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Small Business Expansion Funding & Loans

Once you’ve launched your business and gotten established in your first target market, it might be time to expand. Whether you’re looking to make a large property or equipment purchase, hire a new round of staff or pay for a new set of facility supplies, a business expansion loan could be what you need to finance those goals.

Before diving into a business expansion loan, it’s important to first evaluate your financial needs and qualifications, as well as the nature of the purchase or expansion that you intend to make.

In this article, we’ll take a look at some of your business financing options and lenders that you may want to consider to help you meet your target.

What Is An Expansion Loan?

An expansion loan is a loan that’s used to finance any piece of your business that can contribute to its growth or the next stage of its development. This typically entails funding a new property purchase, new equipment, the next round of hiring, or even a staff training program.

How Can I Get A Loan To Expand My Business?

While the interest rates and amount of funding that you’ll have access to largely depend on the size, age and revenue of your business, having a personal credit score above 640, an annual revenue above $50,000 and at least two years in business will increase your chances of being approved for the best loans.

Even if you don’t possess these qualifications, however, it may still be possible to find an affordable loan and the amount of financing that you need to fund your next step.

What Can I Use An Expansion Loan For?

Business expansion loans can be used to pay for large inventory purchases, commercial real estate purchases, down payments on new company vehicles, new training programs and supplies, a new round of hiring or anything that contributes to a business’ overall growth.

What Do I Need Before Applying?

Before applying for a business expansion loan, there are a few documents that will be helpful to have on hand:

  • Balance sheets
  • Business and personal tax returns
  • Bank statements
  • Personal financial details
  • Business financial details
  • Insurance or collateral
  • Personal credit score
  • Business plan
  • Revenue statements

Common Types of Expansion Loans

Banks & Credit Unions

Banks and credit unions often offer term loans and businesses lines of credit with lower rates than many online lenders. Unlike online lenders, however, getting a loan to expand your business through a bank could take several weeks, and even up to a few months.

SBA Loans

The Small Business Administration (SBA) offers some of the lowest-interest loans and highest amounts of funding in the industry to highly qualified borrowers and established businesses. Borrowers can access up to $5 million through an SBA loan, with rates as low as 5.99%.

SBA Loan Options

Merchant Cash Advance

Merchant cash advance can be one of the most expensive forms of business financing. This form of lending provides borrowers with a lump-sum payment, that is then repaid through percentage of all future credit and/or debit card sales. Borrowers typically make those payments on a daily or weekly basis.

Merchant Cash Advance Options

Business Lines of Credit

If you’re not sure about the exact amount of cash that you need, a business line of credit may be worth looking into. This form of financing allows borrowers to only use what they need and pay for the amount they have used. Unlike a merchant cash advance or term loan that issues one lump sum, borrowers receive regular access to a set amount of money that they can pull from.

Business Lines of Credit Options

Low Cost Small Business Expansion Loans

SmartBiz

Borrowers can access up to $350,000 through SmartBiz’s SBA 7(A) loan program, or up to $5 million through their commercial real estate loans. Their regular SBA loans come with repayment terms of 10 years, and commercial real estate loans through the lender come with 25-year terms. SmartBiz connects borrowers with some of the most wallet-friendly loans in the industry, with a maximum annual percentage rate of just 11.04%.

SBA 7(A) COMMERCIAL REAL ESTATE LOAN

Loan Amount:Up To $5 Million
APR Range:Up to 11.04%
Time To Fund:Within 45 days
Loan Term:25 Yrs
How To Qualify:675+ Personal Credit Score
$250,000+ Annual Revenue
Great Option For:Borrowers With Good Credit
SBA Loans
Click “Check Rates” to apply to SmartBiz


SBA 7(A) LOAN
Loan Amount:$30,000 – $350,000
APR Range:9.7% – 11.04%
Time To Fund:Typically take several weeks to fund, but can fund as quickly as within seven days.
Loan Term:Maximum loan term is 10 years.
Origination Fee:4.00%
How To Qualify:650+ Personal credit score
$50,000+ Annual revenue
Great Option For:Borrowers with good credit
SBA loans
Funding real estate purchases
Refinancing debt
Credit Check?Soft credit check and hard pull
Co-Applicants Accepted?No cosigners
Direct Pay-Off To Creditors?No
Click “Check Rates” to apply to SmartBiz

» MORE: SmartBiz SBA Loan Review

Credibility Capital

If you fall short of qualifying for a SmartBiz SBA loan, you can give Credibility Capital a try. With small business loans of up to $400,000, this lender can help businesses make small to medium-sized property or inventory expansions. Their APRs range between 10% and 25%, and loans fund within just seven days. Credibility Capital’s loans come with repayment terms of one, two and three years.

