April 14, 2022
Rhode Island Business Loans: How to Qualify
Even though Rhode Island is the smallest state in the United States, there are ample opportunities for small business owners. Whether you’re an aspiring entrepreneur or have been a business owner for a while, financing is available to you.
In this blog post, we’ll explore small business loans in Rhode Island so that you can decide which option will best fit your funding needs.
How to Use a Small Business Loan in Rhode Island
Your small business is one-of-a-kind, which means you may have different expenses than another venture in a different industry. The good news is that you can use business loan funds to cover just about any expense. If you take out a business loan in Rhode Island, it can be spent on expenses such as:- Startup costs
- Commercial real estate
- Debt consolidation
- Equipment
- Inventory
- Marketing
Types of Small Business Loans in Rhode Island
Not all small business loans in Rhode Island are created equal, and there’s no shortage of business funding options on the market. Some of the most common Rhode Island business loan programs include:Term Loans
Term financing provides you with a lump sum of cash at once that you’ll pay back over a set term. Terms usually range from a few months to several years or even longer. While traditional bank loans can be challenging to qualify for, they usually come with attractive rates and terms. If you need immediate access to business financing, it may be better to apply for a term loan from an alternative lender. Typically, they offer faster application processes.SBA Loans
Offered by the Small Business Administration or SBA, SBA loans are versatile loan programs that offer low rates and extended repayment terms of up to 25 years that you may not be able to find elsewhere. SBA loans may be worth considering if you have solid credit and don’t mind an extensive application. You can use SBA loans for expenses such as:- Working capital
- Real estate
- Supplies
- Business expansion
Lines of Credit
A line of credit is more flexible than a traditional term loan and usually offers lower interest rates than credit cards. You can borrow as much or as little as you’d like up to a set credit limit based on your credit. If you’re unsure of exactly how much capital you need, a line of credit could be a great solution to consider.Equipment Loans
Equipment loans help you pay for new or used equipment like computers, ovens, bulldozers, or anything else you need to operate. Since equipment loans are secured to your equipment, they’re easier to qualify for than other forms of financing. The caveat, however, is that if you default on your loan, the lender may seize your equipment.Commercial Property Loans
Unless you plan to run your business entirely online, you’ll likely need to buy commercial property like an office building, hotel, restaurant, or warehouse. If your business requires real estate, you can use a commercial property loan to cover this significant expense. It may also help you renovate or update existing properties you use for business purposes.Business Credit Cards
There are a plethora of business credit cards out there. While some require you to pay an annual fee, they usually offer perks like cash back, travel points, gift cards, and 0% introductory offers. Like a personal credit card, you can use a business credit card to pay for day-to-day expenses up to your set credit limit.Merchant Cash Advance
A merchant cash advance (MCA) may be a viable funding option to pursue if your customers pay you through debit and credit cards. Once you take out a cash advance, you’ll receive cash upfront and pay it back with a percentage of your future credit card sales.Resources for Rhode Island Business Owners
As a Rhode Island small business owner, you may find these resources beneficial.- Rhode Island SCORE: Rhode Island SCORE provides free confidential mentoring, workshops, and webinars to small business owners. Its website also contains a wealth of downloadable documents for startups.
- CWE Rhode Island – Women’s Business Center: CWE Rhode Island is a nonprofit organization that supports female small business owners in the state. It hosts many regular classes and workshops.
- RIHUB: The goal of RIHUB is to “increase and enhance the entrepreneurial talent pool in Rhode Island.” This organization provides mentorship programs and an incubator in Providence.