Introduction
Obtaining a business loan with an LLC is entirely feasible with the right knowledge and preparation. Whether you’re looking to fund a new venture or expand an existing business, understanding the unique considerations for LLCs can help you navigate the loan process successfully. In this article, we’ll explore how LLCs can access funding through short-term loans and asset-based loans, as well as the application process involved.
Understanding Your Financing Options
Short-Term Loans:
Short-term loans are a great option for LLCs looking to cover immediate expenses, such as payroll, inventory purchases, or unexpected costs. These loans typically have quick approval processes, allowing businesses to access funds in as little as 24 hours. At REIL Capital, we offer short-term loans with amounts ranging from $30,000 to $250,000, competitive rates starting at 18%, and terms up to 24 months.LLC owners should keep in mind that while short-term loans provide quick access to funds, they also come with higher repayment schedules compared to long-term loans. This makes it essential for LLCs to have a clear repayment strategy in place before applying.
Asset-Based Loans:
Asset-based loans can also be an excellent choice for LLCs, especially those with valuable assets. This type of funding leverages the value of your business assets—such as accounts receivable, inventory, or equipment—as collateral. At REIL Capital, our asset-based loans offer amounts up to $2,000,000, with terms of up to 36 months and rates as low as 10%. The application process generally takes around two weeks. To qualify for asset-based funding, your LLC should have a credit score of 600 or higher, annual revenue of at least $100,000, and a business history of 12 months or more. By utilizing your assets, your LLC can secure financing even if traditional credit checks may not favor your business.
Application Process for LLC Owners
Applying for a business loan at REIL Capital involves a straightforward four-step process:
- General Contact Information: Provide basic details such as your name, business name, phone number, email, requested funding amount, purpose of funds, and how you heard about us.
- Owner Information: Fill in information about the business owner, including job title, date of birth, social security number, ownership percentage, and home address.
- Business Information: Enter relevant details about your LLC, including the industry, Employer Identification Number (EIN), and any other pertinent business information.
- Document Upload: Upload necessary documents, such as the last three months of business bank statements, to support your application.
By providing this information, LLC owners can help facilitate a quicker approval process, enabling them to access the funds they need efficiently.
How LLCs Can Strengthen Their Application
To enhance the chances of approval for either short-term or asset-based loans, LLC owners can take several steps:
- Prepare Financial Statements: Having organized financial statements, including profit and loss statements and balance sheets, can help demonstrate your LLC’s financial health.
- Maintain a Good Credit Score: While options exist for businesses with bad credit, maintaining a strong credit score can improve the likelihood of securing favorable terms.
- Showcase Your Business Plan: A well-prepared business plan that outlines your LLC’s goals, revenue projections, and how the funds will be utilized can significantly bolster your application.
Conclusion
Obtaining a business loan with an LLC is entirely feasible with the right knowledge and preparation. By exploring both short-term and asset-based loan options, LLC owners can find suitable financing solutions that meet their business needs. Whether you’re looking to cover operational costs or invest in growth opportunities, REIL Capital is here to help you navigate your financing journey.
