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Hawaii Small Business Loans

Financial analysis has shown that Hawaii is one of the best places for small business owners to start and grow their companies. Profiling of Hawaii in 2017 revealed that there were approximately 127,000 small businesses in the island state, a number that makes up around 99% of all businesses based in Hawaii.

At a glance Hawaii is the largest island chain globally and is the only U.S. state wholly made up of islands. Statistics show that small businesses were responsible for employing roughly 267,800 people in Hawaii in 2017. Furthermore, small business loans totaling 23,079—for under $100,000 (valued at $330.3 million)—were issued by Hawaii lending institutions according to these stats (Source: FFIEC). This article will guide you through the essential loans and grants available to small businesses in Hawaii. 

Top Three Hawaii Small Business Loan Options

U.S. Small Business Administration (SBA)

Instead of lending money directly to small businesses, the SBA sets guidelines for—and guarantees—all loans made by partnering lenders, micro-lending institutions, and community development organizations. The result is reduced risk for lenders and makes it easier for them to access capital which, in turn, makes it easier for small businesses to obtain a Hawaii small business loan.

To get a loan backed by the SBA, you’ll need to apply through a bank or lending institution that is SBA affiliated. Loans guaranteed by the SBA span from small to large and are used for most business purposes, including working capital and long-term fixed asset financing.

Some loan programs restrict how the funds can be applied, so inquire with an SBA-approved lender when seeking a loan. You can get amounts between $500 and $5.5 million, and your lender will find you the appropriate loan type for your business needs.

HawaiiUSA Federal Credit Union

HawaiiUSA Federal Credit Union, established in 1936, has branches in Oahu, Maui, Big Island, and Kauai. The union has more than 129,000 members, which includes a vast number of associational groups and companies.

HawaiiUSA Federal Credit Union is SBA affiliated and strives to find the loan option to best suit your needs. They offer SBA loans, business auto loans, business loans, and lines of credit. Capable business lenders in their employ will analyze your options and find the best possible loan rate for your business. Terms will vary for each loan. 

An example of loan options available would be the SBA 504 Loan Program which provides long-term, fixed-rate financing of up to $5 million for large-scale fixed assets that will promote business growth and job creation. No investment property financing is allowed.

Ohana Pacific Bank

Headquartered in Honolulu, Ohana Pacific Bank offers business check, savings, and money market accounts together with the following loan products:

  • SBA loans: Comprising SBA 7(a) loans, SBA 504 loans, and SBA Express loans, all of which are government-guaranteed.
  • Commercial Term Loans and Lines of Credit: These are available for additional working capital, short-term seasonal financing, emergency cash reserves, carrying account receivables, or purchasing inventory. The bank also offers a variety of secured and unsecured term loans designed to help your business grow.

  • Commercial real estate loans and lines of credit: Commercial real estate loans and lines of credit are available for financing the purchase of various commercial real estate properties.  

  •   Construction loans: Construction loans are on offer for new land development or improvements on an existing commercial property.
  • Professional loans and lines of credit

Ohana Pacific Bank also offers its lending products to professionals such as doctors, dentists, and accountants, to name a few. These products cater to things such as purchasing equipment, expanding your offices, or increasing your working capital levels.

Summary Table

Provider

Features

U.S. Small Business Administration (SBA)

Wide product range

HawaiiUSA Federal Credit Union

SBA-affiliated

Ohana Pacific Bank

Offers unsecured loans

Top Online Hawaii Small Business Loan Options

Going the regular banking route when applying for credit can be somewhat frustrating and time-consuming. This is because, generally speaking, you will need to provide a bank with a large amount of documentation and as it can take an extended amount of time before you receive an outcome. 

Banks are usually also stricter on personal credit scores, so it might be worth considering an online small business loan. These lenders provide quick outcomes and are more relaxed on credit score requirements. We’ll name and discuss some of them here.

1. OnDeck

OnDeck offers revolving lines of credit amounts of $6K to $100K with 12-month repayment terms and term loans of $5K to $250K with repayment terms of up to 18 months. Minimum requirements to qualify for these are:

  • Your business must have been operating for one year 
  • A personal credit score of 600
  • Business annual revenue of $100K
  • A business bank account

Besides interest—which you should discuss with your loan officer—OnDeck charges a once-off origination fee per term loan and a $20 monthly maintenance fee for lines of credit. These fees exist to cover the cost of servicing and maintaining your business financing. 

2. BlueVine

BlueVine offers invoice factoring credit lines of up to $5 million and revolving business credit lines of up to $250,000.

Minimum requirements for the above products are:

  • 530+ credit score
  • Be in business 3+ months
  • Monthly revenue of $10,000 
  • That your company is B2B

BlueVine will ask for some information on your business, details regarding your invoices, bank connection, or bank statements from your last three months in business.

3. Fundbox

Fundbox offers business term loans and revolving lines of credit up to $150,000. Features are as follows:

Term loan:

  • Get a once-off loan up to your approved limit
  • If eligible, you can take an additional term loan without reapplying
  • Choice of a 24- or 52-week repayment plan
  • Pay no origination fee and repay early without penalty fees

Line of credit:

  • Revolves, so funds are withdrawable as needed without reapplying
  • Choice of a 12- or 24-week repayment plan with every draw
  • Pay no origination fee and repay early without penalty fees
  • An excellent bridging finance tool

Additional Hawaii Small Business Financial Resources

Paycheck Protection Program (PPP)

The PPP is one way to access Hawaii small business grants. As a government-launched program, the PPP makes it possible for small business owners to access funds to cover eight weeks of their regular running costs like payrolls, rent, and any debts owed by the concern to its creditors. Repayments can be made forgivable.

You can gain access to the program through the SBA, which we have already discussed in detail.

Hawaii Business Support and Development Division

This link is a handy tool if you're seeking guidance on Covid 19 related issues.

Other Resources for Hawaii Small Businesses

First Nations Development Institute Grant 

First Nations has a grant-making scheme for native Hawaiian communities, which provides them with financial and specialized resources. The program is dedicated to the development of projects and businesses for these communities.

Hawaii SCORE

SCORE Hawaii provides mentorship and education to both soon-to-be entrepreneurs and existing small business owners.

How to Prepare for a Hawaii Small Business Loan

You must attend to the following before proceeding with your Hawaii Small Business Loan application:

  • Business bank account: You should have a business bank account. Should you be approaching a different bank for a loan, have at least three months of your existing bank statements available.
  • Credit score: Check and improve it if possible.
  • Business registration: Ensure that your papers and licenses are in order.
  • Business plan: Have your latest business plan in hand.
  • Business revenues: Try to highlight all positive revenues to catch the eye of the credit assessor.

The Bottom Line

When it comes down to small business operations and funding, there’s no shortage of assistance and options in the state of Hawaii. Bear in mind that economies worldwide place much reliance on the success of small businesses. Besides the many choices available, you can also go with an online loan option.