Also question is, can an average person get a business loan?
The average loan extended to U.S. businesses in 2018 was $663,000. However, depending on the type of loan and the lender, averages may range from
|Lender||Average Business Loan Amount|
|Small national or regional banks||$146,000|
Keeping this in consideration, can you be denied a business loan?
Nobody likes rejection. If you’re a small business owner who needed a business loan, a “denied” stamp can sting. That denied loan application, however, isn’t always the end of the road. The first thing to do is find out why the lender denied your business loan application.
Can you get a small business loan without income?
Although most lenders do require a minimum annual revenue to qualify for a business term loan, there’s not a universal bar for income—each lender sets their own minimum.
Are you applying for a business loan? Commercial lenders may look at both your business and personal credit scores before they approve your application. If you have poor personal credit and you’re wondering if it will affect your approval or the terms of your commercial loan, the answer is yes, it can.
How much debt does the average small business have? According to USA Today, the average small business owner has approximately $195,000 of debt.
Many lenders require a minimum annual revenue, which can range anywhere from $50,000 to $250,000. If your revenue isn’t high enough, consider looking into short-term business loans, SBA microloans or even equipment financing.
When getting a business loan, my advice is to always try to apply for 10-20 percent more than the company really needs if you can qualify for the higher amount. Many times expenses are either more than anticipated or revenue takes longer to generate than expected.
The reality is that qualifying for an SBA loan is extremely hard—if only because lenders can set their eligibility requirements high, lending only to the best candidates. Plus, the application process for an SBA loan is longer, requires more documentation, and is more involved than with any other loan.
Banks evaluate your company’s debt repayment history, your business references, the quality of your product or service, and whether you have a good reputation. As a business owner, your personal handling of credit is also an excellent gauge of your likeliness to repay a business loan.
Why Was My PPP Loan Denied? Your PPP loan may have been denied because you failed to pass the SBA’s eligibility requirements. There’s also a chance that you made an error on your application, such as putting a zero in the wrong place or mistyping your Employer Identification Number.
Common Reasons SBA Loan Applications Get Denied
Credit score is too low or not long enough, or credit history contains other red flags like a recent bankruptcy. Issues of character (e.g. a criminal record) Not enough collateral. Not enough business revenues or capital to repay the debt.