How to Get a Small Business Loan in Ohio
The most popular industries in Ohio include professional services, construction, real estate, retail trade, and health care, among many others.
Whether you own a small business in the Buckeye state or hope to do so one day, small business loans can help you meet your goals. In this post, we’ll review Ohio small business loan options and explain how you can select the right funding option for your business.
Common Uses for a Small Business Loan in Ohio
Small business loans are usually flexible; you can use them to afford several expenses to start, run, or grow your venture. These funding options can also help you build or improve your credit in many cases.
Some of the most common uses for Ohio small business loans include:
- Commercial real estate
- Startup costs
- Marketing or advertising costs
- Debt consolidation
Types of Small Business Loans in Ohio
Since there are a variety of small business loans in Ohio, it’s a good idea to shop around and compare all of your options. When you do so, you’ll find that some business loan options are easier to qualify for than others.
Here’s an overview of the different types of Ohio small business loans:
Offered by banks, credit unions, and online lenders, term loans offer a lump sum of money upfront and usually come with low rates and favorable terms.
Business loan terms range from a few months to a few years. If you want a bank loan, you’ll need good credit to qualify and might wait weeks or months before receiving the funds. However, alternative lenders usually have easier application processes and less stringent prerequisites.
Small Business Administration (SBA) Loans
SBA loans are partially guaranteed by the U.S. Small Business Administration and distributed by SBA-approved lenders. You may receive up to $5 million in funding and lock in lengthy repayment terms of up to 25 years. Some of the most popular SBA loan programs include:
- SBA 7(a) Loans
- SBA 504 Loans
- SBA Express Loans
- SBA Microloans
- SBA Disaster Loans
- SBA Community Advantage Loans
Business Credit Cards
Business credit cards are a convenient way to pay for day-to-day expenses like gas and utilities. Most business credit cards offer a 0% intro APR period, cashback, travel points, and other perks. However, they aren’t the right funding option for everyone.
Just make sure you pay them off in full every month, or you may steer your business into a cycle of debt. If you have trouble sticking to a budget, this may not be the right funding option for your business.
Business Line of Credit
A business line of credit is a flexible form of business financing that gives you access to funds up to a set credit limit based on your credit score. You can withdraw money at any time and will only pay interest on what you borrow rather than the entire approved amount. Lines of credit tend to offer larger loan amounts and lower interest rates than credit cards.
Merchant Cash Advance
A merchant cash advance (MCA) is an option if you accept frequent debit and credit card payments from your customers. You’ll receive the cash upfront and remit it with a percentage of your sales plus any fees.
If you don’t accept debit or credit card payments, it will be challenging to qualify for this type of funding.
Commercial Real Estate Loan
Also known as a commercial mortgage, a commercial real estate loan can help you buy an office, warehouse, restaurant, hotel, or other property for your business. You may also use it to pay for land or renovations.
Commercial real estate loans usually offer variable interest rates and terms that range from five years or less to 20 years.
Equipment loans are worth considering if you need to buy or lease business equipment like computers, POS systems, or bulldozers, to name a few examples.
Since the equipment will serve as collateral, equipment loans are usually easy to qualify for than other loan options.
Depending on the lender, you might be able to cover 100% of your equipment costs. However, it’s important to note that equipment loans can’t be used for other expenses, such as inventory, rent, or payroll.
Inventory loans are viable if you need financing to purchase business inventory.
Similar to equipment loans, inventory loans are a type of funding that can only be spent on inventory purchases. Therefore, you should pursue a different funding option if you also need funding for other business purchases, such as equipment, payroll, or marketing.
In some cases, the inventory may serve as collateral.
Resources for Ohio Business Owners
As a small business owner in Ohio, you may find these resources helpful as you pursue additional financing or make other business decisions:
- Ohio Business Resource Connection: The Ohio Business Resource Connection is an online collection of resources for Ohio businesses. Whether you’d like to start, finance, or grow your business, it can steer you in the right direction.
- Ohio Business Gateway: You can use Ohio Business Gateway to submit tax payments and manage your Ohio-based business online. You’ll need to create an account to access this platform.
- Ohio Capital Access Program (OCAP): Created by the Ohio Development Services Agency, OCAP is a loan portfolio insurance program. It can help you secure credit to expand your business.
- Women’s Business Centers of Ohio (WBC): You can find WBC locations in Cleveland, Columbus, and Cincinnati. They aim to support female business owners through business coaching, an online resource library, and a computer lab.
Conclusion: Set Your Business Up for Success with Ohio Business Loans
In a perfect world, you’d have the cash to cover all your business expenses. Since this is unlikely, small business loans in Ohio can be invaluable. They’ll provide you with the funds you need to meet your goals, and you won’t have to take away funds from other areas of your business.
Just make sure you choose the ideal loan products for your unique situation. The funding options listed in this post vary greatly, so you must conduct significant research before applying for additional funding.
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.