5 Strategic Tips for Getting a Large Business Loan in 2024 (2024)

No matter how well your business is doing, there always comes a point in which having access to additional funding can pave your way to long-term success.

Whether you need extra capital to expand your company, scale your operations, invest in large projects, purchase inventory, or simply manage day-to-day expenses, getting a large business loan can significantly expand your opportunities for growth.

While applying for a large business loan can be an easy and streamlined process with the right lender, there are a few key things that you need to know before you hit the Apply button.

In this article, we will give you some of our main tips for getting a large business loan in 2024. So, without further ado, let’s get right into it:

What Is a Large Business Loan?

Before we get into the tips, it’s important to identify what a large business loan really is. In other words, what differentiates large loans from regular loans?

A large business loan typically refers to financing that exceeds $500,000 and can go up to several million dollars. These loans are aimed at businesses looking to fund significant expansions, acquisitions, large projects, or operational needs.

The exact amount varies by lender and is based on the borrower’s creditworthiness, financial stability, and the purpose of the loan. If you are looking for a specific amount, you may find these articles helpful:

What Is the Difference Between a Regular Business Loan And a Large Business Loan?

The primary difference between a regular business loan and a large business loan lies in the amount of capital provided. Regular business loans typically offer smaller amounts, up to $500,000, suitable for everyday operational needs or minor expansions.

In contrast, large business loans provide substantial funding, often exceeding $500,000, aimed at significant investments like purchasing real estate, major expansions, or large-scale projects, requiring stricter eligibility criteria.

5 Tips For Getting a Large Business Loan in 2024

So, what are some of the most important things you need to know when it comes to getting a large business loan this year? Let’s take a look:

1. Improve your personal and business credit score

As we mentioned earlier, getting a larger amount of funding is typically associated with stricter eligibility criteria because there is more capital at stake, which is riskier for the lender.

In order to offset the risk, lenders will want to see a good personal and business credit score. This will show that you are a trustworthy borrower, and you are more likely to repay your loan.

If your credit score is less-than-perfect, we highly recommend improving it as much as possible before applying – here are a few ways to do it:

Pay your bills on time – there is nothing more harmful to your credit score than late payments. If you need, set up reminders or automate them to ensure a timely action.
Reduce debt levels – lower the balance on your credit cards, as well as other revolving credit accounts. Aim for a credit utilization ratio of less than 30%.
Build a strong credit history – open a business credit card, and establish lines of credit with suppliers or vendors. A strong business credit history is a must.
Limit new credit inquiries – avoid applying for new credit accounts before getting a large business loan, as they can temporarily lower your credit score.
Maintain older accounts – keep older accounts open and active in order to demonstrate a longer history of credit management, as this impacts your score.
Monitor your credit score – regularly monitor your business credit score through bureaus like Experian, Equifax, and Dun & Bradstreet. If you notice any errors or discrepancies, make sure to dispute them.
Use a mix of credit types – having a mix of installment loans (like auto loans or mortgages) and revolving credit (like credit cards) can positively impact your score.

Keep in mind that lenders will look at both your business credit score, as well as your personal credit score, so you should keep both in check. If your business has any co-owners or partners that own 20% of the shares, their personal scores will be considered as well.

What is the ideal personal credit score for a large business loan?

The ideal personal credit score for securing a large business loan typically starts from 680 and above. Higher scores are favored by lenders as they indicate lower risk, potentially leading to better loan terms, lower interest rates, and increased borrowing amounts.

What is the ideal business credit score for a large business loan?

The ideal business credit score for a large business loan is typically 75 or higher on the Dun & Bradstreet PAYDEX scale, which ranges from 1 to 100. Scores in this range signal to lenders that your business is a low risk for lending, improving your chances for approval and favorable terms.

2. Avoid underestimating or overestimating your loan needs

When it comes to getting a large business loan, another thing you’ll need to keep in mind are your loan needs. You should have a clear idea of how much you are looking to borrow in order to support your business goals.

What happens if you underestimate or overestimate the loan amount?

If you underestimate:

Shortfall of funds – underestimating your loan needs may leave you short of capital, which will negatively impact the proper implementation of your plans.
Cash flow pressure – stretching inadequate funds too thin can put a strain on your business’ cash flow, affecting your ability to cover operational costs and loan repayments.
Need for more funds – lack of funds may leave you seeking for additional financing, which not only becomes more challenging but also more expensive as you are increasing your Debt-to-Income ratio.

If you overestimate:

Higher costs – if you borrow more than you actually need, you may end up paying more interest and higher costs, resulting in unnecessary debt.
Reduced flexibility – bigger debt obligations can limit your flexibility to respond to unforeseen business challenges or opportunities.
Adverse financial ratios – excessive debt can negatively impact your debt-to-equity ratio and other financial metrics, making it harder to secure future financing or investment.

So, how can you determine your loan needs if you plan on getting a large business loan? Assessing your business plan, your current financial situation, as well as your payment capacity can all help.

If you are searching for financing for a specific project, such as buying land or building a new office building, you can calculate the total cost of the project, which will help you determine the borrowing amount.

3. Compare offers from multiple lenders

When it comes to getting a large business loan, another tip we have is to get offers from multiple lenders instead of settling with the first option you see.

Shopping around not only allows you to compare terms and rates, but also gives you more negotiation power to get better cost savings.

In addition, getting various offers gives you a more clear insight on your current options on the market, helping you set realistic expectations about loan amounts, terms, and rates based on your creditworthiness and financial situation.

Getting offers from multiple lenders can be a time-consuming and daunting task if you are trying to apply to each lender manually. With National Business Capital, you can apply to +75 lenders simultaneously, and get exclusive offers that you won’t find anywhere else.

4. Be prepared to show a comprehensive business plan

Before getting a large business loan, be prepared to show a strong and detailed business plan to assure lenders of your venture’s viability, as well as your ability to repay the loan. It should include:

Company description – including legal structure, history, operations and objectives
Executive summary – a complete overview of your business, products, and USPs
Market analysis – focus on industry analysis, market trends, and target audience
Competitor analysis – it’s important to understand the current market dynamics
Organization – what is your business’ organizational structure?
Management – who is your management team, and what is their expertise?
Marketing strategy – outline your strategies for attracting and retaining customers
Sales approach – what is your main sales approach for bringing new customers?
Funding request – specify the funding amount that you are looking to borrow, and how you plan to use it

Another key thing to include in your business plan before getting a large business loan are your financial projections, ideally for the next three to five years.

They should be as detailed as possible, and should include income statements, cash flow statements, and balance sheets. Offering a break-even analysis will be highly beneficial.

5. Gather all the necessary documents

Another thing to keep in mind before getting a large business loan is that you need to prepare all the documentation that the lenders may ask you for. This includes, but is not limited to:

Your business plan
Balance sheets (past 2-3 years)
Income statements (past 2-3 years)
Cash flow statements (past 2-3 years)
Financial projections (next 3-5 years)
Tax returns (past 2-3 years)
Bank statements
Debt schedule
Legal documents
Business & personal credit reports
Collateral documentation (if applicable)
Ownership and affiliation
Insurance information

Having all this documentation prepared beforehand will not only help you streamline and speed up the loan application process, but it will also improve your chances of approval. In addition, it can help you get a large business loan with better terms and rates.

Getting a Large Business Loan With National Business Capital

If you are looking for the right lender for getting a large business loan, look no further than National Business Capital.

With $2+ billion financed since 2007, multiple awards, and an experienced team of Business Finance Advisors, we have everything you need to find the best financing options for your project.

Are you ready to hop on the path of getting a large business loan? Apply here.