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$3 million business loans
You'll have an easier time qualifying if you have strong credit and high revenue.
Finding a business loan over $1 million can be tricky for some small businesses. However, it’s not impossible if you have strong credit and make enough revenue to afford repayments in the mid-five digits.
Going with a lender you already have a strong relationship with can help you qualify. But you also might want to reach out to online or SBA lenders to make sure you’re getting the best deal out there.
What's in this guide?
Our top pick: National Business Capital Business Loans
- Approvals within 24 hours
- No industry restrictions
- High approval rate
- Startup financing options
Our top pick: National Business Capital Business Loans
- Min. Loan Amount: $10,000
- Max. Loan Amount: $5,000,000
- Requirements: Your company must have been in business for at least 6 months and have an annual revenue of at least $100,000.
Compare $3 million business loans
Updated December 6th, 2019
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Where can I get a $3 million business loan?
You can get a $3 million business loan from a bank, credit union or online lender. Bigger banks tend to offer larger loan amounts, though they can be more difficult to qualify with than a local option. But if you currently have a good relationship with a bank, that could help your application and even speed up the process.
With online lenders, your options are slimmer — many only offer funding up to $100,000. While they can be more expensive, the process is typically faster and less involved, making them a good choice if you don’t have the time to spend on an application.
How can I qualify for a $3 million business loan
Eligibility requirements will vary by lender and the type of financing you’re applying for. But in general, you need to have strong personal credit, high enough revenue to afford repayments and significant collateral to qualify for a $3 million business loan.
Ask an expert: How can I increase my chances of qualifying for a high-dollar business loan?
Thomas Ulbrich
Executive Director of the University of Buffalo School of Management’s Center for Entrepreneurial Leadership
You can maximize your chances of qualifying a few different ways. First and foremost, lenders want to see a solid credit history and strong financials.
You’ll also want to have a written business plan that shows how the loan will be used and how it will scale the business. This document should show reasonable financial projections — especially the ability to generate increased cash flow that will show your ability to repay the loan.
It should also discuss your company history and team. A strong team that has a history of past successes can be the assurance a bank sometimes needs to be confident in a company’s ability to actually execute the written plan it’s presenting.
If the loan is being used to purchase something that has high collateral value, you’ll likely have an increased chance of getting a larger loan.
For instance, if you need to borrow $3 million for a specialized piece of equipment that will enable you to grow your business, the bank may be able to offset part of their risk due to the collateral value of the equipment that they would control if you were unable to pay back the loan.
How much will a $3 million business loan cost?
It depends on your business, the lender and the type of loan you get. But you can typically expect monthly repayments well into the five digits.
Loans of this size also generally come with longer terms — from 10 to 25 years — though it’s possible to find shorter options. And they tend to come with relatively low rates, since most lenders require you to have excellent credit and high revenue to qualify.
If you took out a $3 million loan at a 9% APR with a 10-year term, you would have monthly repayments of $38,002.73 and pay a total of $1,560,327.86 in interest.
Let’s take a look at an example …
Jorges owns an online retail business and needs $3 million to expand to a new office. He decides to go with a standard business term loan, since he has several miscellaneous expenses and enough assets to provide collateral.
He previously applied with his bank and was denied. So he decides to go with SmartBiz, which speeds up the process of applying for a government-backed SBA loan — even though it costs a little more. Here’s how his offer breaks down:
- Interest rate: 7.75%
- Term: 20 years
- SBA guarantee fee: $81,875
- Referral fee: $40,000
- Packaging fee: $40,000
- Bank closing fee: $450
This means Jorges is on the hook for $162,325 in closing costs, which his business can afford to pay up front. After that, his loan costs $24,628.46 a month and he’ll pay a total of $2,910,829.66 in interest.
4 types of $3 million business loans
Most types of business loans go up to $3 million. But you might not have the same selection of lenders if you were to borrow a lower amount — especially if you’re looking online.
Business term loan
A business term loan works by giving you a lump sum of money you repay in monthly installments — plus interest and fees. It’s meant to cover a one-time expense and is usually only available in such high amounts if you have excellent personal credit and a high enough revenue to afford the repayments. For loans of this size, most lenders require you to back the loan with business or even personal assets.
Consider a term loan if …
- You want to fund a one-time purchase.
- You have collateral to back your loan.
- You and your business partners have excellent credit.
Consider other options if …
- You have ongoing costs.
- You’re struggling with cash flow.
- You or another business partner have poor credit.
Business line of credit
One of the most popular types of business financing along with term loans, a line of credit is designed to fund an ongoing project. Instead of borrowing $3 million at once, it allows you to withdraw funds as you need them — up to a credit limit of $3 million.
Depending on the lender, each withdrawal either turns into a term loan or you repay the balance with a minimum monthly repayment — similar to a credit card. This option also tends to have strict credit and collateral requirements, especially at larger banks.
Consider a line of credit if …
- You have ongoing costs that are hard to predict.
- You have seasonal ups and downs.
- You and your business partners have excellent credit.
Consider other options if …
- You only need a one-time loan.
- You don’t have collateral.
- You or another business partner have poor credit.
SBA loans
The Small Business Administration (SBA) partly backs loans to make affordable funding available to businesses that have tried and failed to get financing elsewhere. The SBA 7(a) program offers loans for working capital, debt consolidation and real estate in amounts as high as $3 million. And the 504 program offers funding to buy property, real estate and equipment.
These loans come with lower rates than you might find elsewhere. But it takes a lot of time and effort to apply. And the program is highly competitive — only 52% of applicants were approved in 2018, according to a survey by the Federal Reserve.
Consider an SBA loan if …
- You have time to invest in a long application.
- You’ve struggled to qualify for funding in the past.
- Cost is your top priority.
Consider other options if …
- You haven’t struggled to find funding elsewhere.
- You don’t have the resources to spend on a long application.
- You need funding fast.
Equipment or vehicle financing
Many lenders offer specialized financing to purchase machinery or vehicles for your business. How much you can borrow depends on the value of the vehicle or equipment you’re buying — you can usually finance between 80% and 100% of the cost. These loans use the vehicle or equipment you’re buying as collateral, so you don’t need to have $3 million in assets up front.
Consider equipment or vehicle financing if …
- You need financing specifically for vehicles or equipment.
- You can afford to make a down payment.
- You don’t have assets to apply for a term loan.
Consider other options if …
- You also need funding for other purposes.
- You can’t afford a down payment.
- You want to fund ongoing expenses.
Bottom line
You have a variety of financing options to choose from when you’re looking to borrow $3 million for your business. Just keep in mind that not as many lenders offer loans of this size — especially if you’re looking online. You can learn more about how it all works and compare lenders with our guide to business loans.
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