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$2 million business loans
Where to find funding to buy equipment, grow your business and more.
You have a wide range of options when it comes to $2 million business loans, though not all lenders offer funding this large. While you’ll have better luck qualifying if you have collateral, there are a few options like equipment financing and invoice factoring that don’t require you to already have $2 million in business assets. Generally, you need excellent credit and a high-enough revenue to afford five-digit monthly repayments to qualify.
Our top pick: Lendio
- Quick turnaround
- Secure online application
Our top pick: Lendio
- Min. Loan Amount: $500
- Max. Loan Amount: $5,000,000
- Requirements: Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.
What's in this guide?
Compare $2 million business loans
Updated April 7th, 2020
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Where can I get a $2 million business loan?
You can get a $2 million business loan from a bank, credit union or online lender. Banks and credit unions typically have high credit requirements and can be more difficult to qualify with than an online lender unless you already have an existing relationship.
While online lenders have a higher rate of approval and faster turnaround, they also tend to offer higher interest rates.
How can I qualify for a $2 million business loan?
While eligibility requirements will vary by lender and the type of financing you’re interested in, you typically need to meet the following criteria:
- In business for a few years
- Strong personal credit
- High monthly revenue to afford repayments
- Collateral to back the loan
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. You can 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.
Let’s take a look at an example…
Sonia owns several bakery franchises. She plans to expand to a third location and needs funding to buy new equipment. She doesn’t have the money up front, so she decides to take out an equipment loan for $2 million, which covered 80% of her equipment costs.
After comparing her options, she settles on ApplePie Capital because it’s one of the few business lenders that specializes in franchise financing. Here’s how her loan breaks down:
- APR: 8% — including a 3.5% origination fee
- Origination fee: $70,000
- Loan term: 7 years
- Down payment: $500,000
This gave her monthly repayments of $31,172.43 and a total loan cost of $618,484.02.
5 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. This 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.
- You and your business partners have excellent credit.
- You have collateral to back a $2 million credit line.
Consider other options if …
- You want to fund a one-time project.
- You or another business partner have poor credit.
- You don’t have enough assets to put up collateral.
SBA loans
The Small Business Administration (SBA) partially backs loans to make competitive rates available to small business owners who’ve struggled to get financing elsewhere. The two most popular programs offering $2 million loans include:
- SBA 7(a) program. General-use funding for a wide range of projects — from working capital to refinancing business debts.
- SBA 504 program. Financing to purchase equipment, real estate or other types of properties.
It’s a longer, more involved application process than most loans. It also has the lowest approval rates of any other type of financing, thanks to a long list of eligibility requirements.
Consider an SBA loan if …
- You have time to spend on a long application process.
- You’ve been rejected for funding in the past.
- You’re looking for a competitive rate.
Consider other options if …
- You need funding fast.
- You haven’t recently applied for business financing.
- Cost is not your top priority.
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.
- You’re prepared to make a down payment.
- All of your other costs are covered.
Consider other options if …
- You want to fund more than new equipment.
- You lack the funds for a down payment.
- You don’t want to use your equipment as collateral.
Invoice factoring and financing
Invoice factoring and financing allow struggling businesses to sell or borrow against unpaid invoices from businesses or government contracts. It’s a cashflow solution that allows you to carry out your projects before you get paid.
Your credit and business finances don’t always factor into the application, but it’s not cheap. Invoice factoring and financing often cost more than any other option on this list.
Consider invoice financing or factoring if …
- You have over $2 million in unpaid invoices.
- You can’t qualify for other types of financing.
- You need funding fast.
Consider other options if …
- You don’t rely on invoices.
- You can qualify for a less expensive loan.
- You have time to spend on lengthier applications.
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.
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