If you’ve decided to take on a $200,000 business loan, you’ll have a wide range of options, including lines of credit, term loans, SBA loans and more. This loan amount typically requires at least a couple of years in business and six figures in annual business revenue, though requirements differ between lenders. Compare providers to make sure you’re getting the most competitive rates and terms before you apply.
Most lenders offer $200,000 business loans, including banks, credit unions and online lenders. Established businesses with strong financials might find more competitive rates and terms with large national banks on this size of business loan.
Newer businesses are more likely to get better terms from alternative online lenders and SBA providers. But keep in mind that it can take up to several weeks to get an SBA loan. If you need money faster, your best bet is to work with an online lender.
Comparing $200,000 business loans is easy. All you need to do is select your time in business, annual revenue and credit score ranges to find lenders you might qualify with. Then select “Go to site” to get started on your application or visit our review page by choosing “More info.”
The Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
The application process for a $200,000 loan varies by lender but generally involves the following steps:
The turnaround time for $200,000 loans is typically shorter than larger loans, with some lenders offering funding within a few business days to a week. For SBA loans, expect funding to take up to several weeks.
While a $200,000 business loan is well below the average borrowing amount of $660,000, it may still be difficult to qualify if you recently started your business. To qualify for a loan of this size, you typically need:
How much a $200,000 business loan costs depends mostly on your APR and repayment term — which are determined by your creditworthiness, business financials, what type of loan you get and the lender you choose.
Many banks offer rates starting around 6.43% and reaching up to 12.45%. If you apply for an SBA loan, rates are typically capped at the prime rate plus 3% to 6.5%, depending on your loan program, amount and repayment term.
Here’s an example of how APR and repayment term might affect the cost of your loan: if you take out a $200,000 loan with a 7% APR on a 10-year term, your estimated monthly payment would be around $2,322, and you’d pay approximately $78,660 in total interest.
However, if your APR is on the higher end — say 12% — and is being repaid over 15 years, your monthly payment would be similar at $2,400, but you’d end up paying more than $232,000 in total interest.
To find out how much your loan might cost based on different rates and terms, use the calculator provided below.
|
Your loan
|
|---|
| Loan amount |
|
$
|
| Loan terms (in years) |
|
|
| Interest rate |
|
%
|
or
Compare more lenders| Principal | $ |
|---|---|
| Interest | $ |
| Total Cost | $ |
A $200,000 business loan can take many forms, depending on how you plan to use the funds and your business’s financial health. Below are the most common types of loans you may qualify for, along with who they are and aren’t best suited for.
A short-term business loan provides a lump sum of cash with a repayment period of 18 months or less. These loans typically have higher interest rates than long-term options but offer quick funding — sometimes within a day or two. They are ideal for businesses that need fast cash to cover unexpected expenses or temporary cash flow gaps.
A business term loan provides a fixed amount with repayment terms typically up to 10 years (though you may be able to find some longer-term business loans). These loans have lower interest rates than short-term options, making them a great choice for businesses with strong credit and stable cash flow. Term loans can be secured or unsecured, depending on the lender.
A business line of credit is a revolving credit option that allows you to borrow as needed, up to a set limit. You only pay interest on the amount you use, making it a flexible option for ongoing expenses. These are ideal for businesses with fluctuating cash flow or seasonal revenue cycles.
A merchant cash advance provides an upfront sum of cash in exchange for a percentage of your daily credit card sales. MCAs are one of the easiest types of business financing to qualify for, even for those with bad credit. However, they come with high fees and interest rates, making them one of the most expensive financing options out there.
An SBA loan is a government-backed loan that offers low interest rates and long repayment terms. While SBA loans are a great option for many businesses, the application process is rigorous and funding can take weeks to months.
Equipment financing is a secured loan used to purchase or lease equipment. The equipment itself acts as collateral, making it easier to qualify for than unsecured loans. This type of financing is useful for businesses that need expensive machinery or vehicles.
Inventory financing is a loan secured by your inventory, allowing businesses to borrow money based on the value of their stock. This type of financing is ideal for retailers and wholesalers who need to purchase large amounts of inventory up front.
