How to Get a Small Business Loan in Arkansas
If you’re a small business owner in The Land of Opportunity or wish to become one, small business financing can come in handy. In this blog post, explore the types of small business loans available in Arkansas and explain how you can use them.
How Can You Use an Arkansas Business Loan?
In a perfect world, you’d have unlimited amounts of cash at your disposal. Since this is unlikely to be the case, a small business loan in Arkansas can provide you with the capital you need. You can use it to cover the following business expenses.
- Commercial real estate or office space
- Debt refinancing
Types of Small Business Loans in Arkansas
When you shop for small business loans in Arkansas, you’ll find a variety of loan options. While some loans are easy to qualify for, others come with more stringent requirements. Your unique business and goals will determine the ideal financing solutions.
Small Business Loans
Business loans are installment loans offered by banks, credit unions, and online lenders. You receive a lump sum of money at once and repay what you borrow via fixed monthly payments.
In most cases, term loans range from pay off times of a few months to several years or even longer.
Business Credit Cards
Business credit cards work just like personal credit cards. You can use them to pay for day-to-day expenses up to a set credit limit, which will be based on your credit score. Fortunately, most business credit cards will reward you with cash back, airline points, merchandise, gift cards, and other perks.
While equipment is expensive, it’s usually required to run your business successfully. Equipment loans are intended to help you pay for various types of equipment, like computers, ovens, or bulldozers. Depending on the lender, you may receive funding for 80% to 90% of the total cost of the equipment, meaning you’ll be on the hook for the remaining 10% to 20%.
Invoice factoring might be a good option if you have many unpaid invoices from your customers and are short on cash.
Once you qualify, you’ll sell your invoices to a factoring company at a discount. Then, they’ll collect the payments for you and send you the remaining amount minus a factoring fee. Invoice factoring is fast and convenient but can be costly.
Compared to other loan types, microloans come with smaller loan amounts, typically under $50,000. If you’re a startup or newer business, you may find microloans easier to obtain than traditional financing options. They’re usually offered through the SBA and nonprofit organizations. Some microlenders even offer tools and resources to help your business thrive.
Merchant Cash Advance
If you receive credit card and debit card payments from your customers, a merchant cash advance may be worth considering. The lender will give you cash in exchange for a percentage of your card sales. Then, you’ll repay the advance via percentage of your daily sales or fixed withdrawals from your business bank account.
Resources for Arkansas Business Owners
If you own or manage a small business in Arkansas, it’s a good idea to explore these resources.
- Arkansas Small Business and Technology Development Center (ASBTDC): ASBTDC is a higher education-based program that provides assistance to all types of businesses. You can enroll in one-on-one confidential consulting for free or participate in one of its affordable educational events.
- The Venture Center: The Venture Center promotes entrepreneurship in Central Arkansas. It offers accelerator programs, virtual and in-person events, mentorship, and connections to investors.
- Arkansas Procurement Technical Assistance Center: With some help from the Arkansas Procurement Technical Assistance Center, your business can obtain government contracts. This organization provides one-on-one counseling and group trainings.
- Startup Junkie: Startup Junkie’s mission is to “improve lives through innovation and entrepreneurship.” It offers free consulting, events, and programs as well as access to talent and capital.
- The Conductor: The Conductor is a partnership between the University of Central Arkansas and Startup Junkie. Its Makerspace is a collaborative workplace open to anyone and complete with 3D printers, routers, training classes, mentors, and more.
Conclusion: Shop for Business Loans in Arkansas
Whether you’d like to turn your dream of owning a small business into a reality or grow your current venture, seeking Arkansas business loans can provide you with access to working capital. Take the time to research all of your options so that you can make the most informed decisions for your unique situation.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.