$8 Million Business Loan Options in 2023

The requirements for an 8 million dollar business loan will depend on the lender and the type of loan that you are looking to get. Generally, you’ll need at least a 685 credit score, two years in business, and $8 to $10 million in annual sales to give yourself the best chance of securing an $8 million business loan.

$8 million isn’t a small amount of money by any means. Lenders take on significant risk by offering this amount of money to a single business, so expect to have the lenders you’re dealing with carefully review all your relevant business financial information.

They’ll evaluate your credit score, time in business, cash flow statements, and annual income before coming to a decision, but even then, you still might find it difficult to reach an approval.

Your revenue is of the utmost importance in situations where you’re looking to secure a substantial amount of capital for your business. If you can’t produce enough cash to cover the repayment of the loan, then it’ll be challenging to find a lender for your situation.

Although the revenue requirement is strict, there are a few possible ways around this hurdle. One of which is collateral, which can be any valuable asset you have on your balance sheet.

Some lenders may require a collateral offering for an 8 million dollar business loan. This can include:

• Real Estate
• Valuable Equipment
• Vehicles
• Other Valuable Assets

This often depends on the specific situation at hand. You might not have an asset valuable enough to the lender or any assets entirely, which adds a degree of difficulty to the process.

Many entrepreneurs try to avoid offering collateral under any circumstances, but if your financial information isn’t adequate enough, you might need to change your opinion to secure the business loan you need.

The most important factor in securing an 8 million dollar business loan is the lender you’re dealing with. Every lender will see your business differently depending on the guidelines they have to adhere to.

Some may see your business as a risky investment and decline your application, whereas others might regard your operation highly and offer favorable terms. The only way to achieve the best results is to put time and effort into your lender research, especially if you’re going after a substantial amount of capital.

The application process is lengthy, but you can speed up the pace by having the following documents prepared for lenders to review:

• Business credit score (700 or more)
• Personal credit score (700 or more)
• Bank statements (going back at least one year)
• Business plan (including information on your industry, competitors, growth strategy, etc.)
• Business history (at least 3 years)
• Cash flow
• Collateral
• Entity type
• Profit margins
• Revenue levels

In order to get an 8 million dollar business loan for your organization, you can either do that with a traditional lender like banks or credit unions, or go to online lenders as an alternative route. Both options have their advantages and disadvantages, and the right choice will depend on your business.

Your first stop will likely be the bank or credit union you do business with, otherwise known as the “traditional” lenders. These institutions were previously the only place you could go for business financing prior to the emergence of online lenders.

While their service is a bit antiquated, it still does the job, and many entrepreneurs will continue to leverage business bank loans throughout the lifetime of their business.

Traditional lenders are characterized by strict eligibility requirements and lengthy underwriting times. You’ll need to have:

• A solid credit history
• Extended time in business
• Considerable annual revenue

And other financial proof in order to reach an approval with one of these lending institutions, especially if you’re looking to borrow a sizeable amount like an 8 million dollar business loan. If you need fast financing or you have less than favorable financial information, you might not find traditional lenders too helpful, but this isn’t your only option.

Online lenders are an alternative route. These institutions have less restrictive eligibility requirements, faster funding times, and more flexibility, but the benefits come at a price—higher interest rates. They have a client-focused approach to their process in most cases, which significantly reduces the underwriting and review processes.

Any lenders outside of the two listed above are more likely to involve equity financing. Unlike debt financing, you pay for equity financing with a portion of your business, meaning that the investor will legally own a percentage of your business that correlates with the size of their investment. The process works like the popular TV show, Shark Tank, where investors bid to have a “stake” in the client’s business.

Many entrepreneurs tend to avoid equity financing for a good reason. If you’re looking to maintain complete control over your business and still secure the funds you need to grow, online and traditional lenders will be the way to go.

However, there’s one more player that can help you obtain capital. FinTech marketplaces, like National, combine multiple lenders into one singular platform, which essentially does the research for you. You submit one application and receive multiple offers, but even then, you might not know which offer is best for your specific circumstances.  

Teaming up with National Business Capital is a solution to this issue. Our experienced Business Finance Advisors take the time to learn about you, your business, and your challenges to find best-fit options that fit your needs.

We’re incapable of shackling you with a deal you can’t handle because we care too much about how your business performs after the deal is funded. Plus, we’re always there to help you with future financing needs, giving you a resource in your back pocket to draw on whenever needed.

