Our goal at Lending Valley is to provide all small business owners access to the best loans possible for their business. You can rest assured we will get you the best rates in the market!
Home to rural, agricultural farms, Illinois is situated in the Midwestern and Great Lakes region of the United States. The major portion of the state’s economy is reliant on small businesses with about 1.2 million small businesses. This is rather a major issue for the economy as the rate of entrepreneurship has been below the national average for some years now. Illinois small businesses covers almost 98.2 percent of the total market, which is astounding. However, the government is working to produce more opportunities for minority owned businesses. The state’s entrepreneur has contributed to an annual growth rate of 1.6 percent in the state’s economy.
How can I get a small business loan in Illinois?
With the state relying heavily on the small businesses, the companies will always try to stay afloat during difficult times. That is when business loans come in to help. There are many types of business loans that a business in Illinois can choose from.
Small Business Administration’s (SBA) lending program is a traditional loan provided by Illinois banks with rates varying from 6-8% for 3-25 years term and a funding time of 7-60 days. A business can seek for this option as the government compensates for a good portion of the fund, in case the customer fails to repay the loan. This makes SBA lending program very reliable, especially for small businesses in the state.
For the best rates and terms, a small business should go for conventional Bank Loans. They are mostly by Illinois small businesses to take hold of other businesses, purchase commercial real estate, refinance a business mortgage, help with expansion financing of other businesses, and offer small businesses working capital. Term loans and business lines of credit are the most common types of loans offered by banks in Illinois. The rates vary from 5-8% with 3-25 years term and a funding time of 7-60 days.
Small businesses in Illinois can also take Private business loans. These are loans provided by non-bank lenders. Private business lenders can include fintech lender, marketplace lenders, cash advance funders, equipment leasing companies, factoring companies and private business. Loans provided by investors are also categorized as private lenders. A company does not require to have the same credit score as a bank would ask for. Moreover, the funding process is made much shorter than conventional bank lending, making the process easier. The rates range from 1-3% for 3-25 years term and a funding time of 7-45 days.
Unlike other business loans Cash advance loans are just business-to-business transactions where the small business sells a small portion of their future revenue to a much more established company in expectation of more efficient profit. Cash advances include long-term merchant cash advances, bad credit cash advances, additional position cash advances, and advances used for consolidation, which are repaid by either making a remittance to the cash advance funding company, or by having a set amount automatically sent to the funder using Automated Clearing House transaction via the business’s bank account. The rates can differ from 1.3-1.49% for 4-12 months with a funding time of 1-2 days. Illinois small businesses can choose this option if they seek for immediate outcomes.
Asset based loans (ABL) assures the Illinois businesses to monetize their assets on the company’s balance sheet. Assets such as buildings, land and other commercial property, along with account receivable, inventory and equipment and machinery can be legalized and utilized for an asset-based loan. ABL offers rates from 5-20% from 1-30 years terms with funding time of 7-14 days.
When a small business does not have enough fund for a conventional bank loan, it looks for alternative financing options. Alternative business loans offer better rates and enough terms for working capital objectives and require much less paper work than any conventional bank loans. Thus, the process is much faster than any regular bank loans, and funding can be completed within a week.
Illinois’s businesses are facing a handful of difficulties for the last couple of years. The state has the highest rates of struggles for business owners with financial mismanagement, resulting in abnormally high taxes. In numbers, the top marginal corporate income tax rate is at 7.75 percent, including the personal property tax. Moreover, the rural parts of the state have been struggling with slow economic growth. This includes sheer deterioration in production in the rural lands. The government is still struggling to tackle these problems.
Unsecured business loans in Illinois
Business lines of credit is a kind of small business loan that offers flexibility which usual loans does not offer but a much better credit is required to take this loan.
There are many ways to finance new or used business equipment. While some Illinois business owners will find it easiest and most affordable to obtain a term loan or other type of lending facility to purchase business equipment, other small business owners may find that the best way to obtain the equipment is to lease rather than buy. By leasing, the company won’t be forced to pay the full-price for the equipment upfront. On top of that, they will enjoy updated equipment in the following years.
Term loan is another form of loan which is paid in instalments over a set period of time. These are offered by Illinois banks as an option for convention bank loans.
Documents required to get a small business loan in Illinois
– 1-page application
– 3 months of bank statements
Although every state has its struggles, Illinois has faced the highest rates of troubles in their economy in all sectors. Its benefits are mostly dwarfed by the challenge’s businesses face during their ventures in the state. In short, establishing a small business is very difficult unlike a number of advantages.