Guide to Getting a Small Business Loan in Ohio in 2024

Are you looking to get funding for your Ohio small business? With over 200,000 small businesses in the Buckeye State, getting a small business loan in Ohio can help you take your company to the next level. In this comprehensive guide, we'll cover everything you need to know about getting a small business loan as an Ohio entrepreneur, from types of loans to lenders and loan programs. Whether you need funding to start, grow, or expand your Ohio business, read on for tips to secure financing.

Article Outline

1. Why Small Business Loans Matter for Ohio Companies

2. Types of Small Business Loans Available in Ohio

3. Top Lenders for Small Business Loans in Ohio

4. Ohio Small Business Loan Programs

5. 7 Tips for Improving Your Chances of Getting a Small Business Loan in Ohio

6. Key Takeaways

Why Small Business Loans Matter for Ohio Companies?

As the 7th most populous state in the country, Ohio offers great opportunities for small business owners. However, every business needs capital to start and grow. Business loans allow Ohio companies to:

• Cover startup costs like equipment, inventory, marketing, etc.

• Expand into new markets or locations.

• Hire more employees.

• Bridge cash flow gaps.

• Invest in growth opportunities.

For Ohio small and medium businesses, getting affordable funding is crucial. Business loans provide access to capital that may not be available otherwise. With favorable loan terms, small businesses in the Buckeye State can focus on operating and growing their ventures.

Types of Small Business Loans Available in Ohio

Several loan options are available to fund Ohio small businesses at various stages. Popular types include:

SBA Loans

Small Business Administration (SBA) guarantees loans issued by lenders to small businesses. This reduces the lender's risk, allowing them to provide affordable loan terms.

SBA 7(a) loans go up to $5 million and can be used for various business purposes like working capital, equipment, expansion, etc. Rates vary by lender but are capped at around 6-8%. These are the most common types of SBA loans.

SBA Express loans up to $350,000 have a 36-hour application turnaround. Rates are similar to SBA 7(a) loans. The SBA Express loan is a fast, streamlined loan program with an accelerated process.

SBA 504 loans provide long-term financing of up to $5 million for major assets like real estate or heavy equipment. These loans feature below-market fixed interest rates for the 10-year equipment and 20-year real estate portions. 

Conventional Small Business Loans

These are regular business loans offered by banks/lenders without SBA guarantees. Amounts and uses are flexible but underwriting can be strict. Rates vary by lender, typically 8-13%. Consider conventional loans if you need funding faster than SBA loans.

Lines of Credit

Revolving credit lines allow borrowing up to a set limit as needed. Useful for working capital and operating expenses. Variable interest rates apply, but lines of credit provide flexible access to funds.

Equipment Financing

Loans are specifically for purchasing equipment like machinery, vehicles, etc. Terms match the useful life of the asset purchased. Equipment loans can provide financing if your Ohio business needs to expand operations.

Merchant Cash Advances

A lump sum is advanced in exchange for a percentage of future credit card sales. It's quick to get but expensive, so consider it only as a last option.

Alternative Loans

Offered by online lenders using quick underwriting. Very high rates, so use as a last resort when you cannot qualify for conventional loans.

As you can see, Ohio small businesses have multiple loan options to fund diverse needs, whether starting up or expanding. Now, let's look at some top lenders.

Top Lenders for Small Business Loans in Ohio

Many national and local lenders provide small business loans across Ohio. Here are some top picks:

National Lenders

• Wells Fargo - Offers SBA loans, lines of credit, equipment financing, and more. Competitive rates and flexible loan amounts.

• JP Morgan Chase is a leading SBA lender with several branches across Ohio. Offers a full range of business loan products.

• Huntington Bank is a regional lender headquartered in Columbus, Ohio. Offers business term loans, lines of credit, real estate loans, and SBA loans. Huntington is a major SBA lender in Ohio.

Local Ohio Lenders

• Telhio Credit Union - Offers business loans, lines of credit, and SBA loans across central Ohio. Telhio is a trusted community lender.

• Cardinal Community Credit Union - Credit unions provide business loans and lines of credit in the Greater Cleveland area.

• Day Air Credit Union - Serves the Dayton area with business loans, equipment loans, and credit lines.

In addition to banks and credit unions, online lenders like Kabbage, BlueVine, and Fundbox also offer small business loans in Ohio.

Shop around with multiple lenders to compare options and get the best loan for your business. Both big banks and community lenders can offer great financing terms. To make it easier, contact Lendtek since we connect you to all lenders to get you higher chances of approval.

Ohio Small Business Loan Programs

Beyond regular lending, some helpful loan and grant programs are available specifically for Ohio small businesses:

• Ohio Microloan Program - Provides $500 to $50,000 loans to startups and small businesses that cannot access conventional loans.

• Ohio Minority Business Bonding Program - Provides bid, performance, and payment bonds to help minority contractors get work.

• Ohio Capital Access Program - Encourages lending to small businesses by reducing lender risk through cash collateral accounts.

• Research and Development Loan Fund - Assists Ohio technology companies with R&D and commercialization of innovative products through loans up to $1.5 million.

• Ohio Innovation Fund - Invests in high-growth Ohio startups in the seed and early stages. This can lead to further funding.

• Small Business Development Centers - Help get SBA loans and provide counseling services for small business owners in Ohio.

Leverage these programs for easier access to capital or technical assistance for your Ohio business. The Ohio Development Services Agency operates several initiatives supporting local economic development.

7 Tips for Improving Your Chances of Getting a Small Business Loan in Ohio

Follow these tips when applying for a small business loan to boost your odds of approval:

• Have a solid business plan with financial projections. Lenders want to see a viable business.

• Get your business finances in order and maintain clean books using accounting software like QuickBooks.

• Build your personal and business credit score. Aim for 700+ personal scores and pay bills on time.

• Put up collateral like business equipment or property if possible. This reduces the lender's risk.

• Only apply for what you need and can comfortably repay based on business cash flow. Don't overextend yourself.

• Shop with multiple lenders, including banks, credit unions, and online lenders, to compare loan terms.

• Bring an experienced accountant or advisor to discuss your application with the lender. This shows you are serious.

Getting a small business loan in Ohio can be straightforward with proper preparation and research. Avoid common mistakes like poor personal credit, lack of collateral, no business plan, etc., to get approved faster.

Key Takeaways

• Small business loans allow Ohio companies to fund growth goals like expansion, hiring, inventory, etc., at affordable rates.

• Choose SBA loans for low rates or conventional business loans for faster funding. Lines of credit provide flexible access to capital.

• Work with national, regional, or local Ohio lenders that offer business-friendly loan products.

• Take advantage of special Ohio loan programs like the Minority Business Bonding Program or Microloan Program.

• Follow tips like having a solid business plan, building credit, and putting up collateral to get approved for a loan.

Access to capital is crucial for any business. For Ohio entrepreneurs, getting a small business loan tailored to your needs can provide the funding you require to start, sustain, or grow your venture. Do thorough research and put your best foot forward to secure favorable business financing. Consider getting your business financing through Lendtek. Contact us today and get connected to all lenders nationwide!