Whether you need a long-term loan, a line of credit or a business cash advance, $500,000 loans come in many flavors. But you generally need to be in business for one to two years with a minimum monthly revenue of $350K to qualify. Compare providers to make sure you’re getting the most competitive rates and terms before you apply.
Most lenders offer $500,000 business loans, including banks, credit unions and online lenders. Established businesses might find more competitive rates on a business loan of this size with a large national bank. Newer businesses might want to try applying with alternative online lenders and SBA loan providers.
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Business loans for $500,000 cover a wide range of funding needs. Here’s a list of the most common types.
| Type of financing | Description | Use |
|---|---|---|
| Short term loan | An unsecured lump sum loan with repayment terms of up to 18 months | To cover unexpected costs or to survive a downturn |
| Business term loan | An unsecured lump sum loan with repayment terms up to 10 years | To provide working capital for more established businesses |
| Business line of credit | A revolving line of credit for ongoing needs | To tap into funds as needed and pay off as you go |
| Business cash advance | A quick turnaround loan for newer businesses | To borrow against the money you plan to make |
| Accounts receivable financing | A loan with an amount tied to your receivables | To access cash by selling your purchase orders or receivables |
| SBA loan | A low interest small business loan partially backed by the government | To provide working capital to grow your business |
| Startup loan | A term loan for businesses with limited credit history | To provide working capital to get your business off the ground |
| Equipment financing | A collateralized term loan to fund equipment | To pay for any kind of equipment for your business |
| Business credit card | A revolving line of credit for ongoing needs | To tap into funds as needed and pay off as you go |
Business loans can either be secured or unsecured. Most $500,000 business loans require some kind of collateral — especially if it’s an equipment loan or for commercial real estate. However, it’s possible to get an unsecured business loan of $500,000 from select online lenders.
Typically, you’ll need a higher credit score and stronger business financials to qualify for an unsecured business loan. You also might need to prove more business experience, requiring at least two years of experience for approval.
While a $500,000 business loan is below the average borrowing amount of $660,000, it’s still a big enough amount that your small business might have difficulty qualifying if you’re just getting started.
To qualify for a business loan of this size, you and your business must typically meet criteria the following criteria:
Since $500,000 business loans tend to have tight credit requirements, you’ll likely qualify for a competitive rate if you qualify for this loan.
Depending on your business’s financials and your credit, you can expect an APR on the lower end of the spectrum of business loan rates a lender offers, possibly around 10%. If you apply for an SBA loan, rates are capped at the prime rate plus 2.25% to 2.75% for most programs, depending on your loan term. This doesn’t include SBA loan fees, which vary depending on the loan.
Loans of this size also typically come with a loan term of at least a few years. Use the calculator below to find out how much your loan might cost based on different rates and terms.
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It depends on your loan. Most $500,000 loans are term loans, which come with fixed monthly repayments. Some short-term business loans come with biweekly, weekly or even daily repayments, though short-term loans in such a high amount aren’t common.
If you apply for a merchant cash advance, you’ll repay it with a percentage of your business’s daily sales. And if you get an advance on your unpaid invoice with invoice factoring, you won’t repay the factoring company at all — you just won’t get your invoice’s total value.
The application process varies depending on the lender you end up with. But you’ll generally follow these steps to find a lender that fits your business’s needs and apply for a $500,000 loan.
The turnaround time on $500,000 loans is often longer than loans of smaller amounts — lenders tend to be more thorough with your application. While some lenders advertise a 24-hour turnaround time, receiving your funds could take a few business days to a week.
Loans backed by the Small Business Administration (SBA) offer low rates and high loan amounts to businesses that have a hard time qualifying elsewhere. But they also come with some of the highest rejection rates in the market, and you’ll likely need to be required to make a down payment.
It’s possible to find $500,000 in business financing if you apply for a merchant cash advance or invoice financing — but you’ll need the revenue or unpaid invoices to support this loan amount. Generally, term loans of this size are not available to business owners with bad credit.
Yes, but it’s rare for a startup or new business to qualify for high-dollar amounts at competitive rates. For other options, start with our comprehensive guide to startup loans.
You’ll typically need good credit and at least a year in business to get approved for a business loan of this amount, even with a secured loan.
To compare lenders and get prequalified, see our guide to the best business loans. To learn more about business loans first, check out our comprehensive guide to business loans, where you can learn more about the nuances of business financing.
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