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Indiana Small Business Loans and Grants

A lack of funding is one of the main reasons businesses fail within the first few years of starting out. Entrepreneurs, who are just embarking on their journey, often fail to realize that there are many loan and grant options available to them in Indiana. In this article, we analyze and compare Indiana’s top small business loans and grants.

At a glance Currently, there are more than 451,000 small businesses in the state of Indiana. This economy employs about 1,6 million people, which is more than 99% of the private workforce. In Indiana, small businesses can get loans between $13,000 to $1.2 million, making it one of the best states for starting or owning a business.

Top Indiana Small Business Loan Options

Let’s begin by taking a closer look at some of the best small business loan options in Indiana:

1. Community First Bank of Indiana

Community First Bank of Indiana is dedicated to supporting local small businesses through a broad array of commercial loan products that meet diverse business needs. Some of the small business loan types offered by the Bank include:

  • Commercial term loans. With repayment terms between three and seven years, commercial term loans can be paramount to help your business meet its long-term financing needs. These loans come with either fixed or variable interest rates and can be used for equipment purchases, buy-outs of equity partners, and other business needs.
  • Commercial mortgages. Community First Bank of Indiana offers commercial mortgages ranging between 15 and 20 years, with a variety of interest rate options available.
  • Working capital lines of credit. Working capital lines of credit are reviewed annually and priced relatively to the prime lending rate. These loan options are ideal for seasonal businesses or businesses on a growth trend.
  • Commercial construction loans. The commercial construction loans offered by the bank are structured on a variable or fixed rate basis with interest-only payments.

2. 1st Source Bank

For more than 155 years, 1st Source, based out of South Bend, has provided clients with a friendly and convenient way to access financing. The bank is now the largest privately-owned financial institution in the region. 

1st Source Bank has many finance options for small businesses and start-up companies, such as:

    • Term loans. 1st Source Bank offers term loans that cover up to 100% of the item you are financing, with a repayment period of up to 10 years. You can use a term loan to finance anything from equipment and vehicles to working capital.  
    • SBA loans. As an award-winning SBA Preferred Lender, this bank offers SBA loans ranging from $5,000 to $5 million. The repayment terms are generally longer than that of a traditional business loan. Plus, interest rates are capped and are typically more favorable than the average interest rates on the market. 

  • Revolving lines of credit. 1st Source Bank also provides secured and unsecured revolving lines of credit. This is a suitable finance solution for short-term cash requirements, periodical credit demands, emergency funds, and purchase inventories. 
  • Other types of financing. 1st Source Bank also offers loans for specialty equipment, as well as agricultural loans.

3. German American

Small companies are critical to the economy and workforce in the U.S.A. German American Bank collaborates with the United States Small Business Administration (SBA) to provide financial assistance to new and emerging small businesses. SBA loans are federally guaranteed and have more flexible debt arrangements, longer repayment terms, and smaller down payment options.

Small business entrepreneurs commonly use 7A Loans as a main source of funding. This platform offers long-term funding to growing companies for a range of purposes, including working capital, commercial property, expansion, facilities, and inventory. 

Small companies can get funding through 504 loans, which can help them expand and create jobs. This loan program encourages economic growth by providing long-term funding with fixed rates. The finances can be used for the purchase of fixed assets to increase or modernize your businesses.

4. Freedom Bank

As a locally owned and operated community bank, Freedom Bank serves Spencer, Dubois, and surrounding counties within Indiana. In addition to personal and business banking services, Freedom Bank offers an array of small business loans in Indiana, including:

  • Commercial real estate and building loans
  • Business acquisition loans
  • Machinery and equipment loans
  • Rental property loans
  • Construction loans
  • Seasonal operation loans
  • Agricultural loans
  • Lines of credit for inventory and receivables
  • Refinance and consolidation loans
  • Term notes for most business assets

While the bank doesn’t go into much detail about the terms and rates offered on different small business loan products, they are readily available to discuss your options over the phone.

Institution

Type of Financing

Loan Amount

Interest Rate

Loan Term

Community First Bank of Indiana

  • Commercial Term Loans
  • Commercial Mortgages
  • Working Capital Lines of Credit
  • Commercial Construction Loans
  • Varies according to loan type
  • Varies according to loan type
  • Varies according to loan type
  • Varies according to loan type
  • Varies, fixed or variable
  • Varies, fixed or variable
  • Priced relatively to the prime lending rate
  • Varies, fixed or variable
  • Three to 7 years
  • 15 to 20 years
  • Ongoing revolving credit
  • Varies according to loan type

