The state of Illinois is no stranger to entrepreneurs. In fact, there are 1.2 million small businesses in the state, making up 99.6% of all Illinois businesses.
But running a business costs money, and sometimes you need a little help in that department. Small business financing in Illinois could be what you need to help your business thrive.
How a Loan Can Help Your Illinois Small Business
Small business financing can provide you with capital to invest in your business’ growth. You could hire new employees so you can better serve demand. You could invest that money in marketing to reach more customers.
If your business is seasonal, an injection of cash could help you make it through slow times. There are so many ways that financing can help!
Illinois Small Business Loan Options
If you’re considering a small business loan, be sure to explore all your options. The better your credit is, the better the terms you may qualify for.
Coronavirus Pandemic Loans
Because of the severe impact the coronavirus pandemic has had on small businesses nationwide, there are a few economic assistance programs designed to help get impacted businesses back on their feet.
In addition to the federal loan programs, the Paycheck Protection Program and the Economic Injury Disaster Loans, Illinois businesses may also qualify for the Illinois Small Business Emergency Loan Fund.
Both banks and credit unions, as well as some online lenders, offer longer-term loans at competitive rates. To qualify, you’ll need good to excellent credit.
The U.S. Small Business Administration offers what may be the lowest interest on loans available to those that qualify. There are loans available for business development and others to bolster economic opportunity in disadvantaged areas.
Loans like the 7(a) loan or 504 may be used for business expenses, equipment, and real estate, among other things.
Line of Credit
Whereas a loan provides a lump sum of cash all at once, a line of credit gives you access to cash when you need it. You can borrow from that line, repay it, and borrow from it again.
If you use expensive equipment in your Illinois business, consider an equipment loan or lease. The equipment you’re purchasing serves as your collateral, which may help you qualify for low interest rates.
In addition to a loan, having business credit cards to make purchases for your company can be useful. Get one with rewards and you can earn them for your purchases, then redeem for travel or cash back rewards.
For those who don’t have good credit, some of the above options might not be available. In that case, there are short-term loans you may qualify for. These do, however, have higher interest rates.
How to Qualify for a Small Business Loan in Illinois
Eligibility for loans in Illinois may vary slightly from one lender to another. Generally, though, you can expect both your business and personal credit to factor in.
As I said: the higher your credit scores, the better the loan options you’ll qualify for. Some lenders will look to see if you have business credit established. If you don’t, learn how to establish business credit so you qualify for more options.
Lenders may also look at how long you’ve been in business as well as your annual revenues to determine whether you qualify for financing.
How to Apply for a Small Business Loan in Illinois
Applications for small business loans may vary wildly, depending on where you apply. Online lenders tend to have short applications that take just a few minutes to fill out, while banks and SBA loans often involve applying in person and providing many documents.
Whichever option you choose, prep what you can beforehand. You will need to provide information about your business such as:
- Address and contact info
- How long it’s been in business
- Employer Identification Number
- Incorporation or LLC paperwork, if relevant
- Annual revenues
You’ll also need to provide personal information, such as your Social Security number and contact info.
If you apply online, you may get an instant decision. Banks and SBA loans typically take a few days or weeks to process.
Once you’ve been approved, you’ll need to review your loan agreement, which will have your approved loan amount, as well as the interest rate and repayment terms you qualify for. Once you sign the agreement, your funds will be deposited into your bank account in as little as one business day, depending on your lender.
What Qualifies as a Small Business in Illinois?
You may wonder what exactly constitutes a small business in Illinois. There are no published parameters unless you’re applying for a program like the Small Business Set-Aside Program.
In this case, small business owners are those with one or more of the following qualifications:
- Your wholesale business annual sales and receipts were $10 million or less
- Your retail business annual sales and receipts were $6 million or less
- Your construction business annual sales and receipts were $10 million or less
- Your manufacturing company employs 250 people or less
What Grants are Available in Illinois?
Grant programs are more great resources to help you find funding for your business. The federal government, local governments, and even private corporations offer entrepreneurship grants to qualifying businesses and non-profits.
The Business Interruption Grants Program (BIG), offered by the Illinois Department of Commerce & Economic Opportunity (DCEO), is one to investigate if your business was impacted by coronavirus, though check to see if the grant is still open.
There are other federal grants available to businesses in certain fields, such as healthcare or education, as well as those aimed at minority businesses.
Get the Loan Your Illinois Business Needs
From Chicago to Springfield, savvy entrepreneurs know that sometimes small businesses need financing to move forward. Find the right loan or financing solution that fits your Illinois business needs, and see how high it takes you.
This article was originally written on June 7, 2021.