A commercial real estate loan is used to purchase, refinance, or renovate business property. These loans typically have long repayment terms (10+ years) and require a down payment, making them a good option for businesses investing in property.
Franchise loans are designed to help entrepreneurs purchase or expand a franchise business. Some lenders offer specialized franchise financing with favorable terms, but qualification often depends on the franchise’s track record.
When considering secured versus unsecured loans, it’s important to note that secured loans are typically easier to qualify for. They require collateral — some type of asset to back the loan — which goes through an appraisal process.
Unsecured loans may be a challenge to qualify for, especially if you have a low credit score, little time in business or limited revenue, since the lender is taking on more risk. You may also face higher interest rates, and unsecured loans may require a personal guarantee.
You may struggle to get a $200,000 business loan with bad credit. Traditional banks and credit unions usually require strong personal and business credit scores, making approval difficult if your credit history has some rough spots.
However, alternative lenders offer options for bad credit borrowers, such as merchant cash advances and invoice financing. Approval for these types of loans is based on your business’s revenue and cash flow rather than your credit score. But keep in mind that they often come with higher interest rates and fees.
You might also want to look into a secured business loan, offering collateral can improve your chances of being approved. But no matter which route you take, make sure to compare lenders carefully and understand the total cost of the loan before signing your loan agreement.
With a loan as large as $200,000, it’s a good idea to shop around and find the lowest APR possible. Here are a few tips to help you secure a lower APR:
To qualify for a $200,000 business loan, you may need several months in business as well as a good credit profile — though it’s not always required for some loan types. Compare the best business loans to narrow down your options and ensure you get the best deal for your situation.
If you’ve been in business for more than two years and have a good credit score plus strong financials, it should be relatively easy for you to get a $200,000 business loan. Newer businesses or those with limited revenue or bad credit may struggle to secure funding, but there are still options available through merchant cash advances and inventory financing.
Yes, the SBA offers $200,000 loans. But keep in mind that higher loan amounts typically require more annual revenue to qualify. SBA loans offer low rates, but the process is very competitive and many applicants don’t end up qualifying.
The credit score needed for a $200,000 business loan varies by lender, but most banks and SBA lenders look for a minimum personal credit score of 670 or higher. Some alternative lenders may approve borrowers with scores as low as 600 but expect higher interest rates.
The specific repayment structure depends on the loan type and lender of your choice. Most $200,000 loans are term loans with fixed monthly repayments, while some short-term business loans may require more frequent repayments, such as biweekly, weekly or daily. It’s important to review the repayment terms before finalizing the loan agreement to ensure you can meet payments.
Yes, but it is rare for startups or new businesses. Your options may be limited to SBA loans. For example, the 7(a) program requires good credit, a down payment of 10% to 30% and a solid business plan. Plus, you’ll have to offer up a personal guarantee.
Lenders such as banks, SBA lenders and online lenders may be open to offering loans to startups seeking this amount. While some lenders provide rapid funding, traditional banks may have a more rigorous application process and longer turnaround times. And you’ll need the right documentation, such as financial statements, to support your application.
Because it can be hard to qualify for an SBA loan, some entrepreneurs use their own savings or take out a personal loan to launch a new enterprise. Personal loans don’t have a business revenue requirement or time in business requirement, making them ideal for startups — if the lender allows the funds to be used this way.
We look at eligibility requirements, potential costs, SBA options and more.
Achieve your small business goals with a flexible line of credit from Kabbage. Apply online within minutes.
Working capital loans and equipment financing for most businesses — even bad credit borrowers and high-risk industries could qualify.
This active SBA lender specializes funding large expenses with options for startups and franchises
Lendzi lets you compare multiple business loan options in one place. Here’s how it works.
Compare $5,000 business loans and what you need to qualify.
Where to get a business loan in Texas and how to qualify.
How bundling your debts into one monthly payment can help your business take control of its finances.
Find the best business loan whether you have a startup or established business, good or bad credit. Top picks for lines of credit, SBA loans and more.
Learn about financing options including SBA loans, private grants and local programs.