April 19, 2022
How to Get a Small Business Loan in Illinois
The leading industries for small businesses in Illinois include professional, scientific, and technical services, transportation and warehousing, construction, health care, and real estate.
If you own a small business in Prairie State or have plans to open one, business financing can be beneficial. This blog post will dive deeper into how you can procure small business loans in Illinois.
Uses for a Small Business Loan in Illinois
Small business loans in Illinois can be used for a variety of purposes. For instance, you can take one out to cover the cost of everyday expenses like rent, payroll, and marketing. These loans may be beneficial if you deal with frequent fluctuations in your business. A small business loan might also make sense if you own a startup and need to pay for incorporation fees, inventory, commercial real estate, and other initial expenses. If you own an established venture, a small business loan can help you expand to new locations or make other long-term investments.Types of Small Business Loans in Illinois
When you conduct research and look for small business loans in Illinois, you’ll likely come across many working capital options. Some of the most common types of business financing options you may want to consider include:Term Loans
Financial institutions such as banks, credit unions, and online lenders offer term loans to business owners. If you receive a term loan, you’ll get a lump sum of money upfront and repay it over time through fixed monthly payments. If you apply for a bank loan, you’ll need a solid credit score, but other lenders have less strict credit requirements. Before you seek a small business loan, review the lender’s other requirements, which may relate to your time in business, monthly sales, existing debt, and other financial factors.SBA Loans
The SBA partially guarantees SBA loans. Compared to other types of loans, they offer large amounts and longer repayment terms you may not be able to find elsewhere. Several popular SBA loans include:- Standard 7(a) loans
- 7(a) Small Loans
- Export Loans
- SBA Express Loans
- Veterans Advantage Loans
- CAPLines
Commercial Mortgage
A commercial mortgage is worth considering if you need to buy land or property to run your business. Also known as a commercial real estate loan, this program can help you pay for a retail space, hotel, restaurant, office, or warehouse. You can also use a commercial mortgage to renovate an existing commercial property you own.Equipment Loans
Most likely, your business depends on equipment to run your operations. An equipment loan may be useful for office equipment like computers and scanners or heavy-duty equipment such as tractors and bulldozers. The equipment itself will serve as collateral for your loan so you can qualify even with fair or poor credit.Lines of Credit
A line of credit may make sense if you aren’t sure how much money you need for your business; you can withdraw funds up to a set credit limit, which usually depends on your credit and other financial factors. It’s an excellent alternative to traditional bank loans, which provide a set amount of money at once.Business Credit Cards
There are plenty of business credit cards you can use to cover everyday expenses like rent and office supplies. Often, these credit cards come with notable perks such as cash back, travel points, and gift cards. Some also come with 0% introductory offers, which you can use to finance significant expenses without paying interest.Invoice Factoring
Invoice factoring is when you sell your invoices at a discounted price to a factory company. Once you receive a lump sum of cash in advance, the company will own your invoices and collect payment from your customers, usually within 30 to 90 days. Invoice factoring might be beneficial if you have slow-paying customers and want to avoid cash flow issues.Resources for Illinois Business Owners
Consider these resources to support you with your Illinois business.- Illinois Small Business Development Center (SBDC): This organization offers free advice to Illinois entrepreneurs and small business owners. Financial workshops, cohort-based training, and loan assistance are available as well.
- Women’s Business Development Center (WBDC): Headquartered in Chicago, the WBDC supports women in Illinois in their business ventures and other professional goals. It provides business advising, mentorship, and access to capital.
- SCORE Chicago: SCORE Chicago is an initiative of the SBA and connects seasoned entrepreneurs, corporate managers, and executives. Through SCORE, you can take advantage of free mentoring and free or low-cost training programs.