You can get a $3 million business loan from a bank, credit union or online lender. Small business owners who need a loan this size might want to look at SBA lenders, which offer government-backed loans that don’t require as much collateral. Or, if you currently have a good relationship with a bank, that could help you qualify and even speed up the process.
Many online lenders don’t offer funding up to $3 million, but a few do. These loans are often more expensive than bank or SBA loans, but the process is typically faster.
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The application process varies depending on the type of lender and financing. But you can generally follow these steps to apply for a $3 million business loan.
Eligibility requirements 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.
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.
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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.
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.
A great option if …
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.
A great option if …
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.
A great option if …
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.
A great option if …
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. Get started on your search by reading our guide to business loans.
Can I get a $3 million business loan with no collateral?
It’s possible if you have strong enough revenue and a near-perfect credit score. But most lenders require all business owners to make a personal guarantee on the loan, where you agree to cover the repayments yourself if your business falls through.
Some exceptions to this are equipment and vehicle financing or alternative loans like invoice factoring and financing or a merchant cash advance based on future revenue.
How do I know what type of loan is right for me?
First, think about what you need the funds for and what your priorities are. Use this information to decide on the type of loan and lender that makes the most sense. Then, compare lenders you can qualify with to narrow down your choices and find one that best meets your needs.
Can I get a $3 million loan to start a business?
It’s possible if you have enough personal assets to back it. But generally startup loans don’t run in amounts that high — and can be costly. Visit our guide to startup loans to learn about your other startup financing options.
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