1st Source Bank

  • Term Loans 
  • SBA Loans
  • Business Acquisition Loans
  • Farm Loans
  • Revolving Lines of Credit
  • Varies according to the type of loan
  • $5,000 to $5 Million
  • Varies according to loan type
  • Varies according to loan type
  • Varies according to credit approval
  • Varies according to the type of loan, credit score, amount, and terms.
  • Below market interest rates
  • Also varies 
  • Also varies
  • Also varies
  • Varies according to loan type
  • 3 to 20 years
  • Up to 10 years
  • Varies according to finance amount
  • Ongoing revolving credit

German American

  • SBA 7A Loans
  • SBA 504 Loans
  • Up to $5,000,000
  • Up to $5,000,000

Below market interest rates

Up to the 25 years SBA standard maximum

Freedom Bank

  • Commercial Real Estate and Building loans
  • Business Acquisition Loans
  • Machinery and Equipment Loans
  • Rental Property Loans
  • Construction Loans
  • Agricultural Loans
  • Lines of Credit for Inventory and Receivables
  • Refinance and Consolidation Loans

Varies according to loan type

Varies according to loan type

Varies according to loan type

Top Online Indiana Small Business Loan Options

In addition to traditional lenders, such as commercial banks, online lending platforms often offer viable alternative options for small business financing.

1. Credibly - Best for SBA Loans

Credibly is a reliable online lender that has been offering financial products to Indiana-based small businesses for over 10 years. The company is dedicated to creating funding opportunities available to a broad range of customers. As such, its loans come with relatively lenient eligibility criteria, with a minimum credit score of only 500.

With Credibly, you can choose among seven different types of small business loans. One of the most popular types is a working capital loan, which works slightly differently from a typical term loan. Here, instead of paying a regular interest rate, you would need to pay a lump sum equal to a certain percentage of the total loan amount.

Other loan options offered by Credibly include lines of credit, business expansion loans, SBA loans, merchant cash advances, and more.

2. Biz2Credit - Best for Term Loans

Biz2Credit is a trusted online lender providing small business loans to entrepreneurs in Indiana and around the country since 2007. The company is known for its simple application process and quick turnaround times: you can expect to receive the funds within 72 hours of application.

Biz2Credit offers three main types of financing: term loans, commercial real estate loans, and working capital loans. While term loans are limited to $250,000, two other types of financing can help to fund much larger projects, with loan amounts ranging up to $6 million. The interest rates are also reasonable, starting at around 8.99% for all types of loans.

Keep in mind, however, that Biz2Credit’s eligibility requirements and minimum credit score can be tough to meet for startups and new businesses.

3. Fundbox - Best For Line of Credit

Fundbox is a fintech company and an online lender providing lines of credit and small business loans to entrepreneurs not only within the state of Indiana, but nationwide as well. With Fundbox, you will enjoy an easy and quick application process, as well as fast turnaround times. In addition, the company doesn’t require guarantees, has low minimum credit score requirements, and doesn’t charge any additional credit fees.

Applying for a business line of credit through Fundbox can provide you with flexible funds of up to $100,000. However, in order to qualify, you need to make sure that your business has been in operation for at least three months and has an annual revenue of at least $25,000. In addition, a minimum credit score of 500 is necessary.

4. Fundera - Best for Startup Loans

If you are looking for a personalized online term loan application experience, Fundera is the way to go. This online lender provides you with a personal advisor who will support you every step of the way.

In addition, Fundera is known for its relatively high maximum borrowing limits, ranging up to $600,000. However, loan collateral is usually required. The maximum repayment period is five years, with a fixed repayment structure. This means that you will be able to easily plan your company’s cash flow to accommodate loan repayments. 

Another great thing about applying for a loan with Fundera is the fact that it demands less supporting documentation than traditional lenders, which speeds up the loan application and approval process considerably.

Additional Indiana Small Business Financial Resources

In this section, we discuss some other avenues and resources available to small business entrepreneurs in Indiana. 

Southwest Indiana Chamber

The Southwest Indiana Chamber has a page dedicated to financing options for small businesses. They also offer many other resources that Indiana business owners can take advantage of. 

LISC Small Business Relief Grants

LISC is a nationwide agency for small business funding that has both Indianapolis and national offices. The organization primarily provides investments for people from minority groups, women, and immigrant-owned companies in traditionally underprivileged areas. LISC Indianapolis has awarded 76 $5,000 grants to minority, refugee, and women-owned small companies.

Additional Small Business Guides

Here are guides and resources for opening a business in Indiana:

Learn how to market to the government of your state or municipality with these resources:

The online Indianapolis Public Library has a plethora of resources available. Here are a few of them:

Bottom Line

There are many unique and innovative business ideas out there, yet funding is often an issue that prevents businesses from reaching their goals. That’s why it’s important to look at all the financing options available to see which one will best help your business. From state grants and small business loans to business credit cards and collateral financing, there are numerous options available for any small businesses in Indiana. 

Of course, every option has its risks and advantages. You will have to weigh each loan type against each other to see which one will most help your business. If you have the right business plan and enough passion, you will find the funding you need to get your business off the ground.