Commerce in the state of Maryland is made up of 99.5% small businesses. Half of all employees in the state, from Baltimore to Annapolis, work for small businesses. So it’s important that those business owners have access to working capital that helps them keep those companies going strong.
Small Business Loans for Maryland Business Owners
Entrepreneurs don’t always have the cash flow to purchase what they need to keep running. In your business, would you be able to replace a piece of equipment like a computer or company vehicle with cash? If not, you’re far from alone.
Small business financing solutions like the ones we’ll discuss below can give you the peace of mind of knowing that you can cover any expense that arises no matter what’s in your bank account.
Options for Small Business Loans in Maryland
Each of the following business financing solutions is ideal for specific situations. Decide which is right for you.
Coronavirus Pandemic Loans
In addition to federal COVID-19 emergency relief loan funds designed to help businesses nationwide recover from financial loss caused by the coronavirus pandemic, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL), there were also Maryland small business COVID programs offered by the Maryland Department of Commerce and other entities.
Note that these programs may no longer be available.
Banks, credit unions, and online lenders offer small business loans with competitive rates and longer terms to businesses with excellent credit.
The U.S. Small Business Administration (SBA) offers low-interest loans that can be used for a variety of purposes. For more information on the various loan programs, visit SBA.gov.
Lines of Credit
When you need working capital, you sometimes don’t need it all at once. That’s where a line of credit can be useful: you are approved for a certain amount, which you can borrow from and pay back, then borrow from again.
If you use expensive equipment in your Maryland business, an equipment loan is worth exploring. Even if you don’t have great credit, you may still qualify for lower interest rates because the equipment you’re buying acts as your collateral for the loan.
Even if you have bad credit, there are financing options. Short-term loans typically have to be paid back within a few months or a year and may have higher interest rates.
Using business credit cards to make purchases for your company, especially a card that lets you rack up points to redeem for rewards, may be a smart move for your business. Some do have high interest rates, so be mindful of paying your balance off before those fees kick in.
How to Qualify for a Maryland Small Business Loan
There are several factors that lenders look at to determine eligibility for financial assistance. If you run a startup, you may not qualify for some options, like a bank or SBA loan, because those usually want borrowers to have been in business for at least two years.
Your credit will also be considered: the higher your personal and/or business credit scores, the better the options you’ll get. Learn how to establish business credit so that you expand your options.
Lenders may also look at your annual revenues and whether you already have loans taken out. Essentially, they will determine how much of a risk you present to them in terms of your ability to repay a loan.
How to Apply for a Maryland Small Business Loan
Before you apply for a loan, review the specifics with the lender you’re applying with. Some may require just a five-minute application, while others, like the SBA or banks, may have more involved processes that require you to provide your business plan and/or financial statements and tax returns.
There are business resources like the Maryland Small Business Development Centers and the Maryland Women’s Business Centers that can provide you with technical assistance, such as helping you create a business plan or apply for business loans.
When applying, regardless of what kind of financing you’re applying for, you’ll be asked to provide information about your company, including how long it’s been in business, its annual revenues, and address. You may also need to give details like your Social Security number.
Once you’ve been approved, you’ll be presented with loan options, including interest rate and repayment terms. If you agree to these, you’ll sign the loan documents, and then funds will be deposited into your business bank account in as little as one day.
Uses for Maryland Small Business Loans
Unless your business loan specifies what you must use it for, such as with equipment loans, you can use it for a variety of purposes related to your business.
Many small business owners use financing to expand their business, such as leasing a second location and renovating it. They might use a loan to hire employees or buy larger quantities of inventory. They might use the funds to buy equipment, or simply to have working capital available when they need it.
Whatever your need, Nav’s got great financing options to help you.