illinois

An In-Depth Look at Illinois Small Business Loans and Grants

Small businesses often have an issue with finding funding. This why many startups fail to gain traction. Many people don't realize that there are many funding options available, which new business owners can take advantage of. In this article, we’ll examine the small business loan requirements in Illinois.

At a glance Illinois is a state where small businesses can thrive, as it’s one of the best places for start-ups to get a business loan. Its local laws allow for growth in the industry, with the average small business loan amount sitting at $37,971Illinois currently has more than 1.23 million registered small businesses. Throughout the US, it’s ranked as the 38th state for owning or starting a small business. In fact, more than 45% of the workforce in Illinois is employed through small businesses. In this article, we will look at the top business loans in Illinois.    

Top Illinois Small Business Loan Options

1. The Huntington National Bank

Huntington Bancshares Incorporated is a major bank holding firm with assets of $101 billion. Individuals, small companies, and private corporations are all eligible for loans. Commercial term loans, lines of credit, and government-backed loans are the three types of corporate financing the entity provides. 

Huntington Bank offers the 7(a) program, which requires insurance but offers the exact same enterprise cost loans for equipment, business debts, office furniture, and property loans. However, there are different rates and terms lasting up to 25 years. The 504 unsecured loans initiative focuses on property and equipment funding, with the creation of employment as a requirement.

Finally, Huntington offers SBA Express Loans, which enable small companies to get lines of credit. The rates and terms are flexible and help balance short and long-term requirements while also aiding enterprises in achieving their short and long-term objectives.

2. JPMorgan Chase Bank

Chase is one of the country's leading private banks and a popular provider in Illinois. Despite the fact that institutions like Chase have become stricter in their lending requirements since 2008, the firm still offers a vast and competitive range of products that small companies can use. You must apply for a Chase business loan in person, unlike many of its smaller rivals.

Chase Bank is generally regarded as having some of the country's highest, if not the best, lending rates. Such elite prices are only open to a select group of people. Yet, if you have a healthy, successful business and excellent credit, it's certainly not a bad thing to speak with a loan officer at your nearest Chase Bank to see if you qualify for finance.

Credit Lines

Getting a line of credit means you’re given a credit cap that you can use for as long as it’s active. You can take out as much money as you want just don’t exceed the total credit limit. You’ll only pay interest on the portion of credit that you use. Most credit lines are revolving, which means that when you pay off your balance, you'll have more funds available.

Business Term Loans

Term loans for businesses are a type of finance that allows you to borrow money for your enterprise. A term loan offers you a lump sum in return for a commitment to pay a fixed amount back over a certain period of time, plus interest. Payments are made over the course of that time span, which is referred to as the "term."

SBA Loans 

SBA loans are partly guaranteed by the Small Business Administration. This aspect entitles you to better terms and rates than your application profile usually permits. It’s an ideal choice for many small business owners in Illinois.

3. Byline Bank

If you need a big, government-backed business loan but don't have much in the way of assets, Byline Bank could be a good option. Its 7(a) loans are backed by the SBA in a range of 75% to 85%. Other lenders can require you to put up collateral to cover the remaining 15% to 25%. Byline Bank, on the other hand, doesn’t typically force you to put up the whole amount.

It's both an SBA Preferred Lender and one of the country's busiest SBA 7(a) loan providers. If you need supplies, real estate finance, or a line of credit, it also offers SBA 504 loans and CAPLines.

Besides SBA 7(a) loans, 504 loans, and CAPLines, Byline Bank provides a variety of other lending options. Eligible parties can also apply for Business and Industry (B&I) loans from the USDA. This government-guaranteed scheme, sponsored by the US Department of Agriculture, allows businesses in rural areas to borrow between $1 and $10 million for terms of up to 30 years. 

Loans for franchises are available too. With a professional franchise lending team, you can get a customized SBA loan. If you’re a financial adviser, you can also get an SBA loan. Byline Bank offers finance in this regard of between $150,000 and $5 million over a 10-year period of up to 100% funding. It also offers flexible loan options for new equipment purchases, leasing buyouts, and provider payments.

