If you’re deciding to take on a $200,000 business loan, you’ll have a wide range of options, from lines of credit and term loans to 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.
Where to get a $200,000 business loan
Most lenders offer $200,000 business loans, including banks, credit unions and online lenders. Established businesses might find more competitive rates and terms with large national banks on this size of business loan. Newer businesses may receive better terms from alternative online lenders and SBA providers.
Compare $200,000 business loans
Select your time in business, annual revenue and credit score ranges to find lenders you might qualify with. Select Go to site to get started on your application. Or, visit our review page by choosing More info.
What type of $200,000 business loans are available
Business loans that finance up to $200,000 for your business can cover the following:
Type of financing
Description
Use
Short-term business 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 of up to 10 years
To provide working capital for more established businesses
Business line of credit
A revolving line of credit for ongoing expenses
To tap into funds as needed and pay off as you go
Merchant cash advance
A quick turnaround loan for newer businesses or those with bad credit
To borrow against your future credit card sales
SBA loan
A low interest small business loan partially backed by the government
To provide working capital to grow your business
Equipment financing
A collateralized term loan to fund equipment
To pay for any kind of equipment for your business
Inventory factoring/Inventory financing
A loan secured by businesses’ inventory
To free up cash tied to inventory.
Commercial real estate loans
Loans for purchasing property for business use
Businesses looking to buy, refinance or develop commercial property.
Franchise loans
Specifically for purchasing a franchise
Business owners looking to buy a new franchise.
Secured vs. unsecured business loans for $200,000
When considering secured versus unsecured loans, it’s important to note that secured loans require collateral, making them easier to qualify for. A borrower seeking a secured loan must have some type of asset that can back the loan, which goes through an appraisal process.
Unsecured loans may be a challenge for those with lower credit scores to qualify for, since the lender is taking on more risk. You may also face higher interest rates.
How to qualify for a $200,000 business loan
While a $200,000 business loan is 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:
Good personal credit. A decent personal and business credit score of around 625 to 680 or higher.
Proof of annual and monthly revenue. As a rule of thumb, lenders will loan you 1x to 1.5x of your monthly revenue.
At least six months in business. Most lenders require you to be in business for one to two years. You might get away with six months in business for smaller amounts, but lenders tend to require stronger business experience for larger loans.
A business plan or loan proposal. A business plan shows your lender how you’ll be bringing in revenue.
A personal guarantee. The lender may also ask you for a personal guarantee, especially for unsecured loans not backed by business assets.
How much does a $200,000 business loan cost?
Depending on your business’s financials and your credit, you can expect an APR on the lower end of the spectrum of 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. However, in 2024, the SBA states that upfront fees for a loan of $1 million or less will be 0%.
Loans of this size also typically come with a 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.
Most $200,000 loans are term loans with fixed or 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.
The specific repayment structure depends on the loan type and lender of your choice. Even for SBA loans, there are predetermined ceilings to which different lenders can raise interest rates, but the loan’s terms depend on the institution offering the SBA loan.
The application process for a $200,000 loan varies by lender but generally involves the following steps:
Determine the type of loan you need. Whether it’s a term loan for one-time costs or a line of credit for ongoing expenses.
Compare lenders offering $200,000 loans. Consider factors such as APR, terms, and funding speed.
Check your eligibility. This may involve filling out an online form for online lenders or contacting a bank directly.
Gather the required documents. This includes personal and business tax returns, profit and loss statements, and bank statements.
Fill out the application. This can take from a few minutes to over an hour, depending on the lender and loan type.
Submit any additional information. Then review and sign the loan contract once approved.
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 weeks.
Can I get a $200,000 SBA loan?
You can opt for a $200,000 SBA loan. These loans offer low rates and higher amounts to business owners who struggle to qualify with other private lenders. But the process is very competitive, and many applicants don’t walk away with an approved loan. Usually, the higher the loan amounts, the more annual revenue you need to qualify.
Can I get a $200,000 loan with bad credit?
You can secure $200,000 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. But prepare to pay more in fees and interest if you get a bad credit business loan.
Can I get a loan for $200,000 to start a business?
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 working with startups seeking this amount. While some lenders may provide rapid funding, traditional banks may have a more rigorous application process and longer turnaround times. 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.
To receive 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. To compare lenders and get prequalified, see our guide to the best business loans.
Dhara Singh is a freelance personal finance writer at Finder specializing in loans. Formerly she was a top 10 journalist at Yahoo Finance with more than 38+ million content views where she covered retirement and mortgages. She has also written for Bankrate, and CNET and continues to write for a variety of outlets, such as Investopedia and Worth magazine. Her articles focus on equipping readers with the right information and data so they can make the most informed decisions related to their finances.
Dhara previously worked as an insights analyst for Finder’s PR team, where she started the Deadliest Cities to Drive series in 2018, connecting interesting data analysis to a suite of car insurance products. When she’s not writing, Dhara coaches small business owners through her Stories to Sales programs and empowers them to use their life experiences to help other people. She has also self-published a poetry book on Amazon called Tell her She’s Lovely.
Dhara holds a B.S. in Finance and Supply Chain Management from Rutgers University and a M.S. in Journalism from Columbia University.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
