6 Best Maryland Small Business Loans

Minority-owned businesses looking to upgrade their business operations, enter into new markets, or develop commercial technology applications should look into the Maryland Economic Adjustment Fund (MEAF). MEAF provides loans up to $150,000 specifically for minority-owned businesses with less than 50 employees, so it’s worth a look. To be eligible for a business loan from MEAF, applicants must show:

• Creditworthiness
• Ability to make repayments
• Inability to get traditional financing

Applying for a MEAF business loan involves several components. You must first submit a complete business plan, which should explain your budget and uses of funds. You will also need to submit personal and business federal tax returns, primary business owner’s resume, and current personal financial statements. You will also need to list all other owners of the business if they exist. You will also need to be willing to submit collateral to secure the loan.

Baltimore Business Lending provides small business microloans for businesses located in Baltimore City neighborhoods. They specialize in loans for business owners who may not have collateral or have average credit. They give special consideration to minority- and women-owned businesses.

Baltimore Business Lending provides two types of loans: the emerging loan and the growth loan. The emerging loans are specifically for startups or emerging businesses that have been in operation for less than two years. The second type of business loan offered is the growth loan, which is a larger loan intended for more established businesses.

• Emerging loan: These loans range from $10,000 to $50,000, and have fixed interest rates. The current interest rate is set at 9.25%, but women-owned businesses can receive a reduced 7.25% rate. The term length for emerging loans is usually between three to seven years.
• Growth loan: Only businesses that have been in operation for at least two years are eligible for the growth loan. Loan amounts start from $50,000 and go up to $150,000. The same 9.25% interest rate applies to the growth loan, as well as the special interest rate for women-owned businesses.

Eligible businesses must have good credit and no bankruptcies within the last two years of application submission. Although these loans do not require any collateral, please note that a UCC lien will be placed on your business if you accept the loan. Additionally, all business owners must sign a personal guarantee. You can apply by submitting your application online and paying a $100 application fee and a $25 credit report fee. You will also need to submit a written business plan, including financial statements, federal income tax returns, and proof of citizenship.

The Maryland Resource-Based Industry Financing Fund, or MRBIFF for short, is a program operated by the Maryland Agricultural and Resource-Based Industry Development Corporation (MARBIDCO). This program helps new farmers purchase land and equipment to expand their farming business by providing large business loans serviced by MARBIDCO.

Maximum loan amounts range from $250,000 to $750,000, depending on the purpose of the loan. If you need capital to acquire equipment and fixed assets, the maximum loan amount is $250,000. For large real estate purchases, the maximum loan amount is $500,000; and for large-scale food or fiber-processing projects, the cap is at $750,000.

Interest rates on all loans start at 2.25% for the first three years, increase to 4.75% over the following three years, and 6% for the rest of the loan term. There is also a 1% origination fee.

Although MARBIDCO originates the loan, to apply for an MRBIFF loan, you will need to connect with a commercial bank or Farm Credit Association loan officer.

Neighborhood BusinessWorks, another sponsored program through the state of Maryland, provides loans to small businesses located in Maryland’s older areas. The purpose of Neighborhood BusinessWorks is to stimulate neighborhood revitalization in Maryland. These loans have a maximum amount of up to $5 million, with loan terms up to 30 years. Borrowers must contribute at least 10% in personal funding contribution, based on the total project cost.

Projects eligible for funding include retail, manufacturing, or service-related businesses. Mixed-use projects are also suitable for financing. These projects must be in a certified sustainable community or priority funding area.

You must download the Neighborhood BusinessWorks Loan application to apply for a loan. The application package will require a cover letter, business plan, financial statements, bank statements, general information about your business, and many more documents. A signed personal guarantee and collateral are also required.

Aside from banks, credit unions are another great source for business loans because their rates tend to be lower and their customer service is usually top-notch. If you think a credit union would be of interest to you, SECU is a top credit union in Maryland. SECU also provides business loans such as business lines of credit and term loans in addition to traditional financial services.

Of course, to apply for any of these business loans, you will first need to become an SECU member. To do so, you will need to meet one of the following requirements:

• Relationship with a family member who is already a member
• Employed by a Maryland State agency or organization
• Attended or employed by a Maryland college/university
• Employed by one of SECU’s affiliated employers
• Currently donating to the SECU MD Foundation

Your business must also provide business documentation such as legal structure documents, personal and business tax returns, balance sheets, etc. All individuals who have at least 20% ownership of the business will need to provide a personal guarantee.

The Harbor Bank of Maryland is a CDFI or community development financial institution. CDFIs are committed to providing affordable loans to low-income or disadvantaged individuals or businesses. The Harbor Bank of Maryland is one of the largest CDFIs in Maryland. It offers three types of business loans: business lines of credit, term loans, and commercial mortgage loans.

• Business lines of credit: A business line of credit from the Harbor Bank of Maryland starts at $25,000. Borrowers can use their credit line to cover general business expenses such as payroll, purchasing inventory, etc. The loan has a 1-year maturity.
• Term loan: Term loans can be used for asset purchases with repayment periods ranging from 3 to 10 years.
• Commercial mortgage: To purchase a building, make renovations, or start construction, a commercial mortgage is a larger loan to finance those projects. You can expect a five-year term and monthly payments from Harbor Bank.

To apply for a business loan from Harbor Bank, you must reach out to one of their representatives to learn more about their application process.

Fundbox is an online lender that’s been around for quite some time. They offer unsecured business lines of credit, which means that you do not need to have assets to get funding. Additionally, Fundbox is known for its easy minimum requirements: in order to qualify for a business line of credit, you simply need to have been around for at least three months, generate $25,000 in monthly revenue, and have a personal credit score of at least 500.

Fundbox’s business lines of credit can go up to $100,000, and interest rates start at 10.1%. Fundbox’s line of credit term lengths last three to six months. You will need to apply online and sync your business bank account with Fundbox in order to receive funding if approved for a credit line.

Bluevine is another online lender that’s been around since 2014. The company offers business lines of credit up to $250,000 with terms of six or 12 months. To qualify, you’ll need at least 24 months in business, a FICO of 625 or more, and at least $40,000 in monthly revenue.