Small business loans New Mexico

While every lender and loan program will have specific requirements and applications, there are some general steps you can expect to need to follow:

1. Determine loan purpose: Clearly define the purpose of the loan. Understanding the specific use of funds is crucial to finding the right loan for your business, including the amount and the lender. 
2. Research loan options: Explore different types of loans available in New Mexico, the U.S. and online. Consider factors such as interest rates, terms and eligibility criteria. Swoop can match your needs and qualifications to available loan programs. 
3. Check your eligibility: Review the eligibility requirements for the chosen loan program or lender. Make sure your business meets the necessary qualifications. This may include your time in business, annual revenue and your personal credit score. 
4. Prepare documentation: Gather the required documents for your loan application. Common documents include business financial statements, tax returns and a business plan, but you may need to provide additional information such as proof of collateral, financial projections and identification documents. 
5. Choose a lender: Select a lender that fits your business needs. Choose based on your preferences and the nature of your business. You may also want to consider a lender that’s more responsive or has a better customer service reputation. 
6. Complete the application: Fill out the loan application provided by the chosen lender. While many applications are online, some lenders prefer hard copies. Be thorough and accurate in providing all requested information.
7. Wait for approval: Once you’ve submitted your application, the lender will review your documents. The approval process can vary, so be prepared for some waiting time. Make sure you’re responsive to any request for more information.
8. Review loan terms: If your application is approved, carefully review the terms and conditions of the loan. You may ask a business accountant, consultant or lawyer to review the document and explain the terms to you. You can also use a loan calculator to help you determine the total cost of the loan and your monthly payment. 
9. Finalize the agreement: If you agree with the terms, finalize the loan agreement. This may involve signing documents and providing any additional information. You may also negotiate the terms if you don’t find them agreeable. 
10. Receive funds: After completing all necessary steps, the funds will be disbursed to your business account.

You may consider talking to financial advisors or small business development centers in New Mexico during the application process. They can provide guidance and additional insights based on your specific business situation. Many lenders will also provide a loan officer or account manager who will guide you through the application process and answer any questions you may have. 

What alternative business financing options are there?

Small business loans aren’t right for every business. Luckily, there are several alternative financing options for small businesses beyond traditional bank loans, such as:

1. Peer-to-peer lending: Peer-to-peer lending platforms connect businesses with individual investors who are willing to lend money, often at competitive rates.
2. Invoice financing: This option allows businesses to receive funding by using their outstanding invoices, improving cash flow.
3. Merchant cash advances: Businesses can receive a lump sum upfront in exchange for a percentage of future credit card sales, with repayment tied to daily card transactions.
4. Crowdfunding: Platforms which enable businesses to raise funds from a large number of people.
5. Business lines of credit: This provides flexibility by allowing businesses to draw funds up to a predetermined credit limit, with interest paid only on the amount borrowed.
6. Angel investors: Individuals who invest their personal funds in businesses in exchange for equity.
7. Venture capital: Venture capital firms invest in high-growth potential businesses in exchange for equity.
8. Self-financing: Using personal savings, assets or contributions from friends and family is a common method of financing for small businesses.

Each financing option has its advantages and disadvantages, including accessibility and flexibility. You may even combine several methods of financing to help your business grow, but make sure you can afford to repay whatever funding you get. 

What credit score do I need to get a business loan?

There’s no magic credit score that can ensure your business will secure a loan in New Mexico. However, lenders (especially traditional banks) are generally more willing to lend to those with credit scores in the “good to excellent” range, which is above 700. Having a higher credit score can also give you leverage to negotiate lower interest rates and longer repayment terms. 

Depending on the loan type, you may be able to secure an SBA loan with a “fair” to “good” credit score of around 650-680. They may require a personal guarantee, collateral or downpayment as well. 

Online or alternative lenders are known for being more willing to lend to borrowers considered less creditworthy, and may even offer a loan to a person with a credit score as low as 550. However they will usually tailor their interest rates to make up for the risk in lending, which can bring your rate up as high as 99%. 

If you have a lower credit score, you may work on improving your credit before applying for a loan. It’s important to note that while credit scores can be a strong indicator of your ability to repay a loan (or creditworthiness), lending institutions may also consider other factors such as your business’s financial health, projected success or business plan.