How to Get a Small Business Loan in Massachusetts
If you are part of a small business in the Bay state or have plans to start one, small business loans should be on your radar as they can help you cover various business-related expenses. This blog post will explain everything you need to know about small business loans in Massachusetts.
Common Uses for Small Business Loans in Massachusetts
No matter where you are in your small business journey, small Massachusetts small business loans can help you out. You may use them to pay for startup costs, like commercial property, incorporation fees, marketing, payroll, and taxes. If your business is established, a small business might be just what you need to expand your products or services or open up new locations in Massachusetts or other states.
Types of Small Business Loans in Massachusetts
When you search for small business loans in Massachusetts, you’ll find no shortage of options. Remember that the lending institution and type of loan you choose will determine the eligibility criteria and application process. Some of the most popular business financing solutions include:
Banks, credit unions, and online lenders typically offer term loans. You can secure a term loan with a low rate and attractive terms if you have solid credit and sufficient revenue. You’ll need to pay back what you borrow through fixed monthly payments over an agreed-upon term, which may range from several months to several years or even longer.
Working Capital Loans
Working capital loans are just what they sound like: loan options intended to cover the costs of working capital or the short-term expenses that allow you to run your operation. You can use a working capital loan to pay for payroll, utilities, gas, and other everyday expenses. If you own a seasonal business, a working capital loan may help you manage your cash flow.
Small Business Administration (SBA) Loans
SBA loans are small business loans that the SBA partially guarantees. While they usually require a minimum credit score of 620, at least $100,000 in revenue, and a business track record of two years, their low rates and longer repayment terms are attractive. The most common SBA loan program is the 7(a), which business owners can use to pay for various business expenses.
A business mortgage or commercial mortgage can help you purchase property, like an office space or warehouse, or land for your business. Compared to residential mortgages, commercial mortgages come with variable interest rates. You can find them through direct lenders or commercial mortgage brokers. Commercial mortgages may also be used to renovate an existing commercial property.
You most likely need equipment to run your small business, including technology, machinery, or office equipment.
Equipment loans can help you cover the cost of new or used equipment. These loans are relatively easy to get since they are secured to your equipment. But if you default on them, lenders do have the right to seize your equipment.
Lines of Credit
Lines of credit are similar to credit cards but usually come with higher borrowing amounts and lower interest rates. You can withdraw money as you need up to a set credit limit, depending on your credit and other factors. If you don’t know exactly how much funding your business requires, you may benefit from the flexibility of a line of credit.
Business Credit Cards
Business credit cards are a great way to fund day-to-day expenses. Most credit card companies offer rewards, such as cashback, merchandise, special discounts, and travel points. If you choose a card with an annual fee, make sure the rewards outweigh it. Also, repay your balance in full every month, or you may end up in debt.
Merchant Cash Advances
A merchant cash advance (MCA) allows you to get a cash advance in return for a portion of your future sales. Depending on the lender, you’ll repay it through a percentage of your daily debit or credit card deposits or fixed withdrawals from your business bank account.
Resources for Massachusetts Business Owners
If you own a small business in Massachusetts, these resources may be useful.
- Massachusetts Small Business Development Center (MSBDC): MSDC offers free, confidential business consulting and low-cost educational programs to small business owners in Massachusetts. There are seven centers throughout the state.
- University of Massachusetts Boston Entrepreneurship Center: Run by the University of Massachusetts Boston, the Entrepreneurship Center offers classes for undergraduates related to entrepreneurship sales and marketing. It also promotes hands-on involvement with startup ventures.
- SCORE: SCORE in Southeastern Massachusetts and Northeastern Massachusetts provides free mentorship and workshops on various topics, such as eCommerce, email marketing, business plans, sales, and more. It’s an SBA-sponsored program.
Conclusion: Allow Your Business Thrive with Massachusetts Business Loans
Thanks to its large population, innovative culture, educated workforce, and leading infrastructure, Massachusetts is a great place to start a business. With small business loans in Massachusetts, you can launch or grow your venture with success.
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.