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Illinois Small Business Loans and Grants

Illions presents an excellent opportunity for entrepreneurs looking to start their own business. However, many startups fail before they ever have a chance to gain traction due to difficulties securing business financing. In this article, we are going to take a look at numerous Illinois small business loans and programs available.

At a glance Throughout the United States, Illinois earns the 28th spot for starting or owning a small business. As of 2021, it counts over 1.23 million registered small businesses, with over 45% of the state’s workforce employed in this field. Illinois has local laws that support the industry growth with the average small business loan amount at around $37,971. 

Top 3 Options for Small Business Loans in Illinois

1. Illinois Bank & Trust

Backed by the nation-wide Heartland Financial USA, Illinois Bank & Trust is dedicated to providing local financial services for personal and business needs alike. Whether your Illinois small business is in need of new equipment, additional office space, or just a business line of credit, the bank offers numerous solutions, including government-guaranteed SBA loans, lines of credit, term loans, and more.

Some of other programs offered by Illinois Bank & Trust include:

  • SBA 7(a) program. The Bank’s 7(a) program provides long-term loans to help businesses cover expenses associated with expansion, restructuring, business development and refinancing, and more. Both small and large loan amounts are available, and the fees and rates are comparable to other, non-guaranteed loans. 
  • SBA 504 loans. This initiative primarily focuses on equipment and real estate acquisition, as well as ground-up construction or building improvements.
  • Other lending options. Additional lending options and tools available for small businesses include lines of crest, term loans, letters of credit, leasing solutions, and more.

2. Illinois Small Business Emergency Loan Fund

The Illinois Department of Commerce and Economic Opportunity (DCEO), in partnership with the Illinois Department of Financial and Professional Regulation (IDFPR), has established the Illinois Small Business Emergency Loan Fund with the goal to provide the state’s small businesses with affordable low-interest loans of up to $50,000. 

In addition, the Illinois state government has established the $636 million Business Interruption Grants (BIG) program to provide much-needed relief for small businesses who have suffered due to the Covid-19 pandemic.

All-in-all, the Illinois Small Business Emergency Fund offers the following products and services:

  • Illinois Small Business Emergency Loan. Small businesses may apply for a low-interest loan of up to $50,000. The loan must be used for working capital, with at least 50% of loan proceeds applied toward payroll or other compensation schemes, such as wages, salaries, paid leave, tips, or group healthcare benefits.
  • Business Interruption Grant (BIG) program. The BIG program allows eligible small business owners who have already received loans to convert them to grants in order to offset the significant losses encountered due to the COVID-19 pandemic.

3. Byline Bank

If you require a large, government-backed business loan, but don’t have sufficient assets, Byline Bank could offer some good options for you. 

Among other Illinois small business loan alternative, Byline Bank offers:

  • SBA 7(a) loans. The Bank’s 7(a) loans are backed by the SBA, ranging between 75% and 85%. For such loans, you would generally be required to put up collateral to cover the remaining 15% to 25%. However, with Byline Bank, you would typically not have to put up the entire amount. As such, Byline Bank is both an SBA Preferred Lender and one of the business SBA 7(a) loan providers in the United States.
  • SBA 504 loans and CAPLines. If you need a line of credit, real estate financing, or supplies, Byline Bank also offers SBA 504 loans and CAPLines.
  • Business and Industry loans. Eligible applicants can apply to receive a Business and Industry (B&I) loan as well. This scheme is sponsored by the US Department of Agriculture (USDA) and guaranteed by the government, allowing rural businesses to borrow between $1 and $10 million for terms ranging up to 30 years.
  • Franchise loans. Loans for franchises are available as well. The Byline Bank’s professional franchise lending team will help you to receive an SBA loan customized to your own needs. 
  • Loans for financial advisers. If you are a financial adviser, you are also welcome to apply for an SBA loan, - Byline offers loans between $150,000 and $5 million for a 10-year period of up to 100% funding.
  • Equipment financing. The Bank also provides flexible loan options for equipment financing.

Summary of Top 3 Illinois Small Business Loan Providers

Institution

Type of Financing

Loan Amount

Interest Rate

Loan Term

Illinois Bank & Trust

SBA 7(a) program

SBA 504 loans

Business lines of credit

Varies

It varies depending on the loan amount

Long-term

Illinois Small Business Emergency Loan Fund

Small Business Emergency Loans

Business Interruption Grants

Up to $50,000

Varies

Varies

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 - Best for Startup Loans

At Fundera, personal advisers are devoted to making the online application process as simple as possible. Fundera requires much less supporting documentation than conventional lenders, making the application and approval process much faster than usual.

