Find the Best Business Loan Companies in Beaver Dam, WI

Types of business loans in Beaver Dam

Part of creating a business plan is figuring out how you are going to get money for your venture. Luckily, there are many different financing options that Beaver Dam residents can use to help fund their new businesses:

• Business real estate financing: Commercial mortgage loans are designed to make construction and real estate affordable for business owners. If you're ready to expand from your home office to a more traditional workplace, a commercial mortgage loan can help you pay for it.
• Business vehicle loans: If your business requires you to have a specific vehicle, you can apply for an equipment financing loan. These loans are designed to give business owners the money they need to purchase specialty equipment, like commercial vehicles.
• Startup business loans: Startup loans can provide new businesses with the capital to buy things like equipment, machinery, office supplies and even real estate.
• Merchant cash advances: Merchant cash advances help Beaver Dam business owners get cash quickly without having to wait through lengthy approval processes or meet strict credit score requirements. However, borrowers usually end up paying 20% - 40% more than they borrowed due to interest and fees.
• SBA loans: The Wisconsin government has established many different programs and loans to help fledgling business owners get the money they need. To qualify, you typically need to have a solid credit score and proof of business revenue. If you’ve defaulted on other government loans, like student loans or certain mortgages, you’re disqualified. The average SBA loan amount is $107,000, according to the Federal Reserve.
• Short-term business loans: If you only need a small loan and intend on paying it back quickly, a short-term business loan might be a good option for you. These loans are usually less than $250,000 and the approval process is shorter compared to long-term business loans. On the other hand, long-term loans can be paid back over up to 10 years, have lower monthly payments and are typically in the $500,000 range.
• Business credit cards: Opening a business line of credit or credit card allows you to only borrow what you need instead of taking out a predetermined loan amount. While the application process can be detailed and time-consuming, business credit cards can help balance your cash flow when things are slow.

Keep in mind that these are just a few of the different types of business loans available to Beaver Dam residents. You may also consider accounts receivable loans, business acquisition loans, business invoice financing and business microloans.

Make sure you understand all of the terms and interest rates on your loan contract before signing on the dotted line. A business loan could be the help you need to get established in Beaver Dam, but it is a significant financial decision that you should research and think about carefully.

How to get a business loan in Beaver Dam

The next step in getting a business loan is determining who you want to borrow from. You may want to use an online lender, or you may want to work with a local bank in Wisconsin. The process for getting a business loan differs a little from lender to lender, but here are a few hurdles you can expect as you apply for financing.

• Documentation: Part of applying for a loan is getting all of the required paperwork together to help the lender determine how much they’ll let you borrow. Expect to provide proof of tax returns, bank statements, legal documents (like your commercial lease or franchise agreement) and recent financial statements.
• Credit Score: Just like with a personal loan, credit card or mortgage, your credit score determines how much you qualify for, your interest rates and your repayment terms. Different types of loans have different minimum credit score requirements. For example, most SBA loans require at least a 620 credit score, while you can qualify for a line of credit with a score of just 560.
• Annual Revenue: Another thing lenders look at before approving your loan is your annual revenue because they want proof that you have a consistent income to pay back your loan on time. This annual income requirement varies by lender, but it is usually between $25,000 and $150,000.

Once you gather your documentation, review your credit score and check that you meet all requirements, it’s time to apply. Online lenders make it easy to submit your info and know within a day (sometimes within the hour) if you are approved. If you’re working with a traditional bank, you usually need to make an appointment to apply.

Beaver Dam business loan FAQ

How do business loans work?

Business loans work a lot like personal loans, but they are specifically allocated to entrepreneurs to help pay for business expenses. A business loan helps give you the capital you need to buy supplies, office space, inventory and equipment. There are many different types of business loans, all with their own rules, interest rates and repayment terms. In general, you apply for a business loan, provide the necessary documentation and, if you’re approved, receive funding. Then, you pay back that amount, plus interest and fees, on a previously determined schedule.

What is a 7(a) loan?

7(a) loans are specifically for small businesses. 7(a) loans are backed by the government, which guarantees 85% of loans up to $150,000 and 75% of loans over $150,000. To be eligible for this type of loan:

• You must meet the SBA’s definition of a small business.
• You cannot be a nonprofit.
• You must have proof that you will use the loan for business purposes.
• You can't have any existing debt obligations or be delinquent on any government loans.

What is the average loan amount for a small business?

According to data from the Federal Reserve, the average small business loan amount across banks in the U.S. is $633,000, but this number varies significantly based on the type of loan in question.

What business development resources exist in Beaver Dam?

In Beaver Dam, there are several resources and programs to help entrepreneurs and small business owners establish roots in the community. The Beaver Dam Chamber of Commerce provides year-round programming and events, and the Wisconsin Small Business Development Center provides educational and consulting services.