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Ohio Small Business Loans - For Startups, SBA Loans & More

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Ohio Small Business Loans - For Startups, SBA Loans & More

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What is the easiest SBA loan to get approved for in Ohio?

While there are many loan options to consider for small businesses in Ohio, many turn to SBA Loans, and with good reason. Before applying for an SBA loan in Ohio, business owners should be aware of the various types of SBA loans offered. Note that each has its own set of requirements so do your due diligence to protect your valuable time. While SBA loans can come with extremely favorable offers and protections, the application process for SBA loans in Ohio can be more complex and time-consuming than for other types of loans. Hence why you may be asking what the easiest SBA loan to get approved for is. If you’re in a rush, try an SBA Express loan. 

This program offers a more streamlined application process when compared to other SBA loans and faster access to funds. However, it does have some drawbacks, including higher interest rates than other SBA programs and a cap of $500,00 for small business funding. On the brightside, the government can back up to 50% of an express loan and interest rates are capped at the prime rate plus 4.5% to 6.5% depending on the loan amount and qualifications of the borrower. To apply for an SBA loan visit the SBA’s website or an SBA approved lender for more information. 

Understanding your business credit score and risk assessment can make applying for any business loan easier. To unlock valuable insights, visit mySMBscore. It’s a resource you’ll be thankful you discovered as it can make a significant impact on your businesses financial future. 

What are the minimum requirements for a small business loan in Ohio?

While the exact requirements for a small business loan in Ohio can differ depending on the lender and loan type, most lenders typically have a set of general requirements they consider when evaluating a small business loan application. To better understand how a lender evaluates a business for a loan, visit mySMBscore for a personalized view. 

Here are some general minimum requirements you’ll likely encounter when applying for a small business loan in Ohio:  

#1. Credit score

While your personal credit score may be taken into account, lenders will also be interested in your business credit score. This score is typically available after 6 months to a year in business. While there are funding options for borrowers with bad credit, more favorable offers are usually extended to those with a higher credit score. 

Most traditional bank lenders like to see a score of 700 or higher, SBA lenders qualify borrowers in the mid 600’s, and online lenders accept scores as low as the mid 500s. 

For information on your business credit data and lender insights, visit mySMBscore today.

#2. Time in business

Most traditional lenders do have requirements as to how long your business has been in operation. There are alternative lending options available for start-up businesses. The time in business requirement is usually 1-2 years at a minimum, but can vary.

#3. Collateral

Unsecured loans are available and can be based on the above-mentioned factors along with your business revenue, and the specific industry in which it operates. However, secured loans are available as well and may qualify your business for higher loan amounts and grant flexibility with credit score requirements. To qualify, the business must have sufficient collateral to secure the loan. This could be in the form of property, equipment, inventory, or accounts receivable.

What types of small business loans are available in Ohio?

Ohio business owners have access to a variety of small business loan options. From traditional local banks to online lenders, there are plenty of sources to request a loan from. Making financial decisions though is no easy task. Investing the time into understanding all options for a small business loan, including the various types, can help put you on the path to success. Here are some types of small business loan options business owners in Ohio can pursue. 

  • SBA Loans. As mentioned previously, these loans offer funding that is backed by the SBA. This means that the U.S. Small Business Association guarantees a certain amount of the loan to the lender, reducing their overall risk.  This allows lenders to offer more favorable terms to the borrower. 
  • Traditional Term Loans. Traditional term loans offer competitive interest rates and fixed repayment terms, making them an attractive option for businesses seeking financing. When approved for a term loan, you can receive funds as a lump sum. The loan is then repaid in fixed installments with interest. Most lenders do not have spending restrictions, so you can use the funds as needed to grow or support your business. Terms loans often do not require collateral, yet another reason they are popular. 
  • Business Lines of Credit. Business lines of credit are flexible financing options that permit businesses to withdraw funds as required, up to a specific credit limit. Like credit cards, businesses are only charged interest on the funds they borrow, rather than the entire credit limit.
  • Merchant Cash Advance. A merchant cash advance is a financing option based on a business's future sales, where the lender provides a lump sum payment in exchange for a portion of the business's daily credit or debit card sales, plus high fees and interest rates. As they are not subject to traditional loan regulations, businesses should thoroughly review the terms and conditions before accepting this form of financing.
  • Equipment Financing. Equipment financing is a type of loan that is specifically used to purchase or lease business equipment. The equipment itself serves as collateral for the loan, which can make the application process quicker and easier than other types of loans.
  • Invoice Financing. Invoice financing, or accounts receivable financing, involves selling unpaid invoices to a lender at a discount. The lender provides an upfront payment, and then collects payment from the customer, with the business receiving the remainder minus fees and interest.