The payment system is set up from the very beginning, which makes it easier for you to plan your budget and cash flow. However, there are certain trade-offs: while Fundera offers a higher lump sum amount, it usually requires collateral.

The maximum loan amount available at Fundera is $600,000, and repayments can be spread out over a five-year period.

2. Fundbox - Best for Lines of Credit

With Fundbox, you can receive a loan of up to $150,000 and repay it over 24 or 52 weeks, - and, if you can pay off the loan earlier, you won’t encounter any penalties. If you connect your bank account to Fundbox’s platform, you can expedite your application by providing the company with direct access to all the information necessary to make the funding decision. 

Even if you are a small business with a short credit history, Fundbox can often offer you a loan, without any additional origination fees. Every loan offered remains available for 30 days; after you accept the loan terms and conditions, you can expect to receive the funds as soon as the next day.

3. Ondeck - Best for Commercial Mortgages

Ondeck is another online Illinois small business loan option that might be a good fit for a young company without a lengthy track record. Ondeck isn’t required to report your account’s good standing to financial agencies, but it still does. This can prove beneficial for your new company in the long-run, especially if you need to establish a good credit history.

In addition, monthly payment rates with Ondeck are fixed, which can be convenient for planning your cash flow. The maximum amount for a term loan is $250,000. However, the maximum maturity period is only 18 months, which can be discouraging for businesses who wish to spread their loan repayment over a lengthier period of time.

Additional Financial Resources for Small Businesses in Illinois

When looking for a small business loan in Illinois, you might want to consider alternative resources in addition to conventional lenders. As such, Illinois Venture Capital Association and Illinois Department of Commerce offer valuable support and assistance for local entrepreneurs.

1. Illinois Venture Capital Association

A venture capital syndicate presents a great unconventional financing option available to Illinois residents. Such syndicates typically comprise a group of investors who seek to help new businesses in various fields. While these people look for new and unique business opportunities, your own prospectus may interest one of them to invest in your startup.

As with other financing options, there is no guarantee that you will, indeed, find funding, - but it is definitely worth trying! You can start by learning more about the Illinois Venture Capital Association and its requirements.

One of the unique benefits of venture capital funding is the expertise and experience that comes along with it. The investors will be able to provide valuable insight and guidance for your company because their profit will depend directly on your company’s success.

One potential drawback of venture capital funding is the fact that an external person will be involved in your business. Many times, small business owners are self-reliant and independent, and another voice with their own opinion on the way the company should operate can become an issue. So, make sure to consider all the pros and cons of this funding scheme.

2. Illinois Department of Commerce

If you need help applying for the PPP, or Paycheck Protection Program loan, you can start by attending webinars and virtual events held by the local government and Pritzker administration. Such webinars also provide general technical information and assistance for companies looking for help with SVO (Shuttered Venue Operators) grant programs, EIDL (Economic Injury Disaster Loan), the forthcoming EIDL Advance, as well as other small business services.

Business owners can also find out more about the qualification and application for financial assistance through the department’s neighborhood navigator partners or regional economic development teams. These local groups are community-based and offer important information for small businesses requiring help.

Other Resources for Illinois Small Businesses

In addition to finding financial assistance, starting and growing a small business comes with a lot of challenges. The resources below provide valuable information and guidance on various aspects of running your own business.

Opening a Business in Illinois

Contract Opportunities

Accessing Financing

How to Get a Small Business Loan in Illinois: Step-by-Step

Getting a small business loan in Illinois is not as difficult as it might seem. Certain steps are important, but, overall, the entire process is simply a matter of preparation. Below are some general steps you need to follow to apply for a small business loan in Illinois:

  1. Develop a business plan
  2. Perform a SWOT analysis
  3. Find lenders working with startups and young businesses
  4. Improve your credit score
  5. Examine alternative options like business credit cards or crowdfunding
  6. Prepare the paperwork to qualify for specific grants
  7. Collect detailed invoice/operational financials
  8. Perform a market analysis
  9. Organize a predictive analysis
  10. Research funding alternatives

Final Words

Without a doubt, starting your own company comes with certain challenges. Among the most common difficulties faced by young businesses are the initial costs: many individuals with ambitious business plans simply lack the resources necessary to implement their ideas.

Luckily, the state of Illinois has multiple business loan and grant options available to support the young entrepreneurs. When considering each Illinois small business loan, make sure to carefully weigh each option in terms of its advantages and risk profile. If you fail to find a suitable grant or loan, there are also numerous online financing options waiting to be explored, - so consider all the avenues available before making the final decision.