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. Compare providers to make sure you’re getting the most competitive rates and terms before you apply.
Where to get a $500,000 business loan
Most lenders offer $500,000 business loans, including banks, credit unions and online lenders. Established businesses might find more competitive rates on a business loan of this size with a large national bank. Newer businesses might want to try applying with alternative online lenders and SBA loan providers.
Compare $500,000 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 clicking More info.
{"niche":"USFBL"}
1 - 5 of 5
Updated regularly
What types of $500,000 business loans are available?
Business loans for $500,000 cover a wide range of funding needs. Here’s a list of the most common types.
| Type of financing | Description | Use |
|---|---|---|
| Short term 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 up to 10 years | To provide working capital for more established businesses |
| Business line of credit | A revolving line of credit for ongoing needs | To tap into funds as needed and pay off as you go |
| Business cash advance | A quick turnaround loan for newer businesses | To borrow against the money you plan to make |
| Accounts receivable financing | A loan with an amount tied to your receivables | To access cash by selling your purchase orders or receivables |
| SBA loan | A low interest small business loan partially backed by the government | To provide working capital to grow your business |
| Startup loan | A term loan for businesses with limited credit history | To provide working capital to get your business off the ground |
| Equipment financing | A collateralized term loan to fund equipment | To pay for any kind of equipment for your business |
| Business credit card | A revolving line of credit for ongoing needs | To tap into funds as needed and pay off as you go |
Secured vs. unsecured business loans for $500,000
Business loans can either be secured or unsecured. Most $500,000 business loans require some kind of collateral — especially if it’s an equipment loan or for commercial real estate. However, it’s possible to get an unsecured business loan of $500,000 from select online lenders.
Typically, you’ll need a higher credit score and stronger business financials to qualify for an unsecured business loan. You also might need to prove more business experience, requiring at least two years of experience for approval.
How to qualify for a $500,000 business loan
While a $500,000 business loan is below the average borrowing amount of $660,000, it’s still a big enough amount that your small business might have difficulty qualifying if you’re just getting started.
To qualify for a business loan of this size, you and your business must typically meet criteria the following criteria:
- At least one year 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.
- Minimum monthly revenue. A general rule of thumb is that lenders will loan you 1x to 1.5x of your monthly revenue. If you earn $500,000 a month, that means you could potentially borrow between $500,000 to $750,000.
- Good personal credit. Business lenders often rely on personal rather than business credit scores. You generally need a credit score of 670 or higher, although 775 and up is better for a $500K loan. To compare top options for good credit borrowers, check out our guide.
- A personal guarantee. It’s also common for lenders to ask for a personal guarantee from the business owner(s) — especially for unsecured loans that aren’t backed by collateral.
How much does a $500,000 loan cost?
Since $500,000 business loans tend to have tight credit requirements, you can likely qualify for a competitive rate if you can qualify for this loan.
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. This doesn’t include SBA loan fees, which vary depending on the loan.
Loans of this size also typically come with a loan 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.
Business loan calculator
See how much you'll pay
Your loan |
|---|
| Loan amount |
$ |
| Loan terms (in years) |
| Interest rate |
% |
Fill out the form and click on “Calculate” to see yourestimated monthly payment.
or
Compare business loans now
You can expect to pay back$per month
Based on your loan terms
| Principal | $ |
|---|---|
| Interest | $ |
| Total Cost | $ |
How do payments on a $500,000 loan work?
It depends on your loan. Most $500,000 loans are term loans, which come with fixed monthly repayments. Some short-term business loans come with biweekly, weekly or even daily repayments, though short-term loans in such a high amount aren’t common.
If you apply for a merchant cash advance, you’ll repay it with a percentage of your business’s daily sales. And if you get an advance on your unpaid invoice with invoice factoring, you won’t repay the factoring company at all — you just won’t get your invoice’s total value.
How to get a $500,000 business loan
The application process varies depending on the lender you end up with. But you’ll generally follow these steps to find a lender that fits your business’s needs and apply for a $500,000 loan.
- Determine the type of loan you need. Before you start comparing, decide what type of loan you need. If you’re funding a one-time cost, look for a term loan. If you have ongoing expenses, look for a line of credit with a limit of $500,000 or higher.
- Compare lenders. Find and compare lenders that offer $500,000 loans by looking at the loan’s APR, terms and requirements. Also, do you need the money right now, or would you prefer to do more research first? Online lenders can get you funding fast, while banks tend to offer less expensive loans.
