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!
West Virginia is located in the Appalachian region of the Southern United States. The state is known as the national energy hub and produces about 15 percent of the nation’s fossil fuel energy. The tourism industry is a major contributor to the state’s economy because of its historic and cultural attractions. To add, West Virginia is one of the top producers of coal in the US. The state has a reasonably tax infrastructure. However, West Virginia small businesses are very important part of the state’s economic growth. There are about 115,700 small business in the state which covers about 98.9 percent of all West Virginia-based businesses. With the state being suffering from a poor economy, West Virginia small business loans are vital in supporting the small businesses in during their ventures.
How can I get a small business loan in West Virginia?
Banks and lenders all around the state offer different forms of loans for small businesses. The owners have to choose the best option depending on the reason of assistance.
Conventional Bank loans are the first choice for West Virginia 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 West Virginia 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.
Small Business Administration’s (SBA) lending program is a traditional loan provided by conventional lenders in West Virginia with varying rates for 3 to 25 years term and a funding time of 7 to 45 days. SBA loans are backed by the government. This means, when a West Virginia small business defaults, an SBA loan reduces the lender’s exposure to losses as the government helps to compensate for most of their losses. 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. SBA 7a loan is the most common of the many options offered by SBA lenders.
Asset based loans (ABL) assures West Virginia small 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 offers varying rates depending on the lender. ABL is a great choice for companies with a stable growth. Companies which are struggling to recapitalize their balance sheet can also choose ABL. ABL allows high amounts in term of loan with flexible terms. This is a very fast process which can take only 10 days.
Purchase order financing is for that business which is suffering from shortage of working capital to fulfil purchase orders. The financers will provide the company sufficient capital required to pay suppliers and vendors. West Virginia small businesses with raw materials won’t qualify for this loan. They need to have finished products instead. PO financing are provided with revolving credit and reasonably low rates.
Invoice Factoring is also a great choice for West Virginia small businesses for expanding and growing their busines. It 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. West Virginia small businesses are offered much needed working capital to help with cash-flow at a reasonable rate.
Challenges faced by small businesses in West Virginia
The growth rate of West Virginia’s economy is gradually deteriorating. This has occurred due to the loss in their coal industry, on which the state’s economy is hugely dependent on. The real gross domestic product of the state has only grown to a maximum of 1.43 percent since 2013. Moreover, total employment rate within the state has declined. Small businesses are struggling to find skilled workforce due to a decrease in population as well as a lack in quality education in the state.
Unsecured business loans in West Virginia
Business line 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. Banks in West Virginia offer revolving terms with rates starting from reasonable rates.
New or used business equipment can also be financed in many ways through equipment financing. While some West Virginia 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 obliged to pay the full-price for the equipment upfront. On top of that, they will enjoy the latest equipment beforehand. Rates are offered at varying rates depending on the lender with 1 to 5 years term.
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 by West Virginia banks.
Documents required to get a small business loan in West Virginia
Although West Virginia is experiencing an economic downfall, the small businesses in the state can really help push the growth rate of the market by taking risky steps. West Virginia small business loans are there to assist these companies in their difficult times as well as contribute to the state’s economy indirectly.