December 21, 2021
How to Secure a Small Business Loan in Connecticut
If you’re an existing business owner in the Constitution State or have plans to become one, it’s a good idea to familiarize yourself with small business loans in Connecticut. Here’s everything you need to know about selecting a business financing option:
What to Do With Connecticut Business Loans
Chances are your Connecticut based business has or will incur a variety of expenses. Most business owners need access to capital, but their needs and desired loan amount will vary. If you own a startup or newer business, for example, you might need to pay for office space, inventory, payroll, and marketing. On the other hand, if you own an established venture, you may need cash to expand your offerings or open new locations. No matter what your expenses are, you can cover them with small business loans in Connecticut.
Types of Small Business Loans in Connecticut
Once you conduct research, you’ll find that there is a plethora of Connecticut small business loans. Some are easier to qualify for than others but may be more expensive in the long run. That’s why it’s well worth your time to shop around and compare all the business lending options available to you. The most common small business loans in Connecticut include the following:Term Loans
When you think of a loan program, a traditional bank loan is likely the first one that comes to mind. You can apply for a term loan at a bank, credit union, or through an online lender. Upon approval, you’ll receive a lump sum of money at once. You’ll repay your loan over time, usually via monthly payments. Traditional banks loans can be difficult to get but do come with great rates and terms. If you need faster financing, you may benefit from applying for a loan through an alternative lender. Typically, their application process won't be as lengthy as a bank or credit union, either.SBA Loans
SBA loans are partially guaranteed by the Small Business Administration (SBA) and registered SBA lenders. The most popular SBA loan is the 7 (a) loan program. You can get up to $5 million in funding and use it toward almost any business expense. SBA 7(a) loans offer low interest rates and repayment terms of up to 10 years (25 years for commercial real estate).Commercial Mortgage
If you need to buy an office building, restaurant, land, or any other type of commercial property, a commercial mortgage or commercial real estate loan should be on your radar. Keep in mind that on top of interest, commercial mortgages usually come with fees like origination fees and application fees.Equipment Loans
Equipment loans are a good choice if you need to buy or upgrade any type of equipment. They’re secured loans that use your equipment as collateral, making them easier to qualify for. You can use an equipment loan to fund an oven, computer, tractor, or any other small or large piece of equipment your business depends on.Line of Credit
A line of credit may make sense if you’d like a flexible loan instead of a lump sum of money upfront. You can borrow money whenever you need to up to a set credit limit, which will depend on your credit score and a few other financial factors. You’ll only pay interest on the amount you withdraw.Business Credit Cards
Business credit cards are just like personal credit cards. The only difference is they’re designed to help you pay for everyday business expenses. Many of them offer perks like 0% APR introductory offers, cash-back, gift cards, and travel points. Note that while business credit cards are similar to lines of credit, their interest rates tend to be much higher.Merchant Cash Advance
A merchant cash advance can be a real lifesaver for small business owners facing cash flow shortages. With this financing option, a cash advance provider will give you money in exchange for a percentage of your future credit card sales.Resources for Connecticut Business Owners
If you own a small business in Connecticut, it’s in your best interest to look into these resources.- Connecticut Small Business Development Center: The Connecticut Small Business Development Center offers free business advisory services to help you launch or grow your business. Its website is packed with useful information.
- Business Startup Tool: With the Business Startup Tool by the Secretary of State, you can start your business in Connecticut through a series of easy steps. You may also use it to register your Certificate of Authority.
- Southeastern SCORE CT: Southeastern SCORE CT can be very useful if you’d like a free business mentor. This organization offers business resilience advice as well. There is also a SCORE in Greater Hartford.
- CTNext: CTNext supports entrepreneurs in Connecticut. You can use it for mentorship, capital, skill development, and other programs to help you succeed.