Our goal at Lending Valley is to provide all small business owners access to the best loans possible for their business. You can rest assured we will get you the best rates in the market!
Kentucky is located in the Southern region of the United States. The “Bluegrass State” is known for the world’s longest cave system. The state’s agricultural sector has a huge contribution for the growth of its economy. However, industries like auto manufacturing, energy fuel production and medicine have grown in the state. Despite being home to many Fortune 500 companies, Kentucky small businesses remain vital in the market. Small businesses in Kentucky have their hand in all types of industries. With almost 320,000 small businesses, Kentucky small businesses are spread in all types of industries around the state. As a result, Kentucky small business loans become very important in assisting the businesses in helping them go through tough times.
How can I get a small business loan in Kentucky?
There are a many lending options in Kentucky for companies. It is important for the business to figure out their need and choose the perfect option for them.
Conventional Bank loans are the first choice for Kentucky businesses as they offer the best rates. Moreover, lenders will look for business owners with collateral, high sales volume, and good credit. They are mostly utilized by Kentucky small businesses to take hold of other businesses, purchase commercial real estate, refinance a business mortgage, help with expansion financing of other businesses, and offer small businesses working capital. Loans of this type have 1 to 5 years repayment options with relatively low rates.
Small Business Administration’s (SBA) lending program is also a great option as it is backed by the government. This means, when a Kentucky small business defaults, an SBA loan reduces the lender’s exposure to losses as the government helps to compensate for most of their losses. SBA loans are specifically designed for small businesses to get a strong hold in the market. This is why SBA lenders provide this service especially for small businesses as it minimises the risk. However, being controlled by the government, the process requires a lot of paper work. The government collaborates with banks, community workers, and micro-lending institutions to provide loans to companies. SBA loans are ideal for Kentucky small businesses. Loans of this type are offered at varying rates with 10 to 25 years term. The process takes about a month.
Asset based loans (ABL) assures the Kentucky businesses to monetize their assets on the company’s balance sheet. Assets such as buildings, land and other commercial property, along with account receivable, inventory and equipment and machinery can be legalized and utilized for an asset-based loan. ABL is offered at flexible terms and the process takes only about ten days.
Invoice Factoring is a business-to-business transaction that allows a company the potential to leverage unpaid 30, 60- and 90-day invoices to gain specialized short-term business financing before the customer actually pays the invoice. Kentucky small businesses receives much needed working capital to help with cash-flow at a feasible rate. Invoice factoring offers a very hassle-free process which requires much less paperwork than any traditional loans. Moreover, no credit check is required.
Purchase order financing is a funding option for businesses that do not have the working capital to execute purchase orders. The lenders will provide the companies the much-needed capital so that they can pay the suppliers and vendors. This type of financing is mostly utilized by Kentucky small businesses.
Challenges faced by Kentucky small businesses
Kentucky’s tax system is not geared to a modern economy. This has led to the state government being underfunded. Moreover, the state is suffering from systemic poverty and an unhealthy population. Kentucky also has no top-notch educational institutions which has resulted in lack of skilled workforce for companies the state. The small businesses in the rural areas are in need of greater working capital. The business owners have struggled to get affordable health coverage.
Unsecured business loans on Kentucky
Business lines of credit is a kind of small business loan that offers flexibility which usual loans does not offer. This type of loan is best to compensate for expenses that tend to fluctuate throughout the course of the year. Line of credit is offered by banks in Kentucky at revolving terms and the process can be completed as quick as 24 hours.
New or used business equipment can also be financed in many ways through equipment financing. While some Kentucky small businesses will find it easiest and most affordable to obtain a term loan or other type of lending facility to purchase business equipment, other small business owners may find that the best way to obtain the equipment is to lease rather than buy. This is because leasing reduces the amount of cash that would be required instead of leasing equipment. By leasing, the company won’t be forced to pay the full-price for the equipment upfront. On top of that, they will be provided with updated equipment.
Term loan is another form of loan which is paid in instalments over a set period of time. Term loans can also be used as acquisitions, and consolidations and refinancing business debt. This type of loan offers varying rates.
Documents required to get a small business loan in Kentucky
There are certain challenges Kentucky small businesses have to face in their venture. To help these businesses stay afloat, Kentucky small business loans are offering various options. While the government is working to tackle the big obstacles in the state’s economy, businesses will have to keep moving forward.