- Check your eligibility. Online lenders often have a form you can fill out online to find out if you’re eligible and check your rates. But if you’re applying through a bank, you might have to call in to make sure your business is eligible for a $500,000 loan before you apply.
- Gather the required documents. It helps to have your personal and business tax returns, profit and loss statements, and bank statements ready when you first fill out the application to help answer questions. You might also need to submit these documents digitally or physically.
- Fill out the application. This can take a few minutes to over an hour, depending on the lender and type of loan.
- Submit any additional information. Your lender will review your application and reach out for more information or documents if needed. Usually, you can submit these online, by mail or in person at a branch.
- Read and sign the contract. Review your final offer, making sure the rates, terms and monthly payments fit your business’s budget. If you agree, sign and submit your contract.
The turnaround time on $500,000 loans is often longer than loans of smaller amounts — lenders tend to be more thorough with your application. While some lenders advertise a 24-hour turnaround time, receiving your funds could take a few business days to a week.
Can I get a $500,000 SBA loan?
Loans backed by the Small Business Administration (SBA) offer low rates and high loan amounts to businesses that have a hard time qualifying elsewhere. But they also come with some of the highest rejection rates in the market.
Can I get a $500,000 business loan with bad credit?
It’s possible to find $500,000 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. Generally, term loans of this size are not available to business owners with bad credit.
Can I get a $500,000 loan to start a business?
Yes, but it’s rare for a startup or new business to qualify for high-dollar amounts at competitive rates. For other options, start with our comprehensive guide to startup loans.
Bottom line
You’ll typically need good credit and at least a year in business to get approved for a business loan of this amount, even with a secured loan.
To compare lenders and get prequalified, see our guide to the best business loans. To learn more about business loans first, check out our comprehensive guide to business loans, where you can learn more about the nuances of business financing.
Other business loan amounts:
- 10 million
- 5 million
- 3 million
- 2 million
- 1 million
- $600,000
- $300,000
- $250,000
- $100,000
- $50,000
- $40,000
- $30,000
- $20,000
- $15,000
- $10,000
I've got a solid grip on business loans and financing options. For instance, let's start with the various types of loans mentioned in the article:
- Short-term loan: Typically used for unexpected expenses or surviving a downturn, this unsecured lump sum loan offers repayment terms up to 18 months.
- Business term loan: This unsecured lump sum loan, with repayment terms extending up to 10 years, is often used for established businesses seeking working capital.
- Business line of credit: Offers a revolving credit line for ongoing needs, allowing businesses to tap into funds as necessary and pay off the balance as they go.
- Business cash advance: Quick turnaround loans catering to newer businesses, allowing them to borrow against projected income.
- Accounts receivable financing: Tied to receivables, this loan type allows access to cash by selling purchase orders or receivables.
- SBA loan: A government-backed low-interest small business loan, assisting businesses in obtaining working capital for growth.
- Startup loan: Aimed at businesses with limited credit history, providing capital to launch operations.
- Equipment financing: Collateralized term loan specifically for funding business equipment purchases.
- Business credit card: A revolving line of credit, convenient for accessing funds when needed.
When discussing these loans, the article points out the distinction between secured and unsecured loans, emphasizing that while many $500,000 business loans require collateral, some online lenders do offer unsecured loans of this magnitude. However, these usually necessitate a higher credit score and robust business financials, sometimes requiring at least two years of business experience for approval.
Qualification for a $500,000 loan typically entails specific criteria: a minimum of one year in business, a minimum monthly revenue proportional to the loan amount (around 1x to 1.5x), good personal credit (ideally 670 or higher), and a personal guarantee, especially for unsecured loans.
Regarding costs, $500,000 loans often come with competitive rates, roughly around 10% APR depending on the business's financials and creditworthiness. SBA loans, for instance, cap rates at the prime rate plus a certain percentage, varying by loan term.
Repayment structures vary based on the loan type. Most $500,000 loans are term loans with fixed monthly repayments, while merchant cash advances are repaid via a percentage of daily sales, and invoice factoring advances entail not receiving the total invoice value.
The application process involves steps such as determining the required loan type, comparing lenders, checking eligibility, gathering necessary documents (like tax returns and financial statements), filling out the application, and reviewing/signing the contract.
Finally, regarding specific questions, getting a $500,000 SBA loan is possible but might encounter higher rejection rates, especially with new businesses or those with bad credit. Competitive rates for this loan amount generally necessitate good credit and at least a year in business, even for secured loans.
Feel free to ask about any specific loan type or aspect you want to delve deeper into!
