Are you ready to join the 900,000+ small businesses in Ohio? You will need some capital to get started.
Or maybe you have an existing business in Ohio and are looking for a little extra capital to help you grow your business by recruiting help, investing in marketing, or buying real estate.
Do not worry. There are small business loans for every situation and every credit profile.
How a Loan Can Help Your Ohio Small Business
Small business owners know that it takes money to make money. If you’ve started your business, you know that there have always been things that could have been better or easier if you had just had a little extra cash.
Taking out a business loan can help you achieve profitability faster, serve your customers better, or offer more products. If you use it to hire helpers, you can focus on running your business while your employees fill orders and handle customer service. If you’re short on space, a loan can help you move into a larger property. Or if you borrow money to place large inventory orders, you can buy more products for a lower price.
It’s important to note that if your business is in trouble, while it may seem like taking out a loan could solve your problems, in the long run you will have racked up more debt on top of the financial challenges you have. The best time for a loan is when your business is booming, as counterintuitive as that may sound.
Best Small Business Loan Options For Ohio Businesses
Here’s where you’ll need to do a little homework to determine which business loan options are best for you. There are many different types of loans and dozens of different lenders, each offering slightly different benefits.
There are banks all over Ohio that offer working capital loans for businesses. You usually need to have good credit and have been in business for at least two years to qualify. If you qualify, these offer some of the lowest rates on the market.
The Small Business Administration in the United States has several SBA loan programs that also offer low interest rate loans. These include its 7 (a) program, microcredit program, and other loans for minority businesses and economic development.
You can find out more about eligibility for SBA loans at SBA.gov.
Another option to consider is a line of credit. Rather than getting the full loan amount you qualify for, you can borrow up to that limit and pay it back, keeping the line open for as long as you need.
Short term loan
If you don’t have good credit, short term loans are an option to consider. Note that these have higher interest and must be repaid quickly, sometimes in just a few months.
How to get a small business loan in Ohio
Borrowers looking for business financing have several options. You can go directly to the bank or lender, or you can work with a few different organizations in Ohio that offer technical assistance and resources for small businesses, including helping you create a business plan and complete your loan application.
The Ohio Development Services Agency has several resources for small businesses and can help you start and grow a minority business, as well as apply for federal contracts.
Small Business Development Centers are located statewide and can help you with financial projections that SBA lenders and others may need for small business financing. They also offer workshops and training to help your startup or small business.
How to Choose the Right Loan Option for Your Ohio Small Business
With so many loan options for entrepreneurs, how do you choose the best one?
The key is to define what you want the funding for. If you need a lump sum to, say, buy real estate, a commercial real estate loan would be ideal. If you prefer to have access to funds and use them as needed, a line of credit may be preferable. And if you just need the ability to make purchases for your business, look at business credit cards.
How To Qualify For A Small Business Loan In Ohio
Once you’ve decided on the loan option that’s right for you, make sure you’re eligible for it. Eligibility requirements are different for different types of loans, and there are a few things that will determine the interest rate you qualify for.
As a general rule, the higher your credit scores, the better the loan terms you will qualify for. Banks and SBA lenders generally want you to be in business for at least two years. If you don’t meet these criteria, you can opt for short-term loans or cash advances to traders, which consider annual income instead.
Ready to expand your business in Ohio?
Whether you live in Columbus, Toledo, Cincinnati, or anywhere else in Ohio, you don’t have to go it alone to grow your business. With so many loan options from banks, the federal government, and online lenders, you just have to choose the loan that’s right for your needs.
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