Kentucky Small Business Loan Options

0

Did you know that almost all businesses in Kentucky are small businesses (99.3% of them, anyway)? That’s a lot of small business owners who may need financial help from time to time.

The good news is that there are tons of opportunities to find financing for small businesses in the state. What could you do with a little extra cash for your business?

How a Small Business Loan Can Help Your Kentucky Business

Not sure what a business loan can be used for? Allow me to enlighten.

For an existing business, loan funds can be used as working capital to help cover business expenses such as payroll, office equipment and supplies. You can also use them to buy another business, renovate your own, or buy real estate.

For a startup, a loan can be used to cover expenses related to launching a business. Note that if you don’t have a great track record with your business, your loan options may be limited.

Types of small business loans to choose from

When it comes to small business loans, there are several categories to choose from. Each has its own requirements to qualify, so depending on your credit score, you may qualify for one or more types.

I have also included some of the lenders who work with Kentucky businesses.

Bank loans

Although they are among the most difficult to obtain, loans offered by banks or credit unions generally have the lowest interest rates. Here are some of the lenders to consider in Kentucky.

U.S. government loans for small businesses

Another option to consider if you have good credit is an SBA loan. SBA loans are offered by lenders approved by the Small Business Administration, although the SBA itself does not lend money. You can get more information about its 7(a) and 504 loan programs at SBA.gov.

Here are the SBA lenders in Kentucky:

Equipment loans

If you’re specifically looking to buy equipment for your business and don’t have good credit, don’t worry. There are equipment loans that use the equipment you buy as collateral, which can keep interest rates low. These are usually easy to qualify.

Commercial real estate loans

And if you are looking to buy commercial real estate, there are loans for that too. Similar to equipment loans, these loans use the property you buy as collateral for the loan.

What it takes to get approved for a small business loan

You already know that your credit scores are important when applying for a small business loan. Many lenders, especially banks, also require entrepreneurs to have been in business for at least two years, which means startups can struggle to qualify for traditional loans.

Additionally, lenders may want to see financial statements and/or tax returns. Some lenders, especially SBA lenders, may also ask to see a business plan so they can understand how you plan to use the funds.

How to Choose the Right Loan for Your Kentucky Small Business

Start by reviewing the eligibility requirements for a given loan. Once you’ve narrowed down your selection to those you qualify for, look at the rates you’re offered. Low-interest loans are ideal, but consider other things like additional fees, the reputation of the lender, and other services offered.

Small Business Grant Options for Kentucky

Financial assistance for Kentucky businesses doesn’t just come from small business loans. You may also be eligible for grants offered by businesses, state and local governments, and nonprofit organizations.

These grants do not have to be repaid. Some have strong competition. Some have specific requirements, such as whether your business is female, minority, or veteran-led, or is in a certain industry. Still, you can’t get one if you don’t ask for it! Start with these grants.

Additional Resources for Kentucky Small Businesses

If you need more than financing and could use some tips on how to run your business smartly, check out these resources for small businesses in Kentucky. They offer free training, mentorship, networking, and education.

Entrepreneurship can be a long and winding road. But you don’t have to take this trip on your own. Whether you need money to get through a slow period in your business or want someone to kick start your ideas, there are resources in the state of Kentucky that can help you on the road to success.

This article was originally written on February 18, 2022.

Rate this article

This article has no ratings yet.

class=”blarg”>


Source link

Share.

Comments are closed.