Search
colorado

Colorado Small Business Loans

Colorado is among the fastest-growing states in the nation. Apart from its increasing population, the state's economy is also flourishing. In Colorado, it's not just large businesses that help the economy prosper; small businesses also play an essential role. If you own a small business, you might need to consider applying for a loan.

Written by Tetiana Sitiugina-Babiuk - Independent writer and content strategist, updated on 11/10/2021

At a glance If you’re looking for the best loan option in Colorado, you’re not alone. With a total number of 563,917 small businesses in Colorado, it's one of the best states for business loans. You can request business loans from local government and state agencies, private lenders, nonprofit lenders, and more in Colorado. 

The Best Small Business Loans Colorado Explained

1. Colorado Business Loan Fund

The Colorado Office of Economic Development and International Trade (OEDIT) manages the Colorado Business Loan Fund. OEDIT manages 14 different loans that help small business owners across the state. 

As a business owner, you can request one or several of these loans to kick-start your startup or improve an existing business. To get approved for a financial loan, you need to satisfy a job creation requirement. First, you need to create a job for every $20,000 that you request in loan funds. It means that if you request $100,000 in loan funds, you need to have created five jobs. 

Additionally, over 50% of the jobs created should be filled by people with low-to-moderate income. The loan application will require you to submit a financial projection and business plan. If you have an existing startup, you’ll need to submit your financial statement history.

In most cases, small business owners applying for the funds usually seek more than $100,000. But, if you apply for an amount less than that and you have five or fewer workers, you can qualify for a Micro-Enterprise Loan.

2. Colorado Enterprise Fund

Colorado Enterprise Fund is a nonprofit organization that specializes in helping people finance their ideas. As such, the organization offers specialized loans like the Healthy Foods Fund program, which provides up to $250,000 for agriculture businesses, food trucks, grocery stores, and other food-related ventures. 

Other financing options available through this institution include:

  • Valor loans for veterans: Offer up to $500,000 with a 10-year term.
  • SBA community advantage loans: $250,000 with a 25-year term.
  • Step-up loans: Offer up to $500,000 with a 10-year term.
  • Just in time lines of credits: Offer up to $100,000 with a 2-year term.
  • Commercial real estate loans: Offer up to $500,000 with a 7-year term.
  • Dream Big microloans: Offer up to $50,000 with a 7-year term.
  • Gap loans: Offer up to $500,000 with a 25-year term.

When you apply for funds, the organization will consider your personal credit score, industry experience, equity, payment history, collateral, and your company’s cash flow and profitability.

3. Colorado Lending Source

Colorado Lending Source is another nonprofit organization that has been providing financing to small businesses since 1990. In 2018, the nonprofit lender provided more than 221 loan fundings to businesses in Colorado. The lending institution is well known for its SBA loans.

SBA loans are government loans that offer a long-duration payment plan with low interest for lenders. Some examples of these SBA loans include general small business loans, microloans, commercial real estate loans, and community advantage loans.

Microloans are also called Colorado Main Street loans. It's a character-based microloan that helps you start or expand your business. The program offers up to $50,000, and it’s available to startups that can't afford a conventional loan.

Community advantage loans are primarily for underserved communities. If you own a small business in a community with a low income, then you might qualify for this loan. To apply for this

4. Bank of Colorado

Bank of Colorado has been supporting small businesses with local fundings for more than 100 years. The Bank has all the experience required to help you find the kind of loan you need. The Bank has branches throughout the state, including Denver, Akron, Fort Collins, and Colorado Springs.

Similar to other banks, all loan applications through the Bank of Colorado will require collateral. Fortunately, the collateral isn’t limited to real estate. You can use other assets as collateral, including equipment, inventory, and account receivables. If you have an agribusiness that requires funding, the Bank of Colorado is a great option to consider. 

The Bank has more than 100 years of experience working with agribusiness. And they have special financing programs for it, such as the agric loans and line of credits, and livestock loans. Bank of Colorado offers other financial funding options for small businesses. These include business loans, lines of credit, equipment loans, and more. 

