November 11, 2021

How to Secure a Small Business Loan in North Carolina

In this blog post, we'll explore how small business owners in North Carolina can secure necessary business financing.

What to Do With a Small Business Loan in North Carolina

Small business loans in North Carolina are quite versatile, meaning you can use them to cover a variety of expenses. If you own a startup, they may help you pay for real estate, equipment, insurance, marketing, and payroll. A small business loan can also provide you with access to working capital if you’re an established business and need to get through the off season or expand your venture.

8 Types of Small Business Loans in North Carolina

There's no shortage of small business loans in North Carolina. Whether you’re a startup with no credit or poor credit or a large organization with good or excellent credit, you’re sure to find an option that meets your needs. Some of the most common North Carolina business loan and financing options include:

1. Crowdfunding

Crowdfunding can be a great way to finance your small business if it’s a startup. You can use a crowdfunding platform to get matched to investors who support you. Consider LocalStake NC, a North-Carolina based crowding platform that allows small businesses to raise capital from individuals within the Tar Heel state.

2. Term Loans

If you have strong credit, a loan from a bank or credit union may be a good fit. However, if you have limited credit or need immediate funding, bank loans won't be suitable for you. Instead, an alternative lender may be able to help you secure a business loan with affordable interest rates and a faster application process. In addition, you may want to look into the Carolina Small Business Development Fund, as they offer loans of up to $250,000 to eligible businesses.

3. SBA Loans

Offered by the Small Business Administration or the SBA, SBA loans are versatile loans that offer low rates and long repayment terms you may not be able to find elsewhere. If your credit is in good shape and you don’t mind a longer application process with rigorous documentation requirements, SBA loans may be worthwhile.

4. Lines of Credit

With an installment loan, you receive a lump sum of money upfront. If you find that you need more capital, you’ll need to apply for another loan. A line of credit may make more sense if you’re seeking a more flexible financing solution. With a line of credit, you’ll be able to withdraw funds whenever you want up to your set credit limit without having to apply for a new loan.

5. Business Credit Cards

Business credit cards can help you finance everyday purchases. When you compare credit cards, be sure to choose the ones that come with perks like 0% introductory offers or rewards such as cash back or travel miles. Business credit cards can be especially helpful if you don’t have a lot of cash at your disposal.

6. Equipment Financing

Chances are your North Carolina business will require some equipment in order to function. If this is the case, equipment financing may be a great way to cover its cost. Since equipment financing is secured by your equipment and the lender can seize it if you default on your loan, it’s easier to qualify for than other options.

7. Invoice Factoring

If the nature of your business involves invoicing clients and waiting some time to get paid, invoice financing can be beneficial. With invoice financing, you borrow money against outstanding invoices from your customers. By going this route, you can get fast access to cash with minimal paperwork.

8. Merchant Cash Advances

Merchant cash advances (MCAs) are similar to invoice financing. If you choose an MCA, you sell part of your debit and credit cards to a company in exchange for a lump sum of cash upfront. The company will receive your card sales until you repay the amount you owe plus any fees.

How to Qualify and Apply for a Small Business Loan in North Carolina

The financial institution and type of loan you select will determine what you’ll need to qualify for it. Traditional bank loans and SBA loans, for example, will have more stringent requirements than lenders who offer secured loans like equipment financing and invoice financing. The better your credit is, however, the more financing options you’ll have available to you. When you’re ready to apply for a loan, you’ll need to fill out the application online or in-person. While some applications are simple and can be completed within a few minutes, others are longer and require extensive documentation. In most cases, however, you’ll need to provide basic information about you and your business. If you’re unsure of the application process, don’t hesitate to ask the lender for clarity.

Conclusion: Grow Your Venture with Business Loans in North Carolina 

Making the decision to start a business in the Tar Heel state is exciting. Once you do, explore the various financing options so you can make informed decisions for your unique business plan. With persistence, dedication, passion, and the right loans, you can achieve or even exceed your business goals.