Small business loans Oregon

While every lender will have their own application process, you can prepare to apply for a small business loan in Oregon by following these general steps: 

1. Begin by researching and selecting a lender that fits your business needs. This could be a traditional bank, credit union, online lender or an alternative financing source. Swoop can help you narrow down your options to those that best suit your business needs and qualifications. 
2. Make sure that you have a well-prepared business plan that outlines your business model, financial projections, and the purpose of the loan. 
3. Gather all necessary documentation, which may include financial statements, tax returns, business licenses and any other relevant paperwork. Be prepared to provide details about your business and how you plan to use the funds.
4. Choose the type of loan that best suits your needs, whether it’s a term loan, line of credit, SBA loan or another financing option. Different loans have different eligibility criteria and terms, so make sure to understand the specifics of each.
5. Complete the loan application accurately and pay attention to any additional requirements or questions the lender may have. Submit all required documents along with the application.
6. After submission, follow up with the lender. Be prepared to provide additional information or clarification if requested during the review process to keep the application process moving forward.
7. Once you’ve selected a loan offer, work closely with the lender to finalize the details and complete the closing process. Review any loan offer thoroughly to make sure you understand all of the terms, rates and fees. 
8. Use the funding as stipulated in the loan agreement and make your repayments on time. 

You may seek help from business consultants or financial advisors during the process to make sure you understand what you’re signing up for. Use a loan calculator to help you determine the total cost of a loan with interest and fees and to help you decide if you can afford the monthly repayments. 

What credit score do I need?

The credit score required for a small business loan can vary depending on the lender and the type of loan you’re seeking. Traditional lenders such as banks generally prefer higher credit scores, often looking for scores above 680. However, alternative lenders may be more flexible and consider lower credit scores, although they generally charge higher interest rates to make up for the risk. For SBA loans, a minimum credit score of around 640 or higher is often recommended, depending on the type of loan and the business’s other qualifications. 

It’s important to note that while a good credit score improves your chances of approval and better interest rates or terms, lenders also consider other factors such as your business’s financial health, revenue and the purpose of the loan. This is why having a solid business plan is so important in the loan application process. Also, you can work on your credit score over time and wait to apply for a business loan until you’re ready. 

What are the typical interest rates on a business loan in Oregon?

The typical interest rates on a business loan in Oregon can vary based on several factors including the type of loan, the lender, your creditworthiness, the loan amount and outside economic conditions. For example, SBA loans have interest rates tied to the U.S. Prime rate and currently average between 11.5% to 16.5%, depending on the type of loan and the amount of the loan. Traditional bank loans average between 5.75% and 12.5%, while online or alternative loans offer rates as high as 60% or more.

It’s important for business owners to compare offers and carefully review the terms and conditions to secure the most favorable interest rate based on their specific circumstances.

How long does it take to get funds?

The time it takes to receive funds for a small business loan can vary depending on various factors, such as the type of loan, the lender’s internal processes, the completeness of the application and the responsiveness of the borrower in providing required documentation. Traditional bank loans typically involve a more extensive underwriting process, which may take several weeks to a few months. SBA loans also have extensive review and underwriting processes and can take up to six months. On the other hand, online lenders and alternative financing sources often provide faster approval and disbursement, with funds potentially available within days.

To speed up the process, it’s essential for business owners to have all necessary documentation prepared and submit a complete and accurate application. Clear communication with the lender and a prompt response to any requests for additional information can also contribute to a faster turnaround.

Ultimately, the specific timeline for receiving funds will depend on the individual circumstances of the loan application and the policies of the chosen lender. Make sure you understand the average funding times of the loan you choose before you apply. 

What alternative business financing options are there?

In addition to business loans, there are several alternative financing options available for small businesses. Business lines of credit are a popular option, allowing the business access to money up to a pre-set spending limit. Similar to credit cards, you only pay interest on the amount you spend and you can often access the money again once you’ve paid it off.

Invoice financing allows businesses to use outstanding invoices for immediate cash, while merchant cash advances provide upfront funds in exchange for a percentage of future credit card sales. Additionally, microloans, often offered by community development financial institutions, provide smaller loan amounts to businesses, particularly those in underserved communities.

Peer-to-peer lending platforms offer a variety of loan products from individuals, often with streamlined application processes. Don’t forget crowdfunding platforms which enable businesses to raise capital from a large number of individuals. Angel investors and venture capitalists provide equity financing in exchange for ownership or a share in the business, usually for high-growth startups. 

Choosing the right alternative financing option depends on factors such as the business’s financial needs, creditworthiness and the purpose of the funds. Researching and understanding the terms and conditions associated with each option is important for making informed decisions.