How much income do I need for a 500k business loan?
Whether you need a long-term loan, a line of credit or a business cash advance, $500,000 loans come in many flavors. But you generally need to be in business for one to two years with a minimum monthly revenue of $350K to qualify.
To afford a $500,000 house, you typically need an annual income between $125,000 to $160,000, which translates to a gross monthly income of approximately $10,417 to $13,333, depending on your financial situation, down payment, credit score, and current market conditions.
Securing business loans with no revenue can be challenging but not impossible. Lenders may consider factors like personal credit score, business plan, industry experience, and collateral. Options include personal loans, business credit cards, microloans, or crowdfunding.
A $400,000 business loan comes in many forms, from lines of credit to term loans, and you'll have several options to suit a range of credit scores. Generally, you'll need at least a couple of years in business and to make over six figures to qualify, though eligibility varies by lender.
Lenders typically have a set of revenue requirements when approving a business loan. These thresholds vary by lender and the type of loan you're applying for, however, a common benchmark is an annual revenue of at least $50,000.
You generally need a credit score of 670 or higher, although 775 and up is better for a $500K loan.
As noted above, your estimated monthly payment for a $500K mortgage will be $3,360.16, assuming a 30-year loan term and an interest rate of 7.1%. But this payment could range between $2,600 and $4,900 depending on your term and interest rate.
Typically, lenders look for businesses with a strong credit history, profitable operations, and a minimum of one to two years in business. Specific requirements can vary by lender but generally include a detailed review of financial statements, business tax returns, and personal tax returns of the business owners.
Reasons you may be disqualified from a small business loan include a low credit score, poor cash flow, no collateral, significant debt, a bad business plan or having a business in a risky industry.
How much can I realistically get for a small business loan? This varies widely based on your qualifications and the lender's terms. Generally, you could secure anywhere from $5,000 to $5 million.
What is average amount of a first time business loan?
Per the Federal Reserve's latest report, the average small business loan amount is approximately $663,000.
- National Funding: Best for early payoff discounts.
- QuickBridge: Best for loan variety.
- Funding Circle: Best for flexible repayment terms.
- Fundbox: Best for startups.
- American Express Business Blueprint: Best for low revenue requirements.
| Lender | Average small business loan amount |
|---|---|
| Bank loans (small regional bank) | $146,000* |
| SBA 7(a) loans | $479,685 |
| Online loans | $5,000 to $500,000 |
| Short-term loans | $5,000 to $750,000 |
Microloans. Microloans are loans of up to $50,000 that can help startups tackle small funding needs. Because they are geared toward startup businesses, they may not have revenue requirements to apply. Microloans are available from the SBA, as well as other government, nonprofit and peer-to-peer agencies.
Annual revenue and operating income - Lenders will consider how much revenue your business brings in. Higher revenue might help a borrower's chance of approval, though it has to be balanced with the amount of debt and the net income for the business.
Operational expenses are a common use of small business loans. Payroll is also a revenue-generating activity, since your business depends on your employees to provide the goods and services your company sells. You can use a business loan for your payroll costs, including: Salaries, wages, commissions, and bonuses.
Since many lenders don't want more than 28% of a person's income to go toward their mortgage debt, borrowers will generally need an annual combined household income of at least $120,000 to buy a $500,000 house.
You'll generally need a credit score of at least 500 and at least one year in business to qualify. You'll also need to meet minimum monthly revenue requirements and may be required to pledge collateral to back the loan.
A down payment for an SBA 7(a) or 504 loan ranges from 10 percent to 20 percent. For loans from banks, credit unions and alternative lenders, you may see down payment requirements that range from 10 percent to 30 percent — and some lenders that don't require any down payment.
Your estimated monthly repayment for a $500,000 principle-and-interest home loan would be around $3000 for a 30-year loan with an interest rate of 6%, if you have no debt complications. Keep in mind that your monthly repayment depends on factors like interest rate, loan term, taxes and insurance.
How much a month is a million dollar loan?
You can expect to spend around $6,653 a month with a 30-year mortgage term and $8,988 a month with a 15-year term. This assumes you have a 7% interest rate (and doesn't take into account property taxes, mortgage insurance, and property insurance).
| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|---|---|
| $10,000 | 5 | $207.54 |
| $15,000 | 3 | $466.52 |
| $15,000 | 5 | $311.67 |
| $20,000 | 3 | $617.45 |
How much of a business loan you can get depends on your business's annual gross sales, creditworthiness, current debts, the type of financing, and the chosen lender. In general, lenders will only provide loans up to 10% to 30% of your annual revenue to ensure you have the means for repayment.
Your capacity to repay
You might also need to show business and personal assets, as well as cash reserves. Lenders often want to know about your business's capital assets, such as cash and equipment, and about any funds that others have invested in your business.
20% minimum down payment. Lower mortgage rates than many mortgages. No mortgage insurance. Expect to need a minimum credit score of 620+
