The Top 7 Local Small Business Loan Options in Ohio
Small business loans for Ohio-based businesses will come in a variety of forms. Perhaps you’re determined to keep it local and access funding for your Ohio small business through a lender who as embedded in your community as your business is. Or maybe you’re just looking for the small business loan with the best rate possible, whether it’s from an Ohio-based small business lender or a national one.
Either way, you’ve got some stellar sources to consider during your search for small business loans for your Ohio business. With this guide, we’ll cover the top seven Ohio-based sources of small business loans:
- Economic and Community Development Institute
- Huntington National Bank
- Ohio Capital Access Program
- Loan Loss Reserve Program
- Ohio Minority Business Direct Loan Program
- Advanced Energy and Efficiency Programs
- Collateral Enhancement Program
We’ll also throw in details on top online small business lenders that offer affordable and accessible funding nationwide—including in the state of Ohio.
Top 7 Small Business Loans for Ohio-Based Businesses
First, let’s take a look at what options Ohio-based small businesses have for funding. Many of the best Ohio small business loan options will be available through government-backed programs, which means low rates and long repayment terms for those Ohio businesses that are able to qualify.
However, government involvement in a lending program—whether through direct lending, guarantees, or loss reserves—means that a funding option will be harder to qualify for. Keep this in mind as you read through your Ohio small business loan options, and be sure to explore some contingency plans if your credentials don’t qualify you for these programs:
1. Economic and Community Development Institute
Small business loans for Ohio small businesses are available through the Economic and Community Development Institute, or ECDI for short. ECDI began in Columbus and has expanded to Cleveland, Akron, Cincinnati, Toledo, and Canton since.
If you’re looking for a large amount of funding, consider small business loans from ECDI, which can offer as much as $350,000 in capital with terms as long as five years. Submitting an application will cost you a $25 fee, and closing fees will be 5% of the loan amount. Be sure to note that you’ll need to attend a required training to be eligible for this Ohio small business loan.
ECDI also offers a microloan product they call the Small Business Solutions Loan. This Ohio small business loan program offers up to $2,500 in capital with a 12-month repayment term and a 7% fixed interest rates. To be eligible, you’ll need to either be a Women’s Business Center member or pay the $80 Women’s Business Center membership fee. You’ll also need personal credit of at least 590 and be eligible to receive SBA funds.
2. Huntington National Bank
If you’re looking for an SBA loan for your Ohio establishment, then Huntington National Bank will be a top option. In fact, Huntington Bank ranked number one of the top SBA lenders in Ohio in 2018 by a mile. In 2018 alone, Huntington Bank provided 2,073 SBA loans to Ohio small businesses with an average interest rate of 6.1%.
For context, second place went to KeyBank, who only provided 129 SBA loans with an average interest rate of 6.5%. Huntington National Bank’s average SBA loan amount was on the smaller side, though, at $198,585, so be sure to keep that in mind as you explore your SBA loan options for your Ohio small business.
As you consider your Ohio small business loan options, also be sure to consider the fact that SBA loans are pretty difficult to qualify for and will take a while to fund. Generally speaking, we typically see businesses with annual revenue of at least $180,000, personal credit of 680+, and at least two years in business get approved for SBA funding. If you’re not quite there yet, we suggest you consider your other Ohio small business loan options.
3. Ohio Capital Access Program
Run by the Ohio Development Services Agency, the Ohio Capital Access Program provides loan portfolio insurance for participating Ohio state banks. This loan portfolio insurance ends up working much like a loan guarantee in practice: It provides a pool of funds that a lender can tap into in the event of a default. As a result of this backup capital, participating lenders are more willing to take a risk on Ohio small businesses.
Small business loans provided to Ohio business through OCAP can be as much as $250,000 for working capital expenses and as much as $350,000 for fixed asset financing. If you’re investing in real estate, then the maximum repayment term will be 15 years. For equipment purchases, terms will cap out at seven years. And for working capital loans, terms will be up to one year long, with a bit of wiggle room beyond that for renewals.
One thing that’s crucial to note about this Ohio small business loan program: Borrowers will need to contribute a small amount to the lender’s reserve fund. This amount will typically be 1.5% to 3% of the loan amount, though the lender will decide what the actual percentage ends up being.
4. Loan Loss Reserve Program
If you need funding for a project that will make your Ohio small business more energy efficient, then you should consider the Loan Loss Reserve Program. The Ohio Development Services Agency runs this program through a collection of eight Port Authorities through the state of Ohio. The ODSA will provide credit enhancement to these Port Authorities as they originate loans to Ohio small businesses hoping to streamline their energy use.
Small business loans through this program will be available to Ohio small businesses and nonprofits. To be eligible, you will need to be able to demonstrate that your planned project would reserve at least 15% of previous energy use with any given energy metric. You’ll also need to demonstrate that you can repay the loan within 15 years or less.
If this sounds like the Ohio small business loan for you, you can contact any of the eight Port Authorities that participate in the program for more information on moving forward.
5. Ohio Minority Business Direct Loan Program
If you’re a minority business owner looking for local funding to purchase or improve a fixed asset, definitely look into the Ohio Minority Business Direct Loan Program. The loans available through this program consists of three parts: 50% of the loan will come from a bank, 40% will come from the program, and 10% will come from owner equity.
