How to Get a Business Loan in West Virginia
However, there is plenty of money to be made in lower-income markets. Some of the biggest companies sell their products primarily to lower-income earners. However, the low wages of West Virginia can give lenders pause when evaluating potential borrowers.
Therefore, if you need a West Virginia business loan, you need the right approach.
We’ll explain why you should consider getting a loan in West Virginia in this post. Then, we’ll review the funding options available to small business owners in West Virginia so you can make the right decision.
Why Get a Business Loan in West Virginia?
According to Statista, the largest industries based on value-added to gross domestic product (GDP) in West Virginia are:
- Mining, quarrying, and oil and gas extraction
- Finance, insurance, real estate, rental, and leasing
- Educational services, health care, and assistance
If you have business interests in one of these industries, a business loan in West Virginia can help you expand. Plus, while it’s no Silicon Valley, West Virginia does have some history of successful entrepreneurs. The former CEOs of Cisco Systems and Intuit, John Chambers and Brad Smith, have roots in West Virginia.
Types of West Virginia Small Business Loans
1. Traditional Small Business Loans in West Virginia
West Virginia has a strong network of banks and credit unions that provide West Virginia business loans. The loans on offer include everything from traditional term loans and credit lines to commercial real estate loans and personal.
It’s worth noting that traditional loans are among the most challenging business loans to qualify for. Banks and credit unions have strict eligibility criteria that only well-established businesses can attain.
Still, if you can qualify, traditional loans are a good option because they offer favorable terms and relatively large loan amounts. Just make sure you start the application process well in advance; the process can take months.
If you’re interested, here are several banks in West Virginia that serve small businesses:
- Citizens Bank of West Virginia
- The Grant County Bank
- Pendleton Community Bank
- First Exchange Bank
- First Community Bank
You can head to West Virginia’s state website to find a complete list of banks operating in West Virginia.
2. SBA Loans in West Virginia
Small Business Administration (SBA) guaranteed loans are available in every state, and West Virginia is no exception. If you’re interested in an SBA loan, you can find an SBA lender using the SBA’s Lender Match tool.
With an SBA loan, you work with an SBA-approved lender, which is usually a bank or credit union. The financial institution is the one that lends you the money, but an SBA guarantee backs the loan. If you default, the SBA is responsible for the loan balance. Due to this, lenders are much more willing to lend to less qualified borrowers with favorable terms.
As you might expect, the lenient qualification criteria and favorable terms attract interest. So while you may meet the minimum requirements for an SBA loan, approval isn’t a forgone conclusion. The process is very competitive and requires extra paperwork. The most popular loan programs at the SBA are:
3. Alternative Loans in West Virginia
Alternative loans are a good option for West Virginia entrepreneurs, especially if you’d prefer a quicker turnaround, less paperwork, and more flexibility. Compared to traditional or SBA loans, alternative loans have faster funding timelines and less stringent eligibility criteria.
However, with those benefits also some drawbacks; typically, alternative loans have higher interest rates and sometimes (but not always) lower loan amounts and shorter terms.
The following is a list of the kinds of alternative loans you can find in West Virginia:
- Online term loans and lines of credit
- Equipment loans and leases
- Peer-to-peer (P2P) loans
Also, while they’re not technically loans, a few good alternatives to business loans include:
- Merchant cash advances
- Invoice factoring
- Small business credit cards
Read this post to learn more about your bank lending alternatives.
Conclusion: Fuel Your Growth in West Virginia
There’s no getting around the fact that West Virginia has consistently ranked near the bottom of the country’s best states for business. In CNBC’s state rankings, West Virginia received failing grades for capital, innovation, and workforce access. However, the state excels in the cost of living and the cost of doing business.
For entrepreneurs, that growth in West Virginia requires sound strategy and funding. While opportunities are scarce, the low cost of West Virginia creates the potential for large profit margins. So if you’d like to expand in West Virginia, get a strong business plan together and prepare for your business loan application.
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.