Loan Amount:$10,000 – $350,000
APR Range:8.00% – 25.00%%
Time to Fund:Typically 7 days
Loan Term:Up to 3 years
How To Qualify:680+ Personal Credit Score
$250,000+ Annual Revenue
Great Option For:Borrowers With Good Credit
Short & Medium-Term Financing
Click “Check Rates” to apply to Credibility Capital

» MORE: Credibility Capital Business Loan Review

Funding Circle

Funding Circle offers small business loans of up to $500,000, with annual percentage rates ranging between 10.91% and 35.5%. Their loan terms range between six months and five years, with cash becoming available within 10 days.

Loan Amount:$25,000 – $500,000
APR Range:4.99% – 26.99%%
Time To Fund:10 days on average
Loan Terms:One to five years
How To Qualify:660+ Personal Credit Score
No Minimum Annual Revenue
Great Option For:Established Businesses, Not Sole Proprietors
Click “Check Rates” to apply to Funding Circle

» MORE: Funding Circle Business Loan Review

Best Expansion Loans for Poor Credit

Kabbage

If you’re having trouble getting approved with SmartBiz or Credibility Capital, it might be worth considering a small business loan with Kabbage. Kabbage offers loans of up to $250,000, with annual percentage rates ranging between 24% and 99%. Because this company’s loans can come with higher APRs than some of its lower-rate competitors, Kabbage is also more willing to work with new businesses or borrowers with poor credit scores.

Although your credit score is factored into the application determination process, Kabbage takes a more holistic approach and evaluates other elements such as your financial history and annual revenue.

Loan Amounts$2,000 to $250,000
APR Range24% to 99%
Repayment Terms6, 12 or 18 months
Time to FundingA few minutes to several days
Credit Score560+
Click “Check Rates” to apply to Kabbage

» MORE: Kabbage Business Loan Review

Business expansion funding for fast cash, ease of qualifying

OnDeck

OnDeck offers loans of up to $500,000, with annual percentage rates ranging between 9% and 99%. This lender works with a variety of borrowers, offering the most qualified the lowest rates, and high-risk borrowers rates upwards of 50% and 60%. Their loans can fund as soon as the next business day or within a few business days, so OnDeck can be a good option for borrowers who want fast cash and large loans.

Loan Amounts$5,000 to $500,000
APR RangeAs low as 9.99%
Repayment TermsTerm loans up to 3 years
Time to FundingAs fast as 1 day
Click “Check Rates” to apply to OnDeck

» MORE: OnDeck Business Loan Review

Expansion Loans for Good Credit

LendingClub

LendingClub is a great business expansion financing option for borrowers with excellent credit and extensive financial histories. Borrowers can access up to $300,000 through this lender, with annual percentage rates ranging between 9.8% and 35.7%.

To qualify for a business expansion loan with Lending Club, you should have a credit score above 600 and at least three years of credit history.

Although these are the minimum requirements, however, LendingClub’s borrowers tend to have credit scores upwards of 700, longer credit histories and above-average annual revenues. Your debt-to-income ratio should also be below 40%.

Loan Amount:$5,000 – $300,000
APR Range:9.77% – 35.71%
Time To Fund:As quick as 2 days
Loan Term:One to five years
How To Qualify:620+ Personal Credit Score
$50,000 Annual Revenue
Great Option For:Good Personal Credit
Works With All Entities Including Sole Proprietors
Click “Check Rates” to apply to LendingClub

» MORE: LendingClub Business Loan Review

Conclusion

Whether you’re looking to expand your property or make a large inventory purchase to expand your business, there are several lenders and financing options that can help you take that next step. If you’re a highly qualified borrower with an established business, a Small Business Administration loan could be the right option for you.

If you’re not sure that you have the qualifications to take out an SBA loan, you can also look into lenders like Credibility Capital and or OnDeck.

No matter what your financial and business qualifications are, however, it’s important to understand your organization’s goals and needs. Remember to take the time to evaluate multiple offers in order to find the loan with the lowest rate and most flexible repayment terms.

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