If you are a small business owner in Ohio, or you are seeking to open a new business, you may qualify for a small business loan. If you are new to the process then we have some tips and resources that may be helpful to let you know which options are available. There are a few things that you should know before you begin the application process. At this time there are a lot of business owners applying for assistance in the form of small business loans so the processes may take a little more time. Here, we cover the basics including where to apply, the different loan options available, and specific organizations to contact to begin the loan application process.
Options available for Ohio-based small businesses
Ohio-based businesses have the option of applying through local lenders or those who participate in loans nationwide. Each lender has its own set of rules for qualifying. We offer highlights for each provider including private, state, and federal resources.
The Collateral Enhancement Program
The Collateral Enhancement Program is for small businesses in the state of Ohio that lacks the collateral to qualify for a traditional small business loan by filling the gaps. It works by providing cash deposit accounts to help businesses reach the minim requirements to qualify for an SBL. The period of the deposit can run up to five years with a longer loan repayment term if necessary, up to 15 years. This can help your business with equipment loans, working capital, and a line of credit. The maximum credit limit is $35,000 with a maximum loan amount of up to $5 million depending on your situation. The terms are decided after the initial loan application is made. You can apply here.
The Ohio Capital Access Program
The Ohio Development Services Agency administers the Ohio Capital Access Program. This agency provides loan portfolio insurance for Ohio state banks who participate and it guarantees the loans granted, creating a larger pool of funds for lenders to access. This makes participating lenders more willing to invest in small businesses with a higher risk in Ohio. Loans or working capital financing can range from as much as $250,000 to 350,000, depending on the circumstances. Borrowers are required to make small contributions to the lender’s reserve fund of an amount between 2.5 and 3% of the loan amount. You can apply here.
The Economic and Community Development Institute
The ECDI provides small business loans for businesses located in the state of Ohio. It serves the areas of Canton, Toledo, Cincinnati, Akron, Cleveland, and Columbus. This agency provides SBLs as high as $350,000 with microloans as low as $2.500.to qualify you must be a member of the Women’s Business Center or you must pay the $80 fee and join as a member. A credit score of a minim of 590 is also required for your personal credit to be eligible for approval for SBA funds. You can apply here.
The Ohio Minority Business Direct Loan Program
This small business loan program is designated for businesses that are owned by a person of minority status. This is a different kind of loan that is available in three parts when it comes to loan disbursement. Fifty percent comes from a bank, forty percent from the Ohio Minority Business Direct Loan Program, and ten percent comes from owner equity. The range of loan amounts from this program range from $45,000 to $450,000. The average fixed rate is 3% and repayment may be spread out as long as 15 years or less depending on the agreed-upon terms. You can apply here.
Other Loan Providers
Businesses in Ohio who are looking for short-term business loans can also look into the loans offered by LoanBuilder, which is a service of PayPal. This is an online business lender that offers loans from $5,000 through $500,000 with repayment terms ranging from three months to a year with low rates. These loans are processed quickly but eligibility requirements include an annual revenue that is a minimum of $120,000, nine months or more in business and a FICO score of 600 or over. You can apply here.
Huntington National Bank
Huntington National Bank is one of the top-rated SBA lenders in the state of Ohio. The average interest rate is 6.1%. Although the requirements for eligibility are strict and it takes a while to complete the process if you have a business that brings in a minimum of $180,000 per year and you have a personal credit score of 680 or better, with 2 years in business or more you may get approved. You can apply here.
Fundation provides small businesses in Ohio with loans that can be stretched out over a longer period of time. The range is between $20,000 up to $350,000 and repayment terms may be from one to four years with the average rates beginning at 7.9%. These loans are for small businesses that have been in business for a minimum of one year with at least $100,000 in annual revenue and a personal credit score of at least 660 to be eligible. You can apply here.
These are a few of the many options that are available for small businesses in Ohio. We advise you to check out each program and lender to compare the rates and the terms. Some programs and institutions offer better deals for small business owners than others. With the recent Coronavirus pandemic impacts, some lenders are also participating in government-sponsored programs to help small businesses survive these turbulent financial times. We included the most highly recommended resources for small business owners in the state of Ohio who wish to keep their funding local.