Small Business Loans in Maine

Small Business Loans in Maine

Small Business Loans in Maine

Maine often ranks among the top states in the US to start a business, with strong community and government support as well as a beautiful environment that attracts visitors from all over the world. Some 150,593 small businesses call Maine home, and they generate more than half the state’s jobs according to the SBA’s 2021 Small Business Profile.

But running a business in Maine is not without its challenges. A short tourism season, labor shortages, as well as the impact of the pandemic are just some of the obstacles businesses in the state experience. Cash flow can be up and down, and when funds are tight, businesses often look for funding to fill the gap. 

Here we’ll explore small business loans, grants and other forms of financing which can provide a vital lifeline for businesses in Maine. 

How a Small Business Loan Can Help Your Maine Small Business

When used well, small business loans can help businesses survive and thrive. Top industries in Maine include construction, real estate, and service businesses. All of these types of businesses may have significant capital needs or needs for working capital to cover costs before revenues come in. 

For retail businesses (the fifth most popular industry in the state), financing can help with purchasing inventory, online marketing and advertising, and even to expand a bricks and mortar location. 

Types of Small Business Loans to Choose From

You may have more financing options than you realize. If you’re just thinking of a bank loan, you may miss out on other forms of financing. The most popular options include: 

Lines of credit

A line of credit is one of the most popular types of short-term small business financing, and for good reason. It’s there when your business needs it. With a line of credit you have access to an amount of capital you can borrow from as needed. When you pay back the amount you’ve borrowed (with interest), you can access those funds. Once you’re approved for a line of credit, you can use the money however you choose. 

Term loans

Larger projects or longer term projects require a different type of financing. If you have a project where you know how much you need to borrow, a term loan can be a good fit. Most term loans will allow you to repay the loan over 2—5 years, though some can extend to 10— 25 years. This can be ideal for businesses that want to finance a project that won’t bring in revenues right away, provided they can afford the payments. 

Business credit cards

For small business owners with good credit who are looking for a relatively fast way to get money for their business, a business credit card may be a good option. A business credit card allows you to access your funds once you are approved. There may be additional benefits that come with the card such as cash back or travel rewards, and most business credit cards help you build your business credit scores


If you think of crowdfunding just as a way to raise money for medical bills or to fund artistic projects, you’re missing the potential of crowdfunding for small business. It can be especially valuable to those with great businesses (or ideas) who struggle getting traditional financing. 

Unlike traditional loans, crowdfunding platforms don’t usually check credit, and many platforms are startup friendly. Another difference between traditional lenders and crowdfunding is the payment terms. Yes, you can use crowdfunding to get a loan, but there are also platforms that help you raise money (up to $5 million) from investors or get funding in exchange for rewards (usually in the form of a product). 

Commercial real estate loans

Real estate peppers the list of top small business industries in Maine, and some of those businesses will need commercial real estate loans to acquire or renovate property. These loans may be available through banks or lenders that specialize in real estate loans, and some SBA loans may be used for real estate. 

Equipment financing or leasing

Equipment financing or leasing can be a really smart business move. It allows you to preserve cash flow and may offer tax and asset protection benefits. A variety of equipment can be leased from computers to heavy construction equipment.

Invoice factoring or financing

If your small business sells goods/services to other businesses (B2B) but you need to get paid more quickly, consider invoice factoring or financing. Financing companies that factor invoices buy invoices at a discount, and then collect the invoice directly from the company that owes the money. Invoice financing may advance funds based on outstanding invoices. These companies may not even check your credit scores, or if they do, they are often more flexible when it comes to minimum credit score requirements. 

Business cash advance

A business cash advance or merchant cash advance is exactly what it sounds like. The financing company looks at your past revenues (usually the most recent 3—6 month) then advances you funds against expected future revenues. This type of financing can be approved and funded very quickly, and good credit is not usually required. 


Entrepreneurs that are perhaps getting their first loan or struggling to get any kind of loan may want to look into microloans. These loans are usually made by economic development and nonprofit organizations and loan amounts often are small— $5000 to $50,000 is not uncommon. The smaller loan amounts combined with mentoring assistance makes them less intimidating to first-time borrowers. Another great thing about these loans is that they tend to offer great terms and many times they don’t require collateral. 

Example of microloans in Maine include:

  • CEI which offers a “Wicked Fast Loan” of up to $30,000. (A complete business plan is required but the free business resources listed below can help you complete one.) 
  • MainStream, a nonprofit community development financial  institution (CDFI), offers business loans of $500— $200,000 for businesses having trouble getting funding. 

