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!
Home to over three million people, Utah has a highly diversified economy. Mining, cattle ranching, government services and salt production are some of the major contributors to the state’s economy. Utah has a fantastic business climate with almost three million Utah small businesses, which covers about 96.7 percent of all businesses in the state. Moreover, the state has recovered greatly from the 2008 recession. The annual economic growth rate of Utah was about 4.6 percent in 2014 and 2.9 percent in 2015. This is much higher than the overall growth rate of the United States.
How can I get a small business loan in Utah?
To maintain a steady economy, businesses always require financial support from different lenders and Utah offers many options for all types of companies in the state.
Conventional Business loans are usually the first choice for any companies as they offer the best rates and terms among all commercial lenders. The loan is offered by both large and small banks in the state, and comes in form of term loans, lines of credit and equipment financing. They are mostly utilized by Utah 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. Rates offered by banks can range from 5 to 8 percent with 3 to 25 years terms and a funding time of 7 to 60 days.
Small Business Administration’s (SBA) lending program is a traditional loan provided by conventional lenders in Utah with rates varying from 6 to 8 percent 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 Utah 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.
USDA Loans are very similar to SBA loans where the government compensates for most of the losses of the businesses. The only major difference is that to qualify for USDA loan, your company must be in a community with 50,000 inhabitants or less. USDA lenders offers rates as low as 5 percent for terms up to 30 years and a funding time of 30 to 60 days.
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. Private lenders can also include investors. Private loans can be a good choice as it allows much more flexibility unlike conventional lenders. Private business loans offer rates ranging from 5 to 20 percent for term of 1 to 20 years with a funding time of 7 to 45 days.
When a small business does not have enough fund for a conventional bank loan, it looks for alternative financing options. Alternative business loans are provided by non-bank lenders and offer better rates and enough terms for working capital objectives. The process requires much less paper work than any conventional bank loans making it much faster than any regular bank loans, and funding can be completed within a week.
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 Utah small business 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.
Asset based loans (ABL) assures Utah 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 rates varying from 5 to 20 percent with 1 to 30 years term and funding time of 5 to 21 days.
Challenges faced by businesses in Utah
With the state of business in Utah at a very stable state, there are certain challenges that any business has to face. Although Utah has some top-notch educational institutions, the business sector has suffered from lack of qualified and skilled employees. This is because, Utah’s technology sector has experienced massive growth and causing an increase in unemployment rate. Moreover, the state is struggling with very low state wages. The state has some of the lowest per capita personal income rates in the country.
Unsecured Business loans in Utah
Business lines of credit is a kind of small business loan that offers flexibility which usual loans does not offer. This type of loans is offered by Utah banks with varying rates.
New or used business equipment can also be financed in many ways through equipment financing. While some Utah 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 latest equipment beforehand.
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 form of loans is offered by conventional lenders in Utah.
Documents required to get a small business loan in Utah
– 1 page application
– 3 months of bank statements
Utah has created a pleasant business climate for small businesses. Different financing opportunities have made it much easier for companies to thrive during their struggles. Overall, Utah has become a suitable state for small businesses.