Ohio Minority Business Direct Loans offer funding from $45,000 to $450,000. Keep in mind: This amount will be 40% of the total project cost, so this Ohio small business loan program will be larger projects. The interest rate on Minority Direct Loans portion of the funding currently rests at a fixed 3%, though the program doesn’t regulate what interest rates for the bank portion will end up being. Repayment terms will be as long as 15 years for real estate financing and 10 years for equipment financing, but they won’t be any longer than the repayment term for the bank portion of the loan.
6. Advanced Energy and Efficiency Programs
If you’re looking for a small business loan to invest in an alternative fuel-centric project, then there’s also a niche Ohio small business loan program for you. The Advanced Energy and Efficiency Programs provides loan amounts from $250,000 to $750,000 and up to 75% of a project’s total eligible costs.
Loan amounts vary depending on the project and can be from $250,000 up to $750,000. Loan amounts will not exceed 75 percent of total eligible project costs. If you qualify and take on a loan through this program, you’ll have to provide monthly progress reports on the project along with additional financial reporting for three years after the project.
Repayment terms for these Ohio small business loans will be no longer than 15 years long, so you’ll have to demonstrate that your intended project will show returns within that time frame. To apply, you’ll need to send a letter of intent to the Ohio Development Services Agency. The letter should include a project overview, your qualifications, the project budget, and an estimated project timeline.
If your letter of intent suggests that your project is eligible for this Ohio small business loan program, then the ODSA will write back with directions for accessing the online application.
7. Collateral Enhancement Program
One last Ohio small business loan option to look into is the Collateral Enhancement Program. This program provides cash deposit accounts to enhance collateral coverage for qualified small business loan applications. If your Ohio small business is having trouble qualifying for a loan because you lack collateral, then this program could provide you with capital to fill in the gaps.
The deposit will last for up to five years, but the loan repayment term could stretch long: Real estate loan terms max out at15 years, equipment loan terms at seven years, and working capital loan terms at one year. If you take on a line of credit through the Collateral Enhancement Program for working capital expenses, then the maximum credit limit will be $35,000. Otherwise, the maximum loan amount will be $5 million. All in, beyond these limits set by the program, the direct lender will ultimately decide the terms attached to loans provided through the CEP.
Small Business Loans to Ohio Businesses: Online Lenders to Consider
Maybe even the top small business loans from Ohio-based lenders and programs aren’t the right fit for you. Because many of these top options will be administered through government programs, they’ll be pretty tough to qualify for. Plus, even if you do qualify, you’ll probably have to wait a while for your application and funds to process.
If you’re less than perfectly qualified, or you simply need a small business loan quicker than these local funding sources can provide it, then you should move your search to a more national level. Most online small business lenders will work with Ohio small businesses. So, if you’re not convinced that any of your Ohio small business loan options are the perfect fit for your business, then consider these top online lenders:
1. LoanBuilder, a PayPal Service
Ohio small businesses looking for short-term funding would do well to look into LoanBuilder, a PayPal Service. This online small business lender provides funding in the form of short-term business loans ranging from $5,000 to $500,000. Repayment terms can range from three months to a year long with factor rates from 1.025 to 1.19. Plus, unlike other short-term loan options that require daily payments, LoanBuild, a PayPal service will offer weekly payments.
You’ll need to come to the table with at least $120,000 of annual revenue, at least nine months in business, and a FICO score of 600+ to be eligible for this option. And if you do end up qualifying and accepting a loan from LoanBuilder, a PayPal Service, you could access funds as quickly as the same day you submitted your application.
Another online lender that Ohio small businesses should consider in their search for funding is BlueVine. BlueVine offers both invoice factoring and short-term business lines of credit. Invoice factoring from BlueVine offers financing of $20,000 to $500,000 for invoices from 1 to 12 weeks outstanding. For every week that your invoice goes unpaid, BlueVine will deduct a fee of 0.4% to 1% of the invoice value.
To be eligible, you’ll need at least $100,000 in annual revenue, at least three months in business, and 530+ credit. Also be sure to note that BlueVine only offers invoice factoring to businesses with B2B models, so if your Ohio small business is direct to consumer, then you’ll need to explore other options.
Luckily, BlueVine offers their short-term lines of credit to both B2B and B2C businesses that are working with at least $120,000 in annual revenue, at least six months in business, and 600+ credit. This product offers credit limits of $5,100 to $250,000 with rates starting at 6.9% and six-month repayment terms. You’ll also have to pay a 1.6% draw fee every time you tap into a BlueVine line of credit, so be sure to keep this cost in mind while weighing your options.
Finally, if you’re looking for a longer-term loan for your Ohio small business, then the online lender Fundation is certainly worth checking out. Fundation offers business term loans of $20,000 to $350,000 with repayment terms of one to four years and rates starting at 7.9%. And if you have at least $100,000 in annual revenue, a year in business, and 660+ credit, then you’ll be eligible for this online small business lender.
Plus, if you’re applying for a small business loan of $100,000 or less from Fundation, you’ll just need to provide basic identification and three months of business bank statements for their underwriting. Compared to the application process for your Ohio small business loan options, Fundation’s application will be a cakewalk. And if you end up qualifying for a small business loan from Fundation, you could access your loan proceeds in as little as a day.
Small Business Loans in Ohio: The Bottom Line
Now that you’ve made it through your guide to small business loans for Ohio-based businesses, what are your next steps? As you’ve likely gathered at this point, you’ll need to decide if you want to keep your search for small business funding local. Small business loans specifically for Ohio-based businesses are great options—if you have the time and credentials. If you need quick funding or you’re less than perfectly-qualified, though, you might need to start exploring your online small business loan options. Either way, be sure to shop your options so you know you’re taking on the most affordable debt possible.