All too often, access to affordable capital is a serious roadblock for entrepreneurs hoping to start or grow their ventures. So for businesses located in The Pelican State in particular, it’s a good idea to look into Louisiana small business loans. These loans are furnished either by state-sponsored institutions, CDFIs, or credit unions, which makes them more attainable to business owners—especially those who are traditionally shut out of the mainstream lending space, like startups, minority business owners, and those in low-income communities.
As you go about your search for small business loans, we’d recommend seeking out your local SCORE office, which can provide free, one-on-one mentorship for small business owners. Another great resource is Louisiana Economic Development, which provides small business owners with tons of state-specific information, from contact information for regional economic development organizations to special programs for small business owners.
But for today’s purposes, we’ll walk you through four of the best funding opportunities for Louisiana small business owners. Let’s get to it.
New Orleans, Baton Rouge, Shreveport, Natchitoches—no matter where your business is based, there’s an accessible loan option for you. Here are four of the best nonprofit and community lenders for you to look into first.
First up, we’d recommend looking into the Small Business Loan and Guaranty Program, which is administered by Louisiana Economic Development through the Louisiana Economic Development Corporation. Under this program, the LEDC provides loan guarantees to participating banks and other financial institutions (like credit unions), who furnish loan funds properly—similar to the way SBA loans function.
Loans range from $5,000 to $1.5 million, and the LEDC can guarantee up to 75% of the loan amount. Borrowers must have 15%-20% equity. This program offers a few types of financing, too, including revolving lines of credit, fixed asset purchases, and startup loans.
All Louisiana-based small businesses are eligible to participate in this program, with a few notable exceptions: Restaurants, bars and saloons, gaming businesses, real estate speculation, recreational, theme, and amusement parks, and parks or camping facilities. For more information on eligibility requirements, the application process, and loan details, head to the Small Business Loan and Guaranty Program homepage.
Businesses who’ve struggled to secure financing from traditional lending institutions may have better luck with a community development financial institution (CDFI) like LiftFund. Their purpose is to provide financing and other resources to businesses in underfunded communities in states across the South (including Louisiana, of course).
Right now, LiftFund is offering two separate relief funds for businesses impacted by the COVID-19 crisis: The LiftFund Disaster Relief 2020 Loan Program and a recovery loan for businesses in parts of Texas and Louisiana, which they are offering in partnership with the Economic Development Administration. Beyond that, LiftFund can offer loans from $500 to $500,000, which eligible business owners can use for myriad purposes.
And beyond that, LiftFund is a certified SBA 504 and SBA 7(a) lender. (504 loans are for the purchase of major fixed assets, like equipment or real estate; and SBA 7(a) loans have flexible-use cases.) Head to LiftFund’s Loan website for more information about how this CDFI can offer your business access to financing.
Another CDFI for your consideration: TruFund, which is headquartered in New York City but operates field offices in Alabama and Louisiana. Like LiftFund, TruFund’s mission is to foster economic development in underserved communities—and providing financial assistance to promising small businesses in low-income communities is just one way they further that mission.
Since 2006, TruFund has approved more than $15 million in loans to small businesses across 11 Louisiana parishes and across industries—everything from art galleries to child care providers to restaurants to lawyers and accountants. These loans range from $50,000 to $250,000, but TruFund can also extend mid-level commercial and development facilities loans to community-based institutions like lending organizations and faith-based institutions for $50,000 to $1.5 million. And they can provide even larger loans (over $1.5 million) “to generate investment, stimulate economic development, and create jobs in low-income and underserved communities,” according to their website.
To find out more about TruFund loans, you can download and review their Louisiana Small Business Loan Application. To find out if you can qualify for a loan in the first place, download and send their Loan Inquiry Form. You’ll find more contact information on their website.
Credit unions are another, more accessible alternative to banks: They offer similar services—including loans and bank accounts for both consumers and businesses—but since they’re not-for-profit, their loans typically carry lower fees than those from banks (which are definitely for-profit). Business owners in Louisiana should check out Hope Credit Union, which serves individuals and entrepreneurs in Alabama, Arkansas, Mississippi, Tennessee, and Louisiana.
Hope offers three small business loan programs, including the SBA Community Advantage Loan Program and the Diverse Community Capital Program, which offers financial assistance to small businesses (under 500 employees) with minority business owners. (That includes business owners who are Black or African American, veterans, female, LGBTQ+, Hispanic, or Asian, among others.)
Otherwise, you may want to look into the Hope Small Business Loan Program, their general loan program that provides several types of loans up to $250,000, which can be used for a variety of purposes—like real estate loans, equipment loans, and both secured and unsecured loans. The application is similar to bank loan applications—you’ll need to include things like bank statements, financial statements, personal tax returns, and a business plan, for instance, along with other material. For a full list of application requirements, head to the Hope Small Business Loan Program homepage.
What we’ve listed above are some of the best, most accessible funding opportunities for Louisiana-based small business owners—but there are more opportunities out there than just these four.
We always recommend looking into an SBA loan, since they’re some of the lowest-cost loans out there (which also makes them some of the toughest to secure, so manage your expectations accordingly). Some of the CDFIs and credit unions on this list are recognized SBA lenders, but you can also inquire with your local bank. Start your search with this list of Louisiana state-chartered banks, whether you’re not happy with your current bank or you’re looking for a bank for your business for the first time. And if you’re seeking an SBA loan in particular, you may have some luck with Fidelity Bank: They were the SBA’s most active SBA 7(a) lender in the state of Louisiana last year. Alternatively, contact your local SBA office. They can provide more information about SBA loans, as well as other resources you may need (both financial or otherwise) to grow and manage your business.
An even more attainable option: A loan from a trusted online lender, like Kabbage, Funding Circle, Fundbox, or any other lender in the Fundera network. Online loans tend to be smaller, more expensive, and have shorter term lengths than bank loans or SBA loans; but as they require much less stringent eligibility requirements, they can be a more practical option for newer businesses. Since they’re totally online-based, the application process is simple, streamlined, and incredibly fast—and, if you’re approved, you may have access to your loan funds immediately.
For more information on these and other funding opportunities, feel free to reach out to a Fundera loan expert. They’ll walk you through the entire process, from identifying loan options, to packaging and sending your loan application—no matter which city, parish, or state your business calls home.