Where can I get a $2 million business loan?
Your business can apply for a $2 million business loan from a bank, credit union or online lender. Banks and credit unions typically have strict requirements — like higher minimum revenue and more time in business — than online lenders, but may offer lower rates. Online lenders accept smaller businesses, but yours will still need to meet a few basic requirements to qualify.
$2 million SBA loans
To cover such a large amount, many lenders work with the SBA. When you borrow, the SBA backs a portion of your loan to help reduce your rates. There are two programs that offer $2 million loans:
- SBA 7(a) program. General-use funding for a wide range of projects — from working capital to refinancing business debts.
- SBA 504 program. Long-term financing for major fixed assets like equipment, commercial real estate and more.
The application process takes longer than other types of business loans, and it’s harder to be approved. However, if you meet the requirements set by the SBA, your business may be able to borrow $2 million at an extremely competitive rate.
Consider an SBA loan if …
- You have time to spend on a long application process
- You’re looking for a competitive rate
Consider other options if …
- You need funding fast
- You haven’t recently applied for business financing
How to get a $2 million business loan
Each lender has its own process, however, these steps should help guide your business toward the right loan option:
- Compare multiple lenders. Your first step is to compare business loan lenders. Not all lender offers loans of $2 million, and varying requirements could mean the difference between approval and rejection.
- Prepare financial documents. Be prepared to show accurate and up-to-date documents such as your business plan, annual revenue projections, bank statements, tax documents and other information that demonstrates your business’s financial health and creditworthiness.
- Speak with a financial advisor. Loop a financial advisor into your plan that can provide valuable guidance and expertise to navigate the loan process and help you assess your options.
- Apply for preapproval. This allows you to gauge your borrowing capacity and understand potential loan terms before signing a contract. Not all lenders offer preapproval, but if it’s available, take advantage of it.
- Review and sign the loan contract. If approved, review your loan contract with your partners and financial advisor to ensure the terms are beneficial for your business.
How much will a $2 million business loan cost?
It depends on your business and the type of financing you’re applying for. Generally, $2 million is on the higher end of what most lenders offer — if they even offer loans of this size at all. Expect long terms from seven to 25 years, and rates on the lower end from 7% to 15% APR.
If you were to take out a $2 million business loan at a 9% APR with a 15-year term, your business would be on the hook for monthly repayments of $20,285.33 and a total loan cost of $1,651,359.70.
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Types of $2 million business loans
You have a wide range of options when it comes to $2 million business loans, even though loans of this amount are typically on the higher end. Which option is best for you depends on your business and its needs.
Business term loan
A term loan gives you a lump sum of financing, which you repay plus interest and fees over a set term — usually from seven to 25 years for a $2 million loan. It’s meant to cover a one-time business expense and typically requires collateral for loan amounts of this size.
Consider using a term loan if …
- You want to cover a one-time expense
- You have $2 million in business assets to use as collateral
- You and your business partners have excellent credit
Consider other options if …
- You need to pay for unpredictable expenses
- You have less than $2 million in business assets
- You or another business partner have poor credit
Business line of credit
For an ongoing project where you need access to cash, a business line of credit makes more sense. It allows you to draw from a $2 million credit line as needed — and you only pay back what you borrow. These tend to also have rigorous credit standards and are typically secured by your business assets.
Consider using a line of credit if you …
- Need to fund an ongoing project
- And your business partners have excellent credit
- Have collateral to back a $2 million credit line
Consider other options if you …
- Want to fund a one-time project
- Or another business partner have poor credit
- Don’t have enough assets to put up collateral
Equipment financing
Equipment financing is a term loan backed by the equipment you buy. You typically need to make a down payment of around 20% to qualify. And your loan amount is based on the value of the item you’re purchasing.
Consider equipment financing if you …
- Need $2 million in equipment
- Are prepared to make a down payment
- Have all your other costs covered
Consider other options if you …
- Want to fund more than new equipment
- Lack the funds for a down payment
- Don’t want to use your equipment as collateral
Bottom line
Though not as common as small-dollar business loans, it’s still possible to find $2 million in financing from the standard providers: banks, credit unions and online lenders. But you might have trouble qualifying for a competitive rate if you don’t have good credit or high-enough revenue to afford the five-digit repayments.
You can learn more about how it all works by reading our guide to business loans.
Frequently asked questions
What $2 million business loans are available without collateral?
You might be able to find a $2 million business loan that doesn’t require collateral if you have excellent credit and high revenue. But you and your business partners still might be required to sign a personal guarantee, meaning you’re responsible for repaying the loan if your business can’t.
