Ohio Small Business Loans

Situated in the Eastern North Central region of the Midwestern United States, Ohio has one of the best business climates. The total number for employment in 2016 was almost five million. The major industries, especially the technology industries in the state have experienced sheer growth in the recent years. The government is focusing in providing small businesses in Ohio a pleasant environment to thrive. According to studies in 2015, small businesses in Ohio covered about 97.9 percent of all businesses. Ohio’s business growth rate is very impressive and is greater than most state the country. Moreover, the small businesses are getting more innovative helping the economy to boost further.

How to get a business loan in Ohio?

Running a small business in Ohio comes with many benefits. However, during certain instances in a business, the company requires financial support to help itself keep afloat in the market. This is when different lending options come in handy.

Conventional bank loans are provided by all banks, big or small, in Ohio. They offer the lowest rates and the best terms among all commercial lenders and are clearly the best option for any businesses. They are mostly utilized by Ohio 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. 

Unlike many other states, Ohio SBA loans aren’t funded by the Small Business Administration or the government. They are funded by small banks, large banks, credit unions and community business lenders. However, the advantage is taking a SBA loan remains. SBA will compensate for a large portion of the lender’s losses should the Ohio small business fail to repay their loan. On the contrary, a lot of paperwork is required to take advantage of this loan. This option is chosen by companies for consolidation of business debt, operating capital and purchasing business equipment.

When a small business does not have enough fund for a conventional bank loan, it looks for alternative financing options. The company may go for this option when their business is profitable but just not enough. However, alternative business loans provide reasonable rates and sufficient terms for working capital objectives and require much less paper work than any conventional bank loans. Businesses taking alternative business loans should expect to get their loan funded within 7 to 10 days. This type of loan is taken by companies for fast working capital, marketing expenses, hiring employees and other short-term business uses.

Cash advances are not actually any kind of business loans as they are business-to-business transactions where the small business sells a small portion of their future revenue to a much more established company in expectation of more efficient profit. This makes it possible for a small business in Ohio to get funded with a merchant cash advance even if they have a bad credit. Cash advances include long-term merchant cash advances, bad credit cash advances, additional position cash advances, and advances used for consolidation, which are repaid by either making a remittance to the cash advance funding company, or by having a set amount automatically sent to the funder using Automated Clearing House transaction via the business’s bank account. Any company should keep in mind that the rates offered by merchant cash advances are one of the highest of all lending options.

Private business loans are offered by non-bank lenders. Lenders for this type of loan can include fintech lender, marketplace lenders, cash advance funders, equipment leasing companies, factoring companies and private business. Loans provided by investors are also categorized as private lenders. Private loans can be a good choice as it allows much more flexibility unlike conventional lenders. Private business loans offer varying rates and terms.

Challenges faced by businesses in Ohio

Businesses in Ohio have to overcome certain challenges in the market to thrive. The state is suffering from lack of qualified and skilled workers. As a result, the unemployment rate has been decreasing. With the growing number of technology industries, it has become a serious issue and local organizations are working to provide free and affordable training to employees. Moreover, the state lacks economic diversity, which has also been a major contributing factor to the economic recession.

Unsecured business loans in Ohio

Business lines of credit is a kind of small business loan that offers flexibility which usual loans does not offer. Ohio banks offers varying rates for lines of credit.

New or used business equipment can also be financed in many ways through equipment financing. While some Ohio 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. By leasing, the company won’t be forced to pay the full-price for the equipment upfront. Moreover, they will enjoy the updated equipment beforehand.

Term loan is another form of loan which is paid in instalments over a set period of time. This is offered by Ohio banks. Term loans can also be used as acquisitions, and consolidations and refinancing business debt. Varying rates are offered by banks for term loans in Ohio.

Documents required to get a small business loan in Ohio

– 1 page application
– 3 months of bank statements

With a large portion of Ohio’s economy depending on small businesses, it is very important for the companies to survive in difficult times. So, the different types of loans will help them in their venture. However, the government will also need to support the growing businesses and assist them to overcome the challenges they face. This will result in the state’s economy to flourish in the coming years.