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!
Located in the upper Midwest, great lakes and northern regions of the United States, Minnesota is the 12th largest in area and the 22nd most populous state in the US. Minnesota has been experiencing growth mainly because of its emphasis on finished products and services. Moreover, one of its most significant characteristics is its diversity. The state had hold up very well in terms of gross domestic product for the last few years and has become home to a number of fortune 500 companies and well-known brands. With new companies making endeavours, Minnesota small business loans play a crucial role in the business sector.
How can I get a small business loan in Minnesota?
At some point a business will look for some kind of conventional or alternative business funding and so do Minnesota businesses. A company can seek for financing help for either a new venture or working capital for their business to flourish, and they have many options to choose from.
One of the options a Minnesota small business can choose is the Small Business Administration’s (SBA) lending program which is just a regular loan provided by a bank. SBA lending serves its customer with rate varying from 5-8% from 3-25 years relying on the purpose. Besides providing reasonable term loans, SBA also allows revolving line of credit. The funding amount can get to a maximum of $5,000,000. When a Minnesota small business defaults, an SBA loan reduces the lender’s exposure to losses as the government helps to compensate for most of their losses.
When a small business does not have enough fund for a conventional bank loan, it looks for alternative financing options. The company may go for this option when their business if profitable but just not enough. However, alternative business loans provide reasonable rates and sufficient terms for working capital objectives and require much less paper work than any conventional bank loans.
Asset based loans help the Minnesota businesses to legalize 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. Asset based loans’ rates varies from 0.5-2.5% from 1-3 years depending on the purpose with a maximum funding amount of $10,000,000.
Cash advances are not actually any kind of business loans as they are 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. Thus, small businesses in Minnesota can get funded with a merchant cash advance even if they have a bad credit. Cash advance rates varies from 1.10-1.50% for 3-24 months. This fund can go up to about $2,000,000. 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.
Challenges faced by businesses in Minnesota
Minnesota’s growing economy is also facing many challenges that the government and businesses are always working on to overcome. Minnesota has been really dependent on its biggest businesses for economic growth. On top of that, new firm formation has been very low. The government is trying to ensure that the tax climate supports long-term success and ensuring quality care is available at affordable rates, while enhancing the ability of employers to provide coverage to their employees. They want to preserve the right of private employers to develop wage and benefit packages that fit the distinct need of companies and employees. They are also working on to accelerate private-sector workforce efforts to help employers attract and retained the skilled workers they need to complete.
Unsecured business loans in Minnesota
Business lines of credit is a kind of small business loan that offers flexibility which usual loans does not offer. However, a fantastic credit is expected to take advantage of this loan. The line of credit Minnesota offers is a rate of zero to 12 percent. The term for this kind of small business loan in Minnesota is one to two years with a maximum amount of about $500,000.
New or used business equipment can also be financed in many ways through equipment financing. There are instances when small businesses find leasing equipment much better than buying them. By doing so, the Minnesota company won’t be obliged to pay the full-price for the equipment beforehand. Moreover, they will enjoy updated equipment in the following years. The rates vary from 7-25% with 1-10 years terms and a maximum funding of $500,000.
Term loan is another form of loan which is paid in instalments over a set period of time. In Minnesota state term loan’s rate are usually from five to fifteen percent. The terms of this loan ranges from one to thirty years and the funding time of this loan is five to forty-five days. A maximum funding of $5,000,000 can be provided. Term loans can also be used as acquisitions, and consolidations and refinancing business debt.
Documents required to get a small business loan in Minnesota
– 1-page application
– 3 months of bank statements
There are plenty of options to choose from for a small business in Minnesota if they require any loans in their ventures. Depending on the companies fund and current state, Minnesota small businesses can secure any loans to help them grow.