Best Loan and Grant Options for Starting a New Business in Ohio
It is no secret that a new business barely survives without a financing boost. You can choose from several options, but the trick is in knowing where to get one. As an additional benefit, the best loan and grant options for starting a new business in Ohio also offer training and mentorship to ensure the funds are put to good use.
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The best loan and grant options for starting a new business in Ohio may take any of the following forms: small Business grants or Small business Loans.
Small Business Grants: are grants by government and nonprofits which are non-repayable but have strict qualification criteria. You must go through a competitive process to get one, and the award comes with strict stipulations that require you to apply them for its initial purpose.
Small Business Loans: Loans are financing through banks and other lending institutions. Banks usually fund working capital and require documentations that include a business plan. Small business loans differ according to usage.
Grants are free and not repayable, whereas loans are repayable either in lumpsum or installments. Grants are either national, regional, or city-wise.
Key Features of the Best Loan and Grant Options for Starting a New Business in Ohio
Federal Small Business Grants
Federal grants are suitable for education, environmental research, technology, and medical research. These loans cover your expenses on research and development. Grants generally range between $25,000 and $250,000. However, your ceiling limit can increase to $1 million, depending on your business prospects.
Amber Grant Foundation
Amber Grant Foundation supports women entrepreneurs by availing then monthly grants and additional grants annually.
State Government Grants for Small Business
The grants lean towards a particular state’s social situation and complement other state grants. Thus the amounts are usually lower.
USDA Rural Business Development Grant
USDA grant is available to rural-based start-ups with up to 50 employees. USDA grants loans aim to support projects that benefit the rural community in Ohio.
Small Business Administration (SBA)
Small Business Loans SBA 7 (a) are SBA-guaranteed loans applicable to small businesses within the US and demonstrate a need for the loan. Though SBA does not underwrite these loans, they are available in some financial institutions that have an MOU with the government.
The maximum SBA loan is $5 Million and the maximum repayment period is ten years. For amounts below $25,000, the interest rate is Prime + 4.25%.
Huntington National Bank
Huntington National Bank is one of the top SBA loan lenders that require a credit score of 680+ to qualify. The bank provides term loans, lines of credit, real estate loans, dental practice financing, and veterinary financing.
Union Savings Bank
Union savings bank provides options on term loans, business credit cards, construction financing, LCs, and mortgages.
Heartland Bank
The BBB A+ accredited bank offers start-up loans to veterans under the SBA Veterans Advantage program. Also available are Agriculture loans, business loans, Equipment loans, LCs, Real estate, and start-up loans.
Working Capital Loans
Working capital loans are available on a revolving basis to cater to business needs as and when necessary. A working capital loan helps deal with a business cash flow. The loans are flexible on collateral requirements. In addition, you can repay instantly whenever the business cash flows allow.
The maximum working capital loans are $750,000 at the rate of between 7-25% and are repayable within two years.
Microloans
Microloans involve loan amounts between $5,000 to $ 50,000 with a term of six years at the rate of 7%-8%. You can obtain microloans from banks or by partnering with government agencies. In addition, you can apply for a microloan through SBA, provided you will strictly use the funds for business use.
Alternatively, you can get microloans through platforms harboring multiple investors whom you must convince. You can also make repayments through the same platform. Finally, it is worth noting that microloans have low eligibility conditions and favorable rates compared to other conventional loans.
Your Final Take
If you are searching for the best loan and grant options for starting a new business in Ohio, you need to prepare your documentation well and meet specific qualification requirements. Among them are business revenues, credit scores, and the purpose of the loan.
It helps a lot to join training programs, workshops and get advice and counseling from mentors. Finally, the government plays a role in both provisions of grants and loans, and its assistance comes in the form of guarantees and direct lending.
Applying for a small business grant is tedious and time-consuming because of administrative paperwork and reporting. However, loans and grants are plenty and readily available if you know where to look. Having several options to explore help in case of a loan decline and comparison of interest rates.
