioritize the aspects of the loan offer that will contribute most to your long-term success. 

Types of $100K Business Loans to Choose From 

Here are the main types of $100K business term loans, which follow a traditional repayment structure with fixed monthly installments of principal and interest: 

• Online term loan: If you’re a new small business owner or have bad personal credit, online loans may be the only way to get a $100K business loan. However, they tend to carry high financing charges, so be sure you can afford to make the payments before you apply. 
• Bank term loan: If you have good personal credit, at least two years in business, and a history of strong financial performance, it may be worth pursuing a bank loan. They typically provide more favorable APRs and repayment terms, though they’re harder to secure. 
• SBA term loan: SBA loans are widely considered the gold standard of business loans. Because the SBA guarantees a portion of them for the lender, they tend to have the lowest interest rates and lengthiest repayment terms. To qualify, you must meet all the same eligibility requirements for a bank loan and have strong business credit. 
• Equipment financing: If you’re interested in a $100K business loan to finance the purchase of an asset other than real estate, an equipment loan might be ideal. As a secured loan, they use the new asset as collateral, so they may be more accessible and provide better terms than an unsecured loan. 
• Commercial real estate loan: If you need financing to facilitate your real estate investing business, these are typically the best option. They're secured business loans and may require a down payment, but they have principal amounts and repayment terms that make them ideal for acquiring or improving real estate. 

The type of business or startup loan that makes the most sense for you depends on factors like why you need the funds, your creditworthiness, and your ability to service the debt. Consider all three factors before you choose a direction. 

Alternatives to Business Loans 

Installment loans are an effective way to get the financing your business needs, but they’re not the only way to borrow $100K. In some cases, you may be better off using an alternative like the following: 

• Revolving line of credit: A business line of credit is one of the most flexible financing arrangements for business owners. Instead of providing a lump sum upfront, they let you borrow against a credit limit. Once you pay off your balances, you can draw from the account again and again, as needed. 
• Invoice financing: These arrangements involve selling off or borrowing against your outstanding invoices. In exchange for getting your payment sooner, you give up a percentage of your invoice value. Depending on the deal, you or the lender may have to collect from the original customer. 
• Merchant cash advance: Like a traditional term loan, these accounts provide a lump sum upfront, but you typically pay them back with a percentage of your daily or weekly card sales rather than fixed monthly payments. 

A business line of credit is about as difficult to qualify for as an unsecured business loan from the same lender. Invoice finance arrangements and merchant cash advances are more easily accessible, but they tend to be some of the most expensive options. 

Learn more about the types of loans we’ve covered so far in our article on the best no personal guarantee business loans. 

Business Credit Cards 

Business credit card stacking is a tried-and-true method of securing $100K or more in financing. It involves opening multiple business credit card accounts so their combined credit limits add up to the loan amount you need. 

Business credit cards are typically easier to qualify for than business loans, often requiring little more than a good personal credit score. They’re also revolving and highly flexible, helping you facilitate a variety of payments, earn cash back, and build credit. 

However, credit card stacking can be risky. Not only do business credit cards carry higher interest rates than most long-term types of financing, but applying for multiple credit cards and borrowing heavily against them can hurt your credit. 

Business Crowdfunding 

Business crowdfunding is another great way to borrow $100K, with many campaigns generating even more. Crowdfunding involves raising capital from a large number of lenders or investors, typically through online platforms. 

Because the approach involves raising funds from so many different parties, the amount each one has to contribute is relatively low. That can make it easier to convince them, as their risk is inherently reduced. 

However, business crowdfunding platforms often take a significant portion of your funds for facilitating the campaign. As a result, it can be a surprisingly expensive form of financing. 

Improve Your Credit with eCredable 

If you’d rather pursue a more traditional business loan, consider using eCredable to build your personal or business credit. Our programs can transform your recurring expenses into tradelines, helping you establish a positive credit history. 

We can even report up to two years of previous payments, which can provide a significant boost to your scores almost overnight. Give it a try today!