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Connecticut Small Business Loans

There are various options you can choose from when looking into a financial boost for your business. You can use traditional financial institutions such as local banks. Each institution has benefits but also a few disadvantages. You can decide which loan would best suit your individual business needs.

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. Fast Capital 360

Fast Capital 360 offers Connecticut small business owners a variety of loans depending on their needs. You can apply for a working capital loan, SBA loan, or short- or long-term loans. The company offers quick applications and feedback within 24 hours. If you apply and you’re denied, it won’t affect your credit score. You can borrow up to $500,000, with interest rates starting at 7%. Repayment can take place between one and five years.

Fast Capital 360 offers alternative loans to small businesses that don’t consider your financial history. The company is a third-party lender and looks at your business’s overall health instead of simply looking at your credit score. Fast Capital 360 can give you various options for loans, and you can decide which loan is best suited to your needs. 

You can also apply for SBA loans through Fast Capital 360, which the company can approve within a week. This is the slowest program that Fast Capital 360 offers since its emphasis is fast loans so that you don’t need to wait for financing to carry on with your business activities.  

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. Local Banks

Your local bank is always a good option when looking into a Connecticut small business loan. A bank will look at your credit score, but the interest rates you pay are often lower since the bank doesn’t have to take risks with the loans they approve. Most banks will offer various loan options for small businesses with different terms and interest rates. 

You’ll also be able to access an SBA loan through your local bank. Approval for an SBA loan may take a little longer through your bank, where institutions dedicated to small business loans can speed up the process. 

Your local bank will be willing to help your small business to grow, and you know that the terms and conditions of a bank loan will be reasonable.

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. Kabbage

Kabbage gives small businesses quick access to funds when you need them. This company sees itself as a disruptor in the financial industry. Besides the fact that you can qualify for a loan with one online application, you can also qualify without a strong credit score. Kabbage offers its users an intuitive, easy-to-use platform that’s secure. It’s also backed by giants in the industry, such as KPMG and Santander. 

Once you’ve qualified for credit, Kabbage will send you a debit card to make payments more manageable. The company works on a strict six-, 12-, or 18-month repayment plan. You can borrow up to $250,000, which makes the repayment terms seem a bit daunting. Many entrepreneurs welcome the fact that they can have a short and transparent relationship with a lending company. 

Kabbage customer support is available seven days a week. The representatives will assist you in a friendly and efficient manner. You should be aware that Kabbage has some of the highest interest rates in the industry, mostly due to the fact that they take on high-risk clients. The company also has a complicated structure, and you could struggle to figure out exactly how much you need to put aside to pay back. There are also no incentives to pay the loan off early, although there are no prepayment fees. 

2. OnDeck

OnDeck offers fast loan approvals, claiming that their application process only takes 10 minutes. The company doesn’t require any collateral for short- or long-term small business loans. You can access loans between $5,000 and $500,000. OnDeck offers various loan options and flexible payment plans to suit your specific business needs. The company offers excellent customer support through the application process and gives discounts for prepayment of loans. 

OnDeck has received excellent reviews from the financing industry. Unfortunately, the company doesn’t lend to all industries. Some loan options have high fees, and all loans incur debt. OnDeck prides itself on being more lenient than other providers and only expects a credit score of around 600. You can choose loan terms between three months and three years with fees between 0.4% and 0.43%. Origination fees depend on the profile of the small business. APR fees can be high. To qualify for a loan, you need to have a $100,000 annual turnover and have been operating for at least one year. There should also be no bankruptcies in your recent history. 

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
  • Bank statements
  • An acceptable credit score of at least 600
  • Register your business

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.