The Truth About Small Business Loan Interest Rates

Small Business LoansAs a small business owner you know getting the small funding you need to keep your doors open can sometimes be very challenging because of the banks scrutiny and their high interest rates.

You also know getting a loan from the traditional banks and financial institutions quite often requires lots of game playing and jumping through hoops just to get the small funding you need to get by to keep operating your business.

When you’re looking for the best small business loan interest rates, you would be very wise to look outside the traditional banks first and check out what peer-to-peer lending companies can do to help you get the funding you need right now for your business.


Small Business Funding Options

When you’re looking to get approved for a small business loan there are quite a few options open to you depending on quite a few factors so we’re going to discuss at a high level some of the main factors that will have an impact the interest rate you pay as well as the impact whether or no you’ll get approved.

The top 3 factors that are going to have an impact on your loan approval and the interest rate you pay for your small business loans.

  • 1. The amount of the loan
  • 2. Your credit score
  • 3. Your cash flow situation
  • Amount of Funding Requested & Interest Rates

    The fact is the more funding you ask a lender for the more funding for your business the more scrutiny the loan officer at the lending institution is going to put you under.

    When your submitting a loan application it is very crucial that you have justifiable reasons that are very well documented for asking for the funding you’re requesting. So when you apply for a small business loan it is imperative that you have clear reasons why you’re applying and how it’s going to benefit your business.

    This is important because your potential lender needs to feel comfortable in knowing there’s going to be a return on investment for them.

    Plus, when you can show you know what you are doing in business with a clear plan of the benefits of getting the funding, you will be able to get much lower small business loan interest rates.

    Impact of Your Credit Score on Interest Rates

    Another one of the requirements depends upon your credit score. The fact is the better your credit score, the lower your small business loan interest rates will be. As a small business owner your personal credit score will come into play as a factor lenders use to decide if they are going to issue you a loan and what the interest rate is they are going to charge.

    Your Cash Flow Matters

    Even if your credit rating is spotty you can still get great rates on small business loans if you’ve got a great cash flow statement to show you prospective lenders.

    If you can show your potential lender solid cash flow charts and earnings, you are putting yourself in a position of getting much lower small business loan interest rates.

    What lenders what to see is cash flow to ease their mind about the possibility of you defaulting on your low.

    Remember the loan you get is the bankers investment and the bottom line with your lenders is they need to know for certain they are going to get an ROI (Return on Investment) from putting their trust in you.

    Yes! Make sure you have your cash flow statement ready for lenders because this is a major influencing factor on small business loan interest rates!

    Where Should I Apply for a Low Interest Rate Small Business Loan?

    When you’re business needs some funding and you don’t want to deal with the hassles of the traditional lending institutions the really great news is you can take advantage of private investors that are willing to give you the much needed cash injection your business needs today through peer-to-peer lending programs such as the one has.


    When you want to take advantage of really great small business loan interest rates the place to go is Prosper. Check them out and apply online right now to get a fast response for the funding your business needs!

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