January 13, 2022
How to Get a Small Business Loan in Missouri
If you are or would like to become a business owner in the Show-Me State, there are a number of small business loans that can help you out. In this blog post, we'll dive deeper into how you can secure small business loans in Missouri.
Why Take Out a Small Business Loan in Missouri
With small business loans in Missouri, you can receive the funding you need to cover any business expense. You might use one to pay for large expenses such as commercial property or equipment. Or you may take one out to fund everyday expenses like rent, payroll, and utilities. In addition, a small business loan in Missouri can allow you to grow your venture.
Types of Small Business Loans in Missouri
When you shop for a small business loan in Missouri, it’s a good idea to consider these options. The right loans for you will depend on the type of business you are and what you hope to accomplish.SBA Loans
SBA loans are backed by the U.S. Small Business Administration (SBA). If you take one out, the SBA will guarantee a portion of the money you borrow. As long as you have good credit, you may land a competitive rate and long repayment term. In most cases, SBA loan programs go up to $5 million and terms of up to 24 years.Microloans
If you need $50,000 or less in working capital, it’s a good idea to explore microloans. In most cases, microloans are offered by nonprofit lenders and ideal if you want to launch a startup. A microloan can also help you out if you have a micro-business like a food truck or freelance operation and don’t require hundreds of thousands or millions in financing.Traditional Bank Loans
Traditional bank loans offer a lump sum of money upfront, which you’ll repay over an agreed upon term. Terms range from a few months to a few years or even longer. Compared to other business financing options, traditional bank loans offer attractive rates and terms. The only caveat is that you’ll likely need a stellar credit score to qualify.Line of Credit
If you don’t know the exact amount of money you need, a line of credit can be a viable funding option. You’ll be able to access funds as you need them up to a set credit limit. Fortunately, you’ll only pay interest on the amount you borrow rather than the entire limit you’ve been approved for.Equipment Loans
Equipment loans are exactly what they sound like, loans designed to cover the cost of equipment. Whether you need a large bulldozer for your construction business, a sewing machine for your boutique, or anything else, an equipment loan is invaluable. Lending institutions usually finance anywhere between 80% and 100% of the cost of equipment.Merchant Cash Advance
If you need fast cash, a merchant cash advance (MCA) should be on your radar. You give the lender a portion of your future debit and credit card sales. In return, they provide you with a lump sum of cash. You’ll repay the amount you borrow via ACH payments or through your individual sales.Invoice Factoring
Invoice factoring is when your business sells its outstanding invoice to a factoring company. Then, the factoring company advances you about 70% to 95% of the uncollected invoices and collects them on your behalf. While invoice factoring is easy to qualify for, it does come with factor fees.Resources for Missouri Business Owners
If you own a small business in Missouri, the following resources may come in handy.- MOSourceLink: MOSourceLink connects startups, entrepreneurs, and small businesses to the tools they need to grow. It offers a number of classes and events as well as guides on topics like how to start a business in Missouri and funding options to consider.
- Missouri Small Business Development Center (SBDC): SBDC focuses on free counseling services for small business owners. It can assist you with applying for grants and the financial, technical, and organizational aspects of your business venture.
- T-REX: T-REX is a non-profit entrepreneur development and innovation facility that offers affordable, low cost space for early-stage entrepreneurs. For a monthly fee, you can enjoy access to co-working, conference space, private phone booths, WiFi, and all T-REX programming.