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Connecticut Small Business Loans

Without a doubt, small businesses are the heart of Connecticut’s economy, making up nearly all of the state’s employers. To help small businesses strive and grow, the state provides valuable financial and non-financial resources in the form of Connecticut small business loans, grants, coaching, workshops, and more. While many of these resources tend to focus on promising startups in competitive industries, as well as minority-owned businesses or those operating in low-income areas, there is something for everyone.

Written by Tetiana Sitiugina-Babiuk - Independent writer and content strategist, updated on 9/10/2021

At a glance The majority of businesses in the state of Connecticut are classified as small businesses. Almost 350,000 of these small businesses  employ over 700,000 employees. These small businesses create more than 7,000 new jobs every year and make up 99.4% of the state’s total economy. It’s clear that small businesses are the backbone of this state. There are many lenders in the area that provide Connecticut small business loans to help businesses develop. 

The Top Four Connecticut Small Business Loan Options

The biggest challenge that a small business owner faces is finding the best institution to acquire a loan. You have a few solid choices in the state of Connecticut. 

1. Charter Oak

Charter Oak has come a long way since it started as a lending institution in 1939, growing into a billion-dollar company. It’s the biggest lending union in eastern Connecticut and one of the state’s leading financial institutions. Its long history of operation in the Connecticut area makes it a trusted institution for many small business owners. 

Charter Oak offers various loans to Connecticut small businesses. Some of the benefits include easy application processes and quick decisions. Most of the loans offer flexible rates and terms, and payments depend on the type of financing that interests you. 

You can also apply for the paycheck protection program through Charter Oak. These loans have a 1% interest rate and a maturity of five years. You don’t need collateral or any personal guarantees to qualify for the loan. The paycheck protection program is a loan that you take out through the Small Business Administration. If the COVID-19 pandemic affected your business, you can apply for a paycheck protection loan through Charter Oak. Contact any of the Connecticut branches for more information on any of the loans available to your business.

2. Community Investment Corporation

Community Investment Corporation (CIC) has been providing financial support to small businesses throughout Connecticut and Rhode Island for over 50 years. While CIC is not technically a bank, it works as an economic development lender, issuing both direct small business loans and loans in partnership with the SBA Program.

Under CIC’s direct loan program, MicroNOW, small businesses can apply to receive up to $15,000 within two weeks. These loan funding can then be used for virtually any business purpose, including purchasing equipment or inventory, refinancing debt, working capital, and more.

Through the SBA Program, CIC issues 504 loans between $250,000 and $5 million, microloans between $15,000 and $50,000, and Community Advantage loans valued between $50,000 and $250,000.

3. Community Economic Development Fund

The Community Economic Development Fund is a nonprofit organization that helps businesses in Connecticut grow. Besides the various loans that the organization offers Connecticut small businesses, there are also plenty of resources that you can access. 

The CEDF is another place where you can access an SBA loan. They also offer a specific loan program for women and minority groups. You can contact the Business Advisory Service that the CEDF offers to small business owners for advice and other solutions. The organization can assist you with your business plan and help you see if you qualify for a loan before applying to another institution. 

The mission that the CEDF has is to educate small business owners, especially on financial aspects such as loans. This nonprofit has been serving the Connecticut community for more than 25 years. Before you commit to any small business loan, you should look at the CEDF website and see what they have to offer. 

4. Liberty Bank

With over 60 branches throughout Connecticut, Liberty Bank is a well-known lender among local small business owners and entrepreneurs. In addition to standard business bank accounts and digital banking, Liberty Bank offers various small business loan programs.

For example, through their Express Business Loan program, you can apply for a term loan or a line of credit of up to $250,000 and receive an approval as quickly as in 24 hours. Liberty Bank also offers term loans valued between $10,000 and $1,000,000. These can be used to finance long-term financial needs or working capital, or to purchase fixed assets like vehicles and equipment. 

Another financing option available through Liberty Bank is a government-guaranteed SBA loan, which offers competitive interest rates for long-term financing.