SBA Loans

When you think of the U.S. Small Business Administration you may think of the mentoring and small business assistance they offer. But it actually goes farther than that; they also have an extensive SBA loan program with over ten different types of loans including loans for exporting, real estate, working capital and more. The SBA makes Disaster Loans directly to small businesses, but other loans are made by financial institutions approved by the SBA. Terms are attractive, but good credit is often required. 

Small Business Loan Options for Maine

Maine has a robust lending community and it’s worth establishing a relationship with local financial institutions. As you look for the right loan for your Maine-based business, consider these lenders: 

Line of credit

Term loans 

Commercial real estate loans

Equipment financing and leasing

Invoice financing

Business cash advance

SBA Loans

What it Takes to Get Approved for a Small Business Loan

There are typically four factors that lenders take into account when evaluating a loan application. Not every lender has the same requirements, but when you start shopping for financing you should be prepared for the following criteria:

  • Business revenues/financials
  • Credit scores (personal and/or business)
  • Time in business 
  • Industry

If you are worried about getting approved for a loan based on those criteria, then you will probably want to look into some of the alternative financing options previously mentioned.


Having your business financial information up to date and easily accessible will serve your business well in many ways, but it will especially come in handy when you apply for loans. Lenders want to know you have enough income to repay the loan and most will require recent business bank account statements to verify revenues. Some lenders, including most traditional financial institutions like banks or credit unions, may require a business plan, tax returns and/or financial statements as well. 


Credit checks are often a part of the business loan application process. Both your personal credit scores and sometimes your business credit scores can affect your ability to get approved, so it’s helpful to check your personal and business credit before you apply. That way you can work on improving them if you need to. If you don’t have good credit you may be able to get alternative financing, but you should still think about how you can improve your scores so you’ll qualify for other financing in the future.


Most lenders have a list of industries to which they will lend, and ones they won’t. Your industry will often be identified with an SIC or NAICS code which may appear on your business credit reports. Make sure yours is correct. Businesses in a “restricted industry” may need to look into some less traditional financing.

Age of business

Many financing companies prefer to work with small businesses that have been around for at least two years. However, if everything else looks good, and your business has only been around for a year, you will probably still have options. Startup financing is more challenging, and you may need to look into business credit cards, crowdfunding or microloans in the early stage of your business. 

How to Choose the Right Loan for Your Maine Small Business

When you’re searching for financing, the first question you need to ask is, “What can I qualify for?” Once you’ve narrowed down the types of financing available, you can then hone in on what’s best for your business. 

There’s no simple answer for every business, but some factors you’ll want to consider is: 

  1. Use of funds
  2. Term of the loan (short or long term) 
  3. Repayment terms
  4. Cost (interest rates and fees)
  5. Impact of loan on cash flow and profit margins

Payments are a key factor but not the only one. If the cost is too high, your business will lose money and won’t be sustainable. The best financing option will help your business get to the next level.

Small Business Grant Options for Maine

Small business grants are very popular with entrepreneurs. They may be available to many types of businesses in different growth stages as well as business owners who may otherwise struggle to get financing. 

Plus grant money doesn’t accrue interest and won’t have to be paid back. But no matter how wonderful small business grants are, they should never be your primary source of funding. Most grants are competitive and simply can’t be counted on as a reliable source of funding. Think of them as a supplement to other funding. 

If you’re searching for grants, don’t just look for small business grants in Maine. Be sure to also check out national grant opportunities as well. will allow you to search for federal grants, and services like and will let you search for grants.

Additional Resources for Maine Small Businesses

A variety of organizations provide free and low-cost business resources to help Maine businesses thrive. Here are a few worth exploring: 

Maine Small Business Development Center

If you are looking for free and low cost business mentoring and advice along with access to webinars and online classes to help you grow your small business, check out the Maine SBDC. They have locations all across Maine, so you should be able to find one near you. 


You can get free mentoring from Maine SCORE, as well as take advantage of  free and low-cost business education workshops on a wide range of topics, from planning and financing to website and social media marketing. Their website includes a variety of resources as well. 

Maine Angels

Maine Angels is a group of private equity investors who invest in early-stage companies and mentor owners. They have invested in over 50 businesses, and take applications for others. You can head to their website to read about their application criteria. If you don’t think it is the right fit for you, they feature additional resources on their website worth exploring. 

This article was originally written on March 14, 2022 and updated on March 21, 2022.

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