Exactly how much an 8 million dollar loan will cost will depend on a variety of factors, from the lender that you are dealing with to the financial information of your business such as credit history, financial statement, business tax returns, and more. Another important factor will be the type of loan that you are looking to get.

To sum it up, the specific cost of your 8 million dollar loan will depend on a few different factors, including

• The lender you’re dealing with
• The financial information of your business
• The type of loan you’ve secured
• The length of your repayment terms
• How long you’ve operated in your industry
• The Fed’s current interest rate

The lender you’re dealing with can influence all of the factors above. One might not weigh your time in business as heavily in their decision, while another lender will hold that requirement above all the rest.

It all depends on your situation, and if you aren’t happy with the terms you were offered, there’s nothing stopping you from continuing your search until you’ve found terms that meet your needs.

Interest rates on an 8 million dollar loan range from 7% to 15% APR, and repayment terms vary between 7 to 25 years on average. 

The interest rate is one of the biggest components of the overall cost of your loan, but the repayment terms can influence it as well. Higher interest rates almost always translate into higher monthly payments. Shorter repayment terms will also increase your monthly payments, and vice versa.

There is no “perfect” combination of interest rates and repayment terms for everyone; The specific terms you should consider are determined by your situation, capabilities, and plans to use the borrowed funds.

There are different types of $8 million business loans that you can get for your company. Some options, like business lines of credit, offer increased flexibility, whereas others, like a business advance, are only applicable in certain circumstances. You can choose one or multiple options to reach $8 million in capital; The choice is up to you.

Here are a few business loan options commonly leveraged by entrepreneurs around the country:

1. Term Loans

A term loan is a financing option that’s provided in a one-time lump sum payment. You’ll repay the borrowed amount within the terms outlined by your lender, and you may need to offer collateral as a method of “securing” the financing.

Additionally, some lenders require you to show a detailed plan of how you intend to use the borrowed funds in your business, so be prepared to provide that information if you’re going down this route.

2. Business Line of Credit

Business lines of credit are one of the most flexible financing options available to entrepreneurs. Once you’ve secured one, you can draw from your total credit line whenever you need them and use the funds for almost any business expense.

You only pay interest on the amount you draw, too, which prevents you from having to pay interest on your total credit line.

3. SBA Loans

SBA loans are highly coveted because of their low interest rates and high borrowing limits. You can secure up to $5 million with an SBA 7(a) loan and up to $10 million through their 504 program, with repayment terms flexible enough to be tailored to anyone’s specific needs.

Eligibility requirements on SBA loans are often strict, and you might find it challenging to qualify if you can’t display strong business financials.

4. Business Advance

A business advance leverages your future accounts receivable balance to help you secure funds in the short term. Basically, it’s an advance on your future sales.

Your lender will review your financial information and determine how much you’re eligible to borrow using your A/R projections, which eventually serve as your maximum borrowing limit.

However, you won’t be able to secure the total amount of your accounts receivable through a merchant advance, as the lender takes a portion of your future sales as payment for the service.

5. Invoice Factoring

Invoice factoring can turn your late customer payments into cash today. A late payment or invoice can potentially bring your business to a screeching halt, but with invoice factoring, you can get the ball rolling again.

Much like a business advance, you won’t be able to secure the total value of your outstanding invoices. If you’re looking to secure $8 million through invoice factoring, the value of your late payments should equal or exceed $8 million.

Finding the right lender for your business isn’t easy, and it only gets more difficult if you’re seeking to borrow a substantial amount. You’ll have to thoroughly research your options and set aside time to compare your findings, but what if you can’t?

Many entrepreneurs get stuck in situations where they can’t grow because they can’t take time away from their operations to figure out a solution, which brings their development to a complete standstill and gives their competitors an avenue to outpace them. 

No one wants to find themselves in a situation like this, so they’ll team up with National Business Capital for fast and competitive financing solutions to their challenges. Leveraging a 75+ lender marketplace, our expert Business Finance Advisors do the heavy lifting for you, providing best-fit options that we believe will help you cultivate sustainable growth.

There’s no “one size fits all” approach to financing your business, and if you aren’t satisfied with the options we find for you, all you have to do is let us know. We’ll get back on the grind, find more options, and advise you on ways to use the funds to maximize the benefits of your financing.

With $2 billion recovered for our clients, 2,000+ 5-star reviews on Trustpilot, and a commitment to “Driving Growth for All,” NBC is uniquely capable of helping you prioritize your growth and reach your full potential.

Contact us today to speak with our team!