Top Online Connecticut Small Business Loan Options

Many entrepreneurs take an online loan in conjunction with their Connecticut small business loan. There are many online agencies where you can apply for numerous loans to give your Connecticut small business a financial boost. 

1. Credibly

For over a decade, Credibly has been dedicated to offering cheaper and faster small business loans to Connecticut-based entrepreneurs. These loans have generous repayment terms and quite relaxed eligibility requirements, and come in several different forms.

For example, you could apply for a government-backed SBA loan, with a term ranging between 2 and 25 years. While these often have more favourable terms and conditions than some other types of financing, they do require a little more paperwork to apply. 

If you need help meeting short-term financial needs, consider applying for a working capital loan of up to $400,000, with repayment terms ranging between 6 and 18 years. For longer-term financing, Credibly offers long-term business expansion loans, which can be repaid in 3 to 10 years. These range between $150,000 and $5,000,000 and should be used specifically for business expansion.

2. Fora Financial

Fora Financial is another online lender that has been offering small business loans to Connecticut-based businesses since 2008. Over the years, the company has developed a solid reputation as a reliable provider of short-term loans and merchant cash advances. The online approval process is quick and easy, with the approval taking only 24 hours. Once your application is approved, you can expect to receive the funds within the next three business days.

To qualify for a loan from Fora Financial, your business must have an annual revenue of $12,000 or more and be in operation for at least six months. In addition, it is important that you do not have any currently open or unsettled bankruptcies.

3. Fundbox

Fundbox is excellent if you’re dealing with a cash flow emergency. The company targets small businesses, independent consultants, and freelancers. You can apply for a credit line based on your current invoices, and Fundbox considers the risk of each invoice. Once you’re approved, you can access the funds quickly. You don’t need any collateral for the loan. The customer support that Fundbox offers its clients is some of the best in the financial industry. 

Apart from the interest rates, which can be pretty high, there are no added fees. You’ll make weekly repayments that are debited directly from your bank account. To qualify for a Fundbox loan, you need to have an annual turnover of at least $25,000 and a business history of a minimum of three months. Your credit score should be higher than 500, which is surprisingly low for a financial institution to consider. Make sure your business is registered before applying for the loan. 

4. BlueVine

Another lender that offers fast service to small business owners is BlueVine. The company offers competitive interest rates to its customers, and you need to repay loans over six to 12 months. Because of the short repayment period, your payments can be pretty high. The company offers loans to Connecticut small businesses with interest rates as low as 4.8%. 

To qualify for a loan through BlueVine, you need to have an annual turnover of $10,000 with a six-month business period. Your credit score should be 600 or more. You can also expect BlueVine to look into the history of your business, its presence on social platforms, and the creditworthiness of some of your customers. The application is made in four steps, and you need all your financial information, including your tax ID and three months bank statements. You also have to provide the details of your biggest customers. 

How to Prepare for a Connecticut Small Business Loan

Most financial institutions will require you to provide the financial details of your business. Make sure that you have the following information ready:

  • Your tax information. Prepare personal and business tax returns for the past several years.
  • Bank statements. Include any bank statements and financial documents that can show the lender that you will be able to repay the loan. Most of the time, the lender will ask for business balance sheets and income statements for the last 3 to 5 years.
  • An acceptable credit score of at least 600. Applicants with higher credit scores have better chances of qualifying for a small business loan in Connecticut. Focus on building your credit by paying off any outstanding debts and keeping your credit balances low at all times.
  • Register your business. Registering your business is necessary to ensure that you can sell your products or services legally. Consider consulting a lawyer if you need assistance with business registration.

Many lenders provide startup capital, but there are plenty of others who don’t. Ensure that you understand what you’re allowed to use the money on before committing to a loan. If you have any queries, contact the company’s customer care and ask as many questions as you can. 

The Bottom Line

If your business is experiencing some cash flow problems or you’re interested in expanding, a Connecticut small business loan can help. As the backbone of the Connecticut economy, your small business is essential to the state. Let a company that offers loans to small businesses assist you in reaching your goals.