5 Best Kentucky Small Business Loans

Updated on August 21, 2021
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Kentucky may not be best known for being business-friendly, but the Bluegrass State has a sizable number of entrepreneurs. Although the state doesn’t have many state-funded small business loan programs, it makes up for it with its outstanding local and community business lenders.

Below, we’ll go into more details about the best Kentucky small business loans, briefly mention a few grant options, and go over a few online business loan options. We’ll also cover a few ideas on how to improve your business loan application.

Small Business Loans in Kentucky: The Top 5 Options

The best Kentucky small business loans are found locally. Look to your community bank and lender first before venturing into larger, state-funded loans. You’ll most likely find a few business loan options that offer reasonable rates within your city, or perhaps even regionally.

1. KEDFA Small Business Loans

The Kentucky Economic Development Finance Authority (KEDFA) provides small business loans for businesses in manufacturing, agriculture, or service and technology fields. Eligible businesses can receive as much as $100,000 from the KEDFA. The term for these small business loans ranges from three to 10 years, and interested businesses should apply if they have fewer than 50 employees. Additionally, at least one full-time job must be created within one year after a business receives the loan.

The first step to applying for a KEDFA small business loan is to contact a staff member of the KEDFA, who will walk you through the loan program and discuss your eligibility. If your project is eligible for funding, you must submit your application (which includes a $250 application fee) to the Cabinet staff. If you’re approved, you will be charged a 1.25% commitment fee.

2. LiftFund

LiftFund is a nonprofit with many locations around the country, with one in Kentucky as well. The organization specifically helps women and minority business owners get access to working capital, microloans, and educational resources for businesses in Lexington, Richmond, and other areas of Kentucky. Liftfund’s small business loans range from $50,000 to $1 million. Loans can be used to:

  • Purchase an existing business
  • Buy supplies, inventory, or equipment
  • Purchase real estate
  • Working capital
  • Expand startups
  • Lease improvements

To be eligible for a loan from LiftFund, you have to be at least 21 years old and not be involved in any current bankruptcy proceedings. You will need to download and fill out an application, which will require you to submit the necessary information about your business such as an EIN, SSN, credit history, and more.

3. Capital Access Corporation - Kentucky

Capital Access Corporation-Kentucky is the leading provider of SBA 504 loans in the entire state of Kentucky. In a nutshell, a 504 loan is a commercial real estate loan that allows businesses to purchase property or equipment. The maximum loan amount for a 504 loan is $5 million, and the best part is that the interest rate is fixed over 10, 20, or 25 years. Projects that are approved for a 504 loan must promote economic development and job creation as well.

In terms of eligibility, all applicants must follow the requirements set by the SBA 504 loan program, which you can view here. Additionally, the total eligible project cost must be at least $100,000. Applicants must fill out an online application detailing information about their business and also pay a $750 application fee, which is returned if the loan application gets approved.

4. Commonwealth Credit Union

Credit unions, while mostly known for banking services, also provide affordable loans with low rates. Commonwealth Credit Union is one nonprofit federally insured by the National Credit Union and headquartered in Frankfort, Kentucky. Commonwealth Credit Union offers a few loan products such as commercial lines of credit, commercial real estate loans, commercial equipment loans, and even credit cards for businesses.

5. The Huntington National Bank

Huntington National Bank is one of the largest banks serving the northern Kentucky region. They’re also the number one SBA lender in the region based on the sheer number of SBA 7(a) loans they issued in 2019. In addition to SBA loans, Huntington National Bank also offers term loans, real estate loans, and business lines of credit. In addition to 7(a) loans, Huntington offers SBA Express and 504 loans. SBA Express loans are essentially loans guaranteed by the SBA but underwritten by an SBA-approved lender such as Hungtington. With Express loans, you can get a credit decision in as fast as one business day.

Best Online Small Business Loans for Kentucky Businesses

If you’ve exhausted all of your Kentucky business loan options or you’re looking for something quicker, you might want to consider online small business loans. These loans are serviced through an online process. Generally, online business loans are more expensive than traditional business loans; but you’ll find that, when it comes to fast funding decisions, online lenders can’t be beaten. These are some of the top online lenders for Kentucky businesses:


Fundbox is a popular alternative online lender. They operate entirely online and provide business lines of credit up to $100,000 to eligible small businesses. In terms of rates, Fundbox is pricier than traditional lending institutions. And unlike banks, Fundbox’s business lines of credit have much shorter terms. Their line of credit loan term usually varies between three to six months. However, it is much easier to qualify for a business line of credit at Fundbox than at most banks. To be eligible for a business line of credit, all you need is to:

  • Have at least three months of business history
  • Have a credit score of at least 500
  • Generate at least $25,000 in annual revenue

If you think you’re ready to apply to Fundbox, you’ll be pleasantly surprised to know that you won’t need many documents to get started. All you need to do is apply using their online application and connect your bank account with their platform. Afterward, you should receive a decision on your credit line within a few days.

Funding Circle

For businesses seeking larger loan amounts that want the convenience of an online lender, look no further than Funding Circle. They offer term loans starting at $25,000 to $500,000, and their loan term length ranges from six months to five years. In terms of cost, Funding Circle is pretty reasonable with interest rates starting at 4.99% (there is also a one-time origination fee if the loan amount is approved).

The minimum requirements needed for a business loan from Funding Circle are slightly more competitive than Fundbox. Funding Circle does not have a minimum annual revenue, but they do ask for a personal credit score of at least 620 and two years of business history.

As an online lender, Funding Circle’s application process is all done through its online platform. Simply input information about your business and the business owners, upload a few months of bank statements and two years of tax returns, and disclose any existing business debt you already have.

Preparing for Your Kentucky Small Business Loan

You’ve weighed your options, and now you’re ready to apply for a Kentucky small business loan. But wait—before you start filling out applications, you should take a moment to consider a few tips to make sure your application is guaranteed to get approved.

  • Write a full business plan: You will need a strong business plan if you want to stand a chance of getting a loan for your Kentucky business. This is especially important if you are planning to apply for an SBA loan. A good business plan generally includes a cover letter, information about your business, financial projections and statements, and reasoning for how you plan to use the loan for your business. Remember, your business plan should accurately reflect your business in the best possible light.
  • Open a business bank account: If you haven’t already opened a business bank account, you should seriously consider starting one. A business bank account helps you separate your personal and business finances and makes the loan application process much easier. Many lenders will want to have a clear understanding of your business finances. Check out these business bank account options.
  • Start your application early: The worst move you can make is to start your loan application late. You should ideally begin applying for a business loan at the peak of your business—so if your business is seasonal, don’t wait until the offseason to start applying. Lenders like seeing consistent cash flow, so keep that in mind when you’re timing your loan application start date.

The Bottom Line

Kentucky can be a tricky state to find small business loans. Although there aren’t very many state-funded loan programs available, there are many nonprofit organizations and community lenders that provide millions of small business loans to business owners in Kentucky. If you’re having trouble finding a small business loan in Kentucky, we also recommend looking into alternative small business lending options, such as online business loans.