Photo by <a href="">S O C I A L . C U T</a> on <a href="">Unsplash</a>

Small Business Loans: How Much is Enough to Get You Started?

Small business loans are a vital source of financing for many entrepreneurs and small business owners. These loans can be used to fund a variety of business expenses, including working capital, inventory, equipment purchases, and even expansion plans. But what exactly qualifies as a small business loan amount? In this blog post, we'll explore the answer to that question.

The Small Business Administration (SBA) defines a small business as a company with fewer than 500 employees. However, the loan amount that is considered small can vary depending on the lender and the purpose of the loan.

Generally speaking, loans that are under $100,000 are considered small business loans. These loans are typically used to fund smaller projects, such as purchasing inventory or equipment, hiring staff, or covering short-term cash flow needs.

For loans that are over $100,000, the lender may require additional collateral or a personal guarantee from the business owner. These larger loans are typically used for more significant projects, such as financing a business expansion or purchasing commercial real estate.

It's important to note that while $100,000 is a common benchmark for small business loans, the actual loan amount can vary greatly depending on the lender, the industry, and the creditworthiness of the borrower. In some cases, small business loans can be as small as a few thousand dollars or as large as several million dollars.

To determine the right loan amount for your business, it's important to consider your current financial situation and your long-term goals. Start by reviewing your business's financials and identifying your funding needs. Then, research lenders that offer loans that meet those needs and compare their rates and terms.

Ultimately, the amount of the small business loan you receive will depend on your business's financial situation, the lender's underwriting criteria, and the specific loan product you choose. Regardless of the loan amount, it's essential to manage your loan responsibly, make timely payments, and use the funds wisely to ensure the long-term success of your business.

Sencha can help you with your financing journey through our AI-based engine. If you’re considering another type of financing, let us help you weigh your options.

Ready to Get funded?

Sencha Credit’s loan application process is built to cater to the needs of small businesses within various industries with maximum flexibility.

Apply for Funding