5. Community Banks of Colorado

Community Banks of Colorado is a subdivision of NBH Bank. It’s an FDIC-insured bank that serves clients throughout Colorado. The Community Banks of Colorado has an extensive portfolio of products and services to satisfy small businesses, consumers, and commercial clients.

Besides being a nonprofit organization, small businesses can choose from a wide range of financing products. For instance, you might see that a term loan is best for significant investments, such as expanding your farm mortgage or constructing new buildings. But, if you’re looking for an emergency business loan, the business line of credit is a great option to consider. 

Additionally, Colorado's Community Banks also provide loan fundings for community associations, farms, and healthcare ventures.

Summary of the Best Small Business Loan Options in Colorado

If you own a small business and you’re looking for the best local funding option in Colorado, several options are available for your consideration. Each loan option has its benefits and downsides. So it’s best if you weigh up all your options and then decide which loan best fits your business needs. 

Here are some of the best local funding options to consider during your journey to search for small business funding for your Colorado business. 

Financial Institution

Amount of Loan

Interest Rate 

Requirement

Colorado Business Loan Fund

Loan amount of up to $200,000

interest rates of 8.25% to 9.25%

  • You need to create one job for every $20,000 in funds received
  • 51% of the jobs created should be filled by low- to moderate-income persons

Colorado Enterprise Fund

A maximum loan of up to $1 million

Fixed rate 

  • Minimum of one full-time employee or sole proprietorship

  • Less than $2.5 million in annual revenue

Colorado Lending Source

A loan from $25,000 to $5 million (depending on the type of loan you’re applying for)

From 9.75% to 12.75%

  • Business should be located within Colorado
  • The business should be for-profit
  • Other requirements depend on the type of loan you’re applying for.

Bank of Colorado

Maximum loan size of $350,000

Competitive interest rate 

  • Collateral is required
  • The credit score requirement depends on the type of loan you’re applying for. For instance, a construction loan requires a credit score of at least 630

Community Banks of Colorado

Maximum loan size of $500,000

1.00% fixed

  • Two months borrower deposit statement
  • Three years of tax returns, including all schedules and K-1s

Top Online Colorado Small Business Loans Options

In addition to traditional lenders, it is worth considering online lending options for funding your Colorado small business. You can fill out your application online, submit the required documents, and even receive the funds, right from the comfort of your home.  Impressively, you can receive your funding as quickly as in 24 hours.

Below are the top four online lenders that you should keep in mind.

1. Fundera - Best for Startup Loans

Fundera is the go-to online lender for every small business. It’s an all-in-one lending platform that focuses on systems that you need to manage your businesses' expenses and income. Since Fundera's inception, it has helped over 85,000 small businesses and has over $2.5 million in loans.

The online lender partners with more than 20 online lenders to help find various fundings for small businesses. The standard type of loans available via Fundera includes equipment acquisitions, startup, working capital, business line of credit, SBA loan, and more. 

Some of the benefits of using Fundera include:

  • No hidden charge
  • A fast and straightforward application process
  • Helpful resources and guides

To qualify for Fundera's loan application, you need to have:

  • A personal credit score of 550 or higher
  • A business of three years
  • At least $300,000 annual revenue

2. Fundbox - Best for Line Of Credit

If you want a flexible and quick line of credit, Fundbox is an excellent option to consider. When you apply with Fundbox, you can access up to a $100,000 line of credit.

Fundbox charges a token of 4.66% of the initial funding, and this depends on the performance of your business. 

Repayment of loans is made over 12 to 24 months, and it’ll be deducted automatically from your account every week. Fundbox has a swift and convenient application process with minimum borrower requirements. 

Some benefits of using Fundbox include:

  • Fast application process
  • No specific credit score requirement
  • You can re-apply for new credit once the initial credit is approved 

To qualify for Fundbox's loan application, you need to have:

  • A minimum of $50,000 yearly revenue
  • Business checking account
  • Three-month active bank statement of account

3. Fora Financial - Best for Merchant Cash Advance 

Fora Financial is an online lender that provides short-term small business loans and merchant cash advances. When applying for funding through Fora Financial, you can expect to receive approval as quickly as in 24 hours, with the funds available in your account within the first 72 hours.

