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How to Qualify for Kentucky Business Loans
April 18, 2022
Kentucky Business Loans

How to Qualify for Kentucky Business Loans

The latest figures from the Small Business Administration (SBA) reveal that 360,756 small businesses are based in Kentucky. These businesses employ 716,731 workers and account for 43.6% of the state’s total workforce. The top industries for small businesses in Kentucky include construction, professional, scientific, and technical services, retail trade, waste management, and real estate.

If you’re a small business owner in the Bluegrass State or hope to become one, a small business loan can be invaluable. This blog post will review small business loans in Kentucky and how they may benefit your particular venture.

What to Do with a Small Business Loan in Kentucky

In a perfect world, you’d have the cash on hand to cover all your business expenses. Since this is unlikely, Kentucky small business loans can be beneficial. These loans are versatile, so you can use them to pay for a variety of expenses, including:

  • Startup costs
  • Commercial real estate
  • Equipment
  • Inventory
  • Marketing
  • Payroll
  • Insurance
  • Expansion costs

Types of Small Business Loans in Kentucky 

When you shop around for small business loans in Kentucky, you’ll find many options. The lender and loan type you select will determine the eligibility requirements and application process. While some lenders will approve most business owners and offer fast funding, others have stringent criteria and a lengthy process.

Small Business Loans

Banks, credit unions, and online lenders usually offer small business loans.

If you pursue a bank loan, you’ll need strong credit and sufficient annual revenue to qualify. Also, it might take weeks or months to receive your funds. However, it may be easier to qualify for funding from an alternative lender, as they typically have a faster loan application process.

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Commercial Mortgages

Also known as a business mortgage, a commercial mortgage can help you purchase a property like an office space or warehouse or land for your business. Commercial mortgages differ from residential mortgages because they come with variable interest rates. You may also use them to renovate or expand a commercial property.

SBA Loans

The Small Business Administration (SBA) partially guarantees SBA loans. 

There are several types of SBA loans, which come with low rates and longer repayment terms of up to 25 years. Some of the most popular SBA loans you might want to consider include:

  • SBA 7(a) Loans
  • CDC / SBA 504 loans
  • Microloans
  • CAPlines
  • Disaster loans

Equipment Loans

Your business will depend on equipment to operate smoothly. However, purchasing equipment is challenging for many business owners due to high costs.

Whether you need computers for your sales reps or ovens for your chefs, an equipment loan can come in handy. Even though most equipment loans offer low rates and lengthy terms, funds must be used for the cost of new or used equipment.

Invoice Factoring

Invoice factoring is a short-term financing solution. You can use it to borrow money against the invoices your customers owe you. Invoice factoring is worth considering if you have slow-paying customers and want to avoid cash flow issues, especially if you have trouble qualifying for traditional financing.

Business Credit Cards

You can use business credit cards to cover everyday business expenses like rent, utilities, and office supplies. Most business credit cards offer rewards like cash-back, travel points, and discounts on office supplies. As long as you repay your balance in full every month, a business credit card can help you build or improve your credit.

Merchant Cash Advances 

If you collect credit card and debit card payments from your customers, you may want to explore a merchant cash advance (MCA). You’ll receive an upfront payment in exchange for a portion of your future card sales. You can pay back your advance through a percentage of your daily sales or fixed withdrawals from your bank account.

Crowdfunding

Crowdfunding may be a good option if you own a startup. You can use a crowdfunding platform to find investors who support your business. Some examples of crowdfunding sites that can help you meet your goals are Kickstarter, Indiegogo, Crowd Supply, and Fundable.

Resources for Kentucky Business Owners 

If you own or manage a small business in Kentucky, these resources should be on your radar:

  • Kentucky Small Business Development Center (SBDC)Kentucky SBDC offers free, confidential business advising services. It also hosts webinars on various business topics every Wednesday.
  • Greater Louisville Inc.: Greater Louisville Inc. supports small business owners in the Louisville area. The organization provides connections and networking opportunities you may find valuable.
  • KY InnovationThe mission of KY Innovation is to attract and retain entrepreneurs in Kentucky. It offers funding opportunities and information on incubators throughout the state.
  • Louisville SCORE: Louisville SCORE partners with the SBA to deliver free mentorship and low-cost workshops to small business owners throughout Kentucky. Its website is also full of tools and templates for startups.

Conclusion: Explore Kentucky Business Loans 

If you’d like your venture to succeed, Kentucky business loans can provide you with the capital you need to get up and running or grow your venture. Once you review your business plan and understand how to improve your operations, you should start weighing your business funding options.

However, before you accept a business financing offer, read the fine print and ensure you’re clear on all the terms and conditions.

Fora Financial

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.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].