How to Get a Business Loan in Illinois
How can a loan help your Illinois small business?
Home to nearly $13 million residents, Illinois is a diverse state that attracts many different types of businesses. From the busy city to the rolling hills, Illinois also attracts many visitors throughout the year. One challenge for many business owners though are seasonal changes in weather which can impact businesses. Small business owners in Illinois can utilize a business loan for several activities including but not limited to the following.
- Seasonal demand changes: Illinois is known for extreme weather which can keep tourists away and residents inside. As a result, Illinois businesses may experience seasonal slowdowns. A small business loan or line of credit can be used to maintain a healthy cash flow and keep your business afloat during slower times.
- Expansion and growth: Expansion can include anything from acquiring a new location to revamping online sales systems. As a small business owner you’ll have plenty of competition to keep up with. Continue to find ways to be easy to deal with and find, thus making you the top choice for customers. Illinois business owners can utilize a business loan to fund growth activities.
- Inventory: Product based businesses need inventory to make sales. However, inventory can tie up cash causing cash flow dilemmas. Business owners can use inventory financing or business loans to cover the cost of inventory and improve cash flow.
- Improve cash flow: Cash flow is critical for a healthy business operation. While borrowing money costs money, it can help alleviate financial stress and cash flow dilemmas that hold your business back. Consider using a business loan to overcome cash flow challenges.
What are the Illinois small business loan options?
Small business owners in Illinois can access a wealth of resources, government programs, and loan options. As home to over 1 million small businesses, Illinois relies on small businesses for jobs, services, products, and more. Illinois business owners considering a small business loan should understand the options available as well as how they can qualify. First, let’s cover some of the small business loan options in Illinois.
Now, let’s take a look at how to qualify.
How do you qualify for a small business loan in Illinois?
Thinking about a business loan is one thing, while qualifying is another. Lenders can use a variety of requirements to determine a business's eligibility for a business loan. While you are pursuing a business loan, your personal and business credit can be considered. While you’re probably familiar with your personal credit, your business's SMBscore may be unfamiliar territory. Start by checking your SMBscore to gain perspective as to what lenders might like or dislike about your application. Use this information to increase your chance of approval and or negotiate more competitive offers.
When you’re ready, unlock personalized offers for small business loan offers in Illinois using our safe and small-business centric platform. At mySMBscore our network of top lenders are experts at business loans. Take advantage of the opportunity for them to compete for your business all from the comfort of your home or office.
What can an Illinois small business loan be used for?
Business loan restrictions can vary depending on the lender and the type of loan. Generally, a traditional business loan can be used for most business expenses. Whereas an inventory or equipment loan can only be used for the intended purpose in most cases. This is another reason why it’s important to understand the different types of loans before applying. Some common uses for small business loans in Illinois include the following.
- Working capital
- New equipment
- Software or technological advances
- Marketing
- Inventory
- Remodeling
- Expansion
- and more!
What do I need to qualify for a loan in Illinois?
To qualify for a small business loan in Illinois you’ll likely need to meet a few (or more) requirements. Requirements can include the following:
- Time in business: Most lenders require businesses to be in business a minimum amount of time. You can expect to find requirements around two years.
- Annual revenue: Lenders are in a risky business. They want to see that a business has a proven track record of generating healthy revenues.
- SMB (small-medium sized business) score: Otherwise known as a business credit score, lenders can look at the history of the business financially (and likely will). As you lay the foundation for the future success of your business, this will be an important aspect for you to understand.
- Personal credit score: Small business loans may have personal credit score requirements. Oftentimes they require a personal guarantee meaning that if the business fails to repay the loan, the business owner will be responsible.
- Collateral (if the loan is secured): Small business loans can require collateral. If you use a secured business loan, the lender can have requirements outlining what collateral is acceptable. When using a secured loan, collateral is an important part of the loan so expect the lender to closely examine.
The requirements to qualify can vary depending on the lender, the type of loan, and the risk for the lender. To view your business through the eyes of the lender, visit mySMBscore today. Our platform can help you understand ways to become a stronger applicant. Through AI driven solutions, we can help you make smarter business decisions.
What qualifies as a small business in Illinois?
In Illinois a small business is a business that’s independently owned and operated. Furthermore, in its field of operation, it’s not dominant. There are also limitations on the number of employees and sales to further define what a small business in Illinois is. These limitations include:
- Wholesale businesses with annual sales exceeding $13,000,000 for the most recently completed fiscal year are not considered small businesses.
- Retail or service-based businesses with annual sales and receipts exceeding $8,000,000 are not considered small businesses.
- Construction businesses with annual sales and receipts exceeding $14,000,000 are not considered small businesses.
- Manufacturing businesses with greater than 250 employees are not considered small businesses.
These are just a few of the statutes that define a small business in Illinois.
What grants are available in Illinois?
Grants can be used by business owners as a way to fund growth. A grant is different from a loan in the sense that it does not need to be repaid. While that may sound ideal, as you can imagine, getting a grant can be competitive. The Illinois Department of Commerce offers a variety of grants which can change from time-to-time. Most grants have application deadlines so you’ll need to check a full list of available grants when you’re ready to apply. Other nonprofits and sources can offer grants too. As you research, check the requirements before applying.
Furthermore, Illinois business owners can take advantage of the following resources:
- Illinois Small Business Development Centers: Provides start-ups and small businesses with no-cost professional guidance, support, and training.
- Illinois SBDC International Trade Centers: Support small businesses pursuing or interested in international trade opportunities.
- Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) State Matching Program: Eligible businesses can receive a state match of up to $50k.
How do you apply for a small business loan in Illinois?
Before applying for a business loan, you’ll need to determine what kind of loan you wish to apply for. This decision can be influenced by the needs of the business as well as what it qualifies for. When borrowing money, you’ll want to make sound business decisions to give your business a better chance at success. Positioning your business to be a well qualified applicant can pay off. While you’re probably excited to cross the finish line of the business loan process, be patient and always make informed business decisions.
Here’s 3 straight forward steps you can take to get small business loan offers in Illinois.
- Consider the needs of your business and determine how much you need to borrow
- Check your SMBscore to determine what you can do to increase your chance of approval
- Receive personalized offers from top lenders in minutes at mySMBscore
- We do business the right way. As a business owner, we know there’s extra value in that.
Steps on how to get a business loan in Illinois
There are a few key factors that can impact the average rates for a business loan.
- Determine why you need a business loan and the amount.
- Create a business plan that includes financial projections and what you’ll use the loan for.
- Review your credit and credit history – this will determine what kind of interest rate among other terms of your Illinois business loan.
- Choose a business lender: Choose from Illinois banks, credit unions, online lenders, or consider SBA-guaranteed loans.
- Gather important documents including tax returns and more so you can apply for the loan.
- Apply for the business loan
For Illinois-specific assistance, consider these resources:
- Illinois Small Business Development Centers(SBDCs): They offer free advice on preparing for a loan application.
- Illinois Department of Commerce & Economic Opportunity: Check for state-specific loan programs.
- Local Knowledge: Familiarize yourself with any Illinois-specific lending regulations that may apply.
By focusing on Illinois-specific lenders and assistance programs, you can streamline the process and increase your chances of obtaining a business loan.
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