Small business owners in Baton Rouge, Lafayette, Shreveport, New Orleans, and dozens of other Louisiana towns can’t always go it alone. They need resources to support them in launching, building, and growing their businesses. Whether that’s taking business courses from Louisiana Economic Development (LED), getting a mentor at a Small Business Development Center, or applying for financing, they do whatever it takes to succeed.
How a Small Business Loan Can Help You in Louisiana
So why take out a small business loan? Even if you’ve got money in the bank, having access to more working capital for your business needs can ensure you never experience a cash crunch.
If the opportunity came up to buy a competitor’s business, would you have enough cash on hand to do so? If not, a loan can help.
How has your business been impacted by the COVID-19 pandemic? You may need a little leeway to help you get back on track.
Even having some breathing room to pay your invoices over several weeks could provide relief for your business. As you can see, small business financing can solve a lot of headaches.
Options for Small Business Loans in Louisiana
There are many types of financial institutions, both online and traditional, that offer loan solutions for your business.
Coronavirus Pandemic Loans
Where would we be in the aftermath of the coronavirus pandemic if not for local and federal loan programs like the Paycheck Protection Program and Economic Injury Disaster Loans? It’s scary to think.
Although the SBA is not approving new PPP loans at this time, we’ll keep you updated should that change.
Check for local coronavirus resources on the Louisiana Economic Development website.
When you think of small business loans, you likely think of going to the bank where you already do business. That could be a great solution if you have good credit, but don’t limit yourself to only applying at your bank.
Another option is a loan offered through the U.S. Small Business Administration. These loans are known for having low interest and long repayment periods, making them ideal for businesses looking to get funds to grow over time. The most popular SBA loan is the 7(a), which can be used for a variety of business expenses. There’s also the 504 loan, which can be used for equipment and real estate.
Lines of Credit
Not every business needs a large amount of cash all at once, especially because you’ve got to start repaying that loan immediately! A line of credit is a good option when you want to access some cash now, and more cash later without taking out another loan.
If you buy inventory or supplies from certain vendors regularly, consider asking them whether you can open a trade credit account. This allows you to pay your invoices over time, usually net 30, so you can better manage your cash flow.
Though they often come with high interest, business credit cards can be helpful to have on hand, especially if you have employees who need to make purchases on behalf of your company. Just make sure to pay your balance in full to avoid those interest charges.
Merchant Cash Advance
If you accept debit and credit cards, a merchant cash advance will provide you, you guessed it, a cash advance on future credit card sales. To repay the advance plus a fee, daily or weekly repayments are automatically deducted from your transactions.
How Do I Qualify for a Small Business Loan in Louisiana?
The higher your credit scores, the better the repayment terms you’ll qualify for, and the more options you’ll have. If your credit is excellent, look for a bank or SBA loan.
If it’s not as good, a merchant cash advance or short-term loan may be a better option. These solutions look at other factors besides your credit, such as your revenues or daily sales transactions.
If you’re working on how to establish business credit, take out a trade line that reports to credit bureaus so that your on-time payments help you increase your credit scores.
How Do I Get a Small Business Loan in Louisiana?
Loan applications for small business loans may vary slightly, depending on your lender’s requirements. It’s a good idea to review what you’ll need to provide beforehand to make the process smooth.
You’ll be asked information about your business, including:
- Where it’s located
- How long it’s been in business
- Your Employer Identification Number
- Annual revenues
You’ll also need to provide personal information, such as your Social Security number and contact details.
Once you’ve been approved, you will be given a loan agreement to review with details on your loan terms. If you agree, sign the agreement and your funds will be deposited into your bank account in as little as one business day.
Who is Eligible for SBA Loans in Louisiana?
If you’re considering financing through the Small Business Administration, make sure you qualify for a loan. Some SBA loans have specific requirements, such as what you can use the funds for or the type of business you run.
But generally, your business must be for-profit, and it must do business (or plan to do business) in the U.S. or its territories. You must have reasonable owner equity to invest, and you must have already sought other financial resources, including personal assets.
How to Get a Loan to Start a Business in Louisiana
The state of Louisiana is a great place to start a business. Take advantage of financing options you qualify to make your dreams come true.