Institution

Type of Financing

Loan Amount

Interest Rate

Loan Term

The Huntington National Bank

SBA 7(a) scheme

SBA 504 loans

SBA Express Loan

Between $5,000 and $5 Million

It varies depending on the loan amount

Up to 25 years

JP Morgan Chase Bank

Credit Lines

Business Term Loans

SBA Loans

$10,000 to $500,000

Starting at $5,000

$350,000 to $5,000,000

Variable and commercially indexed to LIBOR, can be fixed or adjustable

12 to 24 months

12 to 84 months

3 to 25 years

Byline Bank

SBA 7(a) loans

SBA 504 loans

CAPLines

Business and Industry Loans

Franchise Loans

Equipment Financing

$1 to $10 million depending on loan type and the collateral that you are able to put up 

Varies according to loan type, amount, and repayment term

Up to 30 years

Top Online Illinois Small Business Loans Options

1. Fundera

At Fundera, personal advisers are available to help simplify your online application. Rather than stressing the pace of the application and approval process, Fundera doesn’t require as much documentation as conventional lenders, which automatically speeds things up.

The payment system is set from the start, which makes it easier for you to plan your cash flow and budget. That said, there are still a few trade-offs. Although Fundera provides a higher loan sum, you may not like the fact that it normally requires collateral.

The largest maximum loan amount at Fundera is $600,000, and repayments are spread out over a manageable five-year period.

2. Fundbox

At Fundbox, you can loan up to $150,000 and repay it over 24 or 52 weeks. If you’re fortunate enough to be able to pay off the loan early, there are no penalties involved. Connecting your checking account to Fundbox's framework expedites your application and provides the entity with direct access to the facts required for an informed decision.

Even if you have a small company with a short credit background, Fundbox can help you obtain a loan, and it doesn’t charge an origination fee. Every loan it offers is available for 30 days. Once you’ve accepted the loan terms and conditions, the funds will be available to you as soon as the next day.

3. Ondeck

Ondeck is another choice that might be a good match for a small business without a track record.  The entity isn’t required to report your account’s good standing to financial agencies, although it does. This will be beneficial to your new small business in the long run if you need to establish a credit background.

Moreover, monthly payment rates are fixed, which can help you better plan your cash flow.

The maximum term loan amount is $250,000. However, the comparatively short maximum maturity period of 18 months may be discouraging to businesses who want to spread their loan payments over a more extended period of time.

Additional Illinois Small Business Financial Resources

Illinois Venture Capital Association

Another finance option available to Illinois residents is a venture capital syndicate. It’s typically a group of investors who seek to aid new companies in various sectors. While these entities seek new and unique business opportunities, your prospectus may intrigue a backer to invest in your startup. As with all financing options, there’s no guarantee that you’ll find funding but it’s certainly worth investigating. The Illinois Venture Capital Association is a good place to start.

One of the benefits of venture capital funding is the experience and expertise that comes along with it. The investors provide guidance and insight for your company. They’re committed to your success because they, in turn, make a profit.

The potential drawback to these funding types is the involvement of another person. Small business owners are independent and self-reliant. The addition of another voice with a say in the operation of the company can be an issue. Remember, you must weigh the cost against the benefit in any funding source.

Accessing Financing

Other Resources for Illinois Small Businesses

Illinois Department of Commerce

Small businesses can get help applying for the PPP by attending virtual events and webinars hosted by the Pritzker administration. These webinars also provide general technical assistance and information for companies looking for help with EIDL, the forthcoming EIDL Advance, and SVO grant programs, as well as other small business services. 

Businesses can also learn more about the application and qualification of financial assistance through the department’s regional economic development teams or neighborhood navigator partners. These local groups are community-based and can offer valuable insights for small businesses requiring aid.

Opening a Business

Contract Opportunities

How to Prepare for an Illinois State Business Loan

Applying for Illinois small business loans is not as difficult as you might imagine. Certain steps are necessary, yet, on the whole, the process is a matter of preparation. We’ve listed some steps to assist.

  • Create a business plan
  • Complete a SWOT analysis
  • Find lenders working with young companies
  • Improve your credit rating
  • Examine options such as crowdfunding or business credit cards
  • Get paperwork ready to qualify for specific grants
  • Gather detailed invoice/operational financials
  • Complete a market analysis
  • Organize a predictive analysis
  • Examine funding alternatives

Bottom Line

To answer the question: “How to get a small business loan in Illinois?” you need to explore all the available funding options. The most difficult part of starting a company is also the initial costs. Many individuals have fantastic, ambitious, and imaginative business plans, but the majority lack the necessary resources to see their ideas through. 

That’s why it’s crucial to investigate all possible investment sources, such as the ones we’ve listed above.  

You should always weigh each option against its risk profile as well as its advantages. If you can’t find a suitable loan or grant opportunity, there are also online finance options that you can explore. While no finance is ever guaranteed until approval, it’s worth considering all of the avenues available to you in Illinois.