Both merchant cash advances and short-term loans can range between $5,000 and $500,000, presenting an excellent opportunity for growing your business and infrastructure. To qualify for funding from Fora Financial, you need to meet the following requirements:

  • Personal credit score of 500
  • Minimum of six months in operation
  • Minimum annual revenue of $12,000 per year
  • No currently open or unsettled bankruptcies

Additional Colorado Small Business Financial Resources

Besides loans from online lenders and commercial loan programs, small businesses in Colorado can also access business grants. Unlike a loan that requires a payback, grants are like free funding - you don't have to pay them back.

1. Advanced Industries Early-Stage Capital and Retention Grant

Typically, the market tends to under-invest in early-stage technologies. To fill the gap left by the market, the Global Business Development division has established the Advanced Industries Early-Stage Capital and Retention Grant. As such, if you have an early-stage startup business with a product with a market in Colorado and the world, this grant is the best option to consider. 

To qualify, your startup must be under one of these categories:

  • Electronics
  • Bioscience
  • Energy
  • Aerospace
  • Manufacturing
  • Information and technology
  • Infrastructure engineering

You can access up to $250,000 if you meet the requirements, but the grant award maximum can be lifted if your project impacts several of the advanced industries listed above. In addition, the grant committee will prioritize projects that:

  • Engaged with incubator or accelerator program
  • Participated in an entrepreneurship program
  • Were referred by an angel investor or venture capital group that determined that the technology has commercial potential
  • Develop technology licensed from a Colorado research institution

2. Collaborative Infrastructure Grant

The Collaborative Infrastructure Grant focuses on companies that support the state's advanced industries. These companies include supply chain management, manufacturing, technology, and research and development. 

Companies that meet the grant requirement can secure up to $500,000 with at least a $50,000 grant.

3. Business Foundations Technical Assistance Program

The Business Foundations Technical Assistance Program aims to provide grants and technical assistance to Colorado-based small businesses in order to help them legally establish themselves. The program offers three training sessions along with a small grant of up to $1,200 per business to help recover the costs of the training.

The three training sessions include:

  • Legal Formation and Registration. The training will teach small business owners how to legally incorporate the business and access government grants and training programs.
  • Accounting and Finance. This training will teach entrepreneurs to manage the business accounting system and report the company’s financial information.
  • Digital Marketing and e-Commerce. Finally, this training session aims to help business owners to bring their business online to increase brand awareness, improve client relationships, and take advantage of new profit opportunities.

If your Colorado small business has no more than five employees, you are welcome to apply for this grant.

How to Prepare for Colorado Small Business Loans

Once you discover which Colorado small business loans you want to consider, you can focus on putting your best into the application process. Though lenders have different criteria for evaluation, there are some things you can consider to help increase your chances of qualifying. 

1. Develop a Good Business Plan

A thorough business plan will help the lender to understand better how your company functions. Create a well-organized document outlining your business vision, goals, and achievements. In addition, make sure to include important information such as your company’s financial statements, your credit rating, proof of the length of time you’ve been in operation, information on stakeholders and suppliers, and more.

2. Attain a Good Credit Score

Prior to applying for a loan, you can check your business and personal credit ratings online. If the ratings are not high enough, you can improve them by paying off any overdue accounts, regularly paying bills, keeping credit balances low at all times, and correcting any mistakes in the credit report.

3. Maximize Your Business Revenue

You can increase your company’s bottom line by reducing operating expenses, adjusting product pricing, and exploring new marketing strategies. For example, it’s a good idea to make sure that all of your sales representatives are trained in upselling and cross-selling techniques. Establishing a strong online presence is also an excellent way to increase your brand awareness and expand the potential customer base.

The Bottom Line

Starting a Colorado small business isn’t easy, but there are several loans that you can use to achieve your business goals. Whether you’re just starting your business or you want to expand an existing one, several local and nonprofit business loans are available for you. However, if you don't qualify for these options, remember that several small online business funding sources are also available.