Illinois is one of the country’s top economic centers, and a small business loan can help your company rise to the top!
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Types of Loans in Illinois
Illinois is home to Chicago, one of America’s largest metropolises, but the entire state’s economy is excellent for small businesses. The state has fairly high business taxes, but many entrepreneurs think that access to Illinois’s terrific customer base is well worth it, not to mention that a business in Illinois can set you up to reach consumers across the Midwest. And a business loan can be a major help along the way.
SBA loans
SBA loans are business loans that are partially backed by the Small Business Administration (SBA), a federal agency. These loans are serviced by private lenders, but are popular because they generally have good interest rates.
Line of credit
Use a line of credit as a flexible form of financing. Unlike with a loan, this option does not involve a big disbursement upfront that you must repay, providing a flexibility that better fits many entrepreneurs’ needs.
Term loan
Term loans are common small business loans in which you would apply for a large disbursement of capital and then repays it over several years, along with fixed or variable interest.
Equipment finance
With equipment financing, you receive a piece of equipment and then pay off the cost of the equipment in installments. This way, your business can make money off the equipment immediately, even if you don’t have the funds to buy it at the sticker price.
Accounts receivable financing
Accounts receivable financing is an alternative form of business financing in which your unpaid invoices serve as collateral for a lump disbursement of funds.
Illinois Business Loan Options
Several local organizations provide small business funding resources in Illinois.
Advantage Illinois is a terrific option throughout the Land of Lincoln, aimed at accelerating and expanding business loan options. A long list of lenders service the loans, which utilize federal funds earmarked for the state’s Advantage Illinois program.
The non-profit Community Reinvestment Fund has been operating in Illinois for over 25 years and offers loan options with great rates for entrepreneurs, especially those working in traditionally underserved areas.
Illinois Bank & Trust works with businesses to provide small business financing across the state. It offers SBA loans, including SBA 7(a), SBA 504, and SBA Express loans.
Based in Chicago, Byline Bank is a top five SBA lender that offers SBA 7(a), SBA 504, and SBA CAPLines to small business across the state.
Founded in Chicago, Village Bank and Trust offers various loan products including SBA 7(a), SBA 504, and SBA Express loans.
First Mid Bank & Trust is a Preferred SBA Lender that offers SBA 7(A) and SBA 504 loans to small business across Illinois.
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Von Sydow’s Moving and Storage, Inc., a family-owned and operated business, is one of the oldest moving companies in the state of Illinois. Since 1888 and for five generations, they’ve moved families and companies everywhere.
Unfortunately, economic downturns spare no one.
A once great, decade-long relationship with a bank turned sour in 2008 when the economical storm hit and most people could no longer afford the services of a moving company. Von Sydow’s revenue declined and so did the relationship with their bank. “It was like they didn’t know who we were,” says Judy Von Sydow, owner.
Many small businesses struggled to survive or even recover from the storm. And without the support or funding from a bank for day-to-day expenses, payroll, etc., many small businesses were forced to close their doors.
Von Sydow’s looked to Lendio because banks did not want to provide lending to small businesses at the time.
“A bank loves you coming through the door when they are trying to get your business,” says Judy. “But when the economical storm hit, banks didn’t want to lend to small businesses that were struggling and they didn’t want to give credit lines. Banks only wanted to lend to profitable businesses.”
It’s why small businesses such as Von Sydow’s reached out to Lendio to continue operating their business. In the long run it was worth it to keep their doors open and continue to provide a living for many employees.
“When the economical
storm hit in 2008, this was the worst recession in 81 years and banks didn’t know how to handle or support their existing customers. We saw many of our friends who were business owners, banking at the same bank, that had to close their doors.”
Von Sydow’s used the funds from Lendio for operating capital which helped this established business get through difficult times.
“Choosing Lendio was an easy decision,” says Judy. “There was no hassle and it was a done deal with funding in less than 3 days at an affordable rate.”
Judy’s advice for fellow small business owners, whether they’re just starting out or have been operating for generations? “Save for a rainy day. There’s always expected financial surprises in running a small business.”
What other resources are available to Illinois small businesses?
The Illinois Department of Commerce & Economic Activity has many resources for entrepreneurs, including a step-by-step guide to setting up shop in the Prairie State. The agency even has a business feasibility checklist tailored to your area. There are several Small Business Development Centers (SBDCs) offices in Illinois, which are centers for business planning help, resources, and networking assistance, all run with funding from the SBA. The Women’s Business Development Center (WBDC) provides a wealth of resources for women entrepreneurs. The WBDC is a nationwide organization, but is particularly active in Illinois because it was founded in Chicago, and its headquarters are still located there.
What Illinois small business grants are available?
For small business grants in Illinois, first check out USGrants.org, which keeps an updated list of current grant options and requirements for the entire state. The Small Business Improvement Fund is a program operated by the City of Chicago that provides grants for small businesses. The Neighborhood Improvement Fund is another popular granting program for businesses located in covered neighborhoods.
What do I need to qualify for a loan in Illinois?
To qualify for an Illinois loan, first determine your business’ structure—a sole proprietorship or corporation, for example. Depending on the structure, you might need to register with the Secretary of State. Once you are set up, you can apply for small business loans. Generally, lenders will base decisions on your business plans, your business’s history, and your business’ credit score.
Which loan is right for my Illinois business?
Determining the type of loan for your Illinois business must be based on multiple factors, like your company’s upcoming business strategies, how much money you need to realize your plans, and your location. Typically, larger loans with lower interest rates are ideal for consistently growing your company over the years, but the repayment period will also be very long, and the approval process can be more burdensome than those of alternative forms of financing. To see what your small business loan options are, try out the free, easy-to-use Lendio platform.
How can an Illinois business loan help my business?
Illinois has a bustling economy and is a regional capital for the entire Midwest, so a business loan can help your Illinois business harness the state’s commercial and geographic advantages. Business loans can help you expand by empowering you to open new locations, reach new customers, and hire great talent.
What is an SBA preferred lender?
An SBA preferred lender is a lender that’s been approved by the Small Business Administration to administer SBA loans without additional approvals from the SBA. Typically these lenders have years of experience and can approve SBA loans faster than non-preferred lenders.
What are the benefits of an SBA loan?
SBA loans are backed by the government and offer lower interest rates than other types of small business loans. They typically require a minimum time in business of two years and a credit score of 650+.
Ready for funding?
See what you can qualify for on the Lendio Marketplace.
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