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How to Get a Small Business Loan in Vermont
January 19, 2022
How to Get a Small Business Loan in Vermont

How to Get a Small Business Loan in Vermont

Vermont has about 80,000 small businesses, which employ 158,228 workers and account for 60.6% of the total workforce in the state. Most of the small businesses in Vermont are in industries such as professional, scientific, and technical services, construction, retail trade, real estate, and healthcare.

If you’d like to open a small business in Vermont or already own one, small business loans should be on your radar. In this blog post, we’ll explain how you can apply and qualify for small business loans in Vermont.

Uses for a Small Business Loan in Vermont

With small business loans in Vermont, you’ll be able to cover virtually any expense. If you’re a startup venture, for example, a loan program can help you get your business up and running. You can also use it to pay for

  • Office space
  • Incorporation fees
  • Equipment
  • Payroll
  • Other common startup expenses

If your business has been around for a while, you can take out a small business loan to open new locations or expand your offerings. It may also be useful during slow periods or the off season.
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Types of Small Business Loans in Vermont

When you look for small business loans in Vermont, here are some options to keep in mind. Note that the lender and loan type will dictate your eligibility requirements and loan application process.

Business Term Loans

Also known as an installment loan, a business term loan is a traditional business loan. If you take one out, you’ll receive a lump sum of money upfront and pay it back over time via an agreed upon term. In most cases, you’ll make loan payments every month that will go towards the principal and interest. Business terms loans usually require good credit and take weeks or even months to distribute the funds.

Business Lines of Credit 

Business lines of credit are similar to credit cards. Upon approval, you’ll receive a credit limit, which is the maximum amount of money you can borrow. You may withdraw funds at any time as long as you don’t exceed the limit.

SBA Loans

SBA loans are guaranteed loans that are backed by the Small Business Administration (SBA), a federal organization that offers resources for small business owners. These loan funds come with low rates and long repayment terms that are rarely found elsewhere. To be eligible for an SBA loan, you’ll need stellar credit.

Equipment Loans

Equipment loans are used to purchase new or used equipment. It can allow you to get the equipment you need without having to pay for the entire cost upfront. You’ll repay an equipment loan with interest over time. With an equipment loan, you can purchase a bulldozer, computers, ovens, or any other equipment you need to operate.

Microloans

A microloan program may make sense for your business if you only need to borrow $50,000 or less.

You can apply for a microloan from a non-profit lender, even if you don’t have a strong credit score or financial history. Typically, microloans are distributed to startups and new businesses. They often offer reasonable interest rates and favorable repayment terms without the need for collateral.

Business Credit Cards

There are countless business credit cards available. You can use them to cover everyday expenses or large, one-time purchases. Depending on the cards you choose, you can lock in rewards like signup bonuses, gift cards, cash back, and airline points. As long as you’re confident you can repay your business credit cards every month, they’re certainly worth considering.

Merchant Cash Advance

A merchant cash advance (MCA) is when a lender advances money to your business in exchange for a percentage of your debit and credit card sales. Once you receive an MCA, the lender will withdraw payments from your business bank account on a daily basis. The payments will be based on a percentage of your sales.

Resources for Vermont Business Owners

If you own a small business in the Green Mountain state, these resources may be useful.

  • Vermont Small Business Development Center (VTSBDC): VTSBDC provides small business owners with free, confidential advising. You can connect to an advisor and receive expert advice on topics such as startup planning, financing, sales and marketing, and growth strategies.
  • SCORE Vermont: This volunteer organization offers free mentoring to help you start or grow your venture. You can find a mentor and enjoy mentoring sessions via video, phone, and email SCORE also offers online workshops on all types of business topics.
  • Vermont Startup Collective: With the Vermont Startup Collective, you can receive the connections, resources, and advice you need to grow your business. It’s a supportive community of entrepreneurs, freelancers, mentors, and investors. If you’d like to join the organization, you’ll need to complete a request form online.

Conclusion: Build a Thriving Business with Vermont Business Loans

No matter what your goals may be, business loans in Vermont can make it easier for you to meet them. Since there are countless options available, do your research and shop around. Once you do commit to a working capital option, be sure to repay it on time according to your repayment schedule.

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].