Can I get a small business loan with a 500 credit score?

While there are some lenders who work with bad credit, it can be challenging to obtain a small business loan with a credit score of 500. If you do find a lender willing to work with bad credit, you can expect to see less favorable loan offers. It is recommended to improve your credit before applying for financing. MySMBScore will help you view your business credit data through the eyes of a lender, so you can gain valuable insight into how to approve your credit standing.

How much does it cost to start a business in Ohio?

Starting a business in Ohio can have varying costs depending on factors such as the type of business, location, and industry. Generally, the expenses can include registering the business with the state, getting licenses and permits, renting or buying a commercial space, buying equipment and inventory, marketing, and hiring employees. Research shows that the average start-up cost for small businesses in Ohio is around $30,000. Check with your local city government for licensing and other regulations. 

What amount is considered a small business loan in Ohio?

There is no standard loan amount for financial institutions across the board, but generally speaking, business loans in Ohio can range from a few thousand dollars, all the way up to $5 million. Creditworthiness, along with the financial health of your business will typically determine the amount you qualify for. Small business loans generally refer to the size of the business, not the size of the loan. When referring to the loan amount, small loans are usually referred to as microloans. 

Is it hard to get approved for a small business loan in Ohio?

As long as you have a decent credit score, a good track record of revenue for your business, and a solid business plan, it shouldn’t be difficult to qualify for a small business loan in Ohio. However, if you are faced with any credit challenges, are a new business, or have a poorly proposed business plan - obtaining funding can be considerably more difficult. While funding options may be available, loan terms will be less desirable. At mySMBscore you can access credit data that can help you evaluate how difficult it might be to qualify for a loan given your current financials. Should you choose to apply, we can connect you with trusted lenders that can help. Should you choose to wait, we can provide insights that can help you improve financial readiness for a loan. 

How to apply for a small business loan in Ohio 

Once you’ve compared offers and chosen your preferred lender, it’s time to formally apply with them directly. For a small business loan in Ohio, you’ll likely need to have your financial statements, tax returns, and other documentation ready, along with a well-crafted business plan. After submitting your application, the lender can review during the underwriting process to ensure you in fact do qualify for the loan. While there are plenty of other steps, in general this is a snapshot of what you can expect. 

What other resources are available for Ohio small businesses?

Ohio offers many resources to small business owners, such as free one-on-one advising, training, and resources through Ohio Small Business Development Centers (SBDCs), free mentoring and workshops through SCORE, and business-related services through the Ohio Secretary of State's office.

How to get a small business loan in Ohio

To secure a small business loan in Ohio, you should start by defining your business needs and loan purpose. Then, check your business credit score and credit profile at mySMBscore to evaluate personalized loan offers from reputable online lenders such as Fora Financial, Credibly, Fundation, Kapitus, Kickfurther, On Deck, and Rapid Finance. MySMBscore's AI technology continuously evaluates real-time and historical data, including accounting records and macroeconomic data from over 1,200 sources, to offer you customized loan options that fit your financial situation and help you achieve your business goals in Ohio.

Here are some of the ways to get a business loan in Ohio (some of these may have changed)

  • The GrowNOW Program: This program is only available for businesses operating in Ohio. Businesses must create or retain at least one full-time or two part-time jobs for every $50,000 in GrowNOW funds they receive.
  • Ohio Micro-Loan Program: This program offers business loans ranging from $10,000 to $45,000 with a 0% interest rate. To be eligible, businesses need to be state-certified as a Minority Business Enterprise (MBE) or Women-Owned Business Enterprise (WBE).
  • Economic and Community Development Institute (ECDI): ECDI provides small business loans for Ohio businesses. It started in Columbus and has expanded to other cities including Cleveland, Akron, Cincinnati, Toledo, and Canton.
  • U.S. Small Business Administration(SBA) Loans: The SBA offers various loan programs like 7(a) loans, 504 loans, and microloans. These loans are available through the SBA's Northern Ohio District Office, which services the northernmost 28 counties and has offices in Columbus, Cincinnati, and Dayton.
  • Online Lenders: Not specific to just Ohio, there are many online business lenders that offer loans at different interest rates, terms, and more. We recommend, however, to be careful and review the fine print before signing any loan documents.

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