Are you ready to join the 900,00+ small businesses in Ohio? You’ll need capital to get started.
Or maybe you have an existing business in Ohio and are looking for a little extra capital to help you grow your company by hiring help, investing in marketing, or buying real estate.
Not to worry. There are small business loans for every situation and every credit profile.
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How a Loan Can Help Your Ohio Small Business
Small business owners know that it takes money to make money. If you bootstrapped your business, you know there were always things that might have been better or easier if you’d had just a little extra cash.
Taking out a business loan can help you reach profitability faster, serve customers better, or offer more products. If you use it to hire help, you can focus on running your business while your employees fulfill orders and manage customer service. If you’re running out of space, a loan can help you move into a larger property. Or if you borrow money to place large inventory orders, you can buy more products at a lower price.
It’s important to note that if your business is struggling, while it might seem like taking out a loan could solve your problems, in the long run, you’ll have accumulated more debt on top of the financial challenges you have. The best time a loan can help is when your business is thriving, as counterintuitive as that sounds.
Best Small Business Loan Options for Ohio Businesses
Here’s where you’ll have to do a little work to figure out what business loan options are the best fit for you. There are many types of loans as well as dozens of different lenders, each offering slightly different benefits.
There are banks all over Ohio that offer working capital loans for businesses. You typically need to have good credit and have been in business for at least two years to qualify. If you do qualify, these offer some of the lowest rates around.
The U.S. Small Business Administration has several SBA loan programs that also offer low-interest loans. These include its 7(a) program, microloan program, and other loans geared toward minority businesses and economic development.
You can learn more about qualifying for SBA loans at SBA.gov.
Lines of Credit
Another option to consider is a line of credit. Rather than getting the full loan amount you qualify for, you can borrow up to that limit and repay it, keeping the line open as long as you need it.
If you don’t have great credit, short-term loans are an option to consider. Note that these have higher interest and need to be repaid quickly, sometimes in just a few months.
How to Get a Small Business Loan in Ohio
Borrowers looking for business financing have several options. You can go directly to the bank or lender, or you can work with a few different Ohio organizations that offer technical assistance and small business resources, including helping you create a business plan and fill out your loan application.
The Ohio Development Services Agency offers several resources for small businesses and can help you start and grow a minority business as well as assist in applying for federal contracts.
Small Business Development Centers are located across the state and can assist in helping you with financial projections that SBA lenders and others may require for small business funding. They also provide workshops and training to help your startup or small business.
How to Choose the Right Loan Option for your Ohio Small Business
With so many loan options for entrepreneurs, how do you select the best one?
The key is defining what you want the financing for. If you need a lump sum for, say, buying real estate, a commercial real estate loan would be ideal. If you would prefer to have access to funds and use them as needed, a line of credit might be better. And if you just need to be able to make purchases for your company, look at business credit cards.
How to Qualify for a Small Business Loan in Ohio
Once you land on the loan option that’s the perfect fit, make sure you qualify for it. Eligibility requirements are different for different types of loans, and a few things will determine the interest rate you qualify for.
Generally, the higher your credit scores, the better the loan terms you’ll qualify for. Banks and SBA lenders usually want you to be in business for at least two years. If you don’t meet these criteria, you can opt for short-term loans or merchant cash advances, which look at annual revenues instead.
Ready to Grow Your Ohio Business?
Whether you live in Columbus, Toledo, Cincinnati, or anywhere else in Ohio, you don’t have to go it alone when it comes to growing your business. With so many loan options from banks, the federal government, and online lenders, it’s just a matter of choosing the right loan for your needs.
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This article was originally written on January 7, 2022 and updated on January 24, 2022.
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