Kentucky Small Business Loans

Small businesses are an essential part of Kentucky's economy. The latest Small Business Administration statistics show that there are around 344,000 small businesses in Kentucky, accounting for around 99% of all Kentucky-based businesses. Small businesses, employing a workforce of about 687,000 employees, flourish in Kentucky.

At a glance Lending institutions disbursed some 46,700 loans—under $100,000—totalling around $683.1 million in Kentucky (Source: FFIEC). Comprehensive analysis shows that the Bluegrass State is one of the best places for small business owners to achieve growth—by getting a business loan or obtaining available Kentucky small business grants.

Top Three Kentucky Small Business Loan Options 

Let’s take a look at three of the best Kentucky small business loans on the market:  

Small Business Administration (SBA)

The SBA is a government agency established in 1953 to support small businesses and entrepreneurs throughout the United States of America. Represented in every state, one of the SBA's primary functions is to “partner” with selected banks in each state. The SBA guarantees the repayment of loans disbursed to small businesses by those banks.

In Kentucky, the SBA has teamed up with local banks to ensure that credit facilities are quickly accessible for eligible small business owners. According to Kentucky Bank, an SBA lender itself, two of the most popular SBA loans are the SBA 7(a) loan and the SBA Express loan.

An SBA 7(a) loan is limited to $5 million. For loans granted under this program, the SBA guarantees 85% of amounts up to $150,000 and 75% of amounts exceeding $150,000. The SBA Express loan is limited to $350,000, of which the SBA guarantees 50%.

Should you wish to apply for any of these loans, you’ll need to find a bank affiliated with the SBA.

Commonwealth Bank and Trust

Commonwealth Bank and Trust is a regional bank with offices in and around Louisville, Kentucky. Many of their clients are local businesses who work in a wide range of industries. 

Their loan products on offer are:

  • Owner-occupied real estate
  • Working assets line of credit
  • Equipment loans
  • Lines of credit
  • Investor credit
  • SBA loans
  • Visa credit cards

Eclipse Bank

Eclipse Bank is a medium-sized regional bank situated in Louisville, Kentucky. 

They provide:

  • Commercial real estate loans
  • Business lines of credit
  • Business term loans

Summary Table



Small Business Administration (SBA)

Government backing

Commonwealth Bank and Trust

Various loan products

Eclipse Bank

      Provide specified loan officers

Top Online Kentucky Small Business Loan Options 

A much quicker way to obtain Kentucky small business loans is to go the online lending route. Online lenders also tend to be more forgiving to businesses who have poor credit ratings. Here are some lenders to consider:

1. Kabbage

Kabbage is one of the very few lenders that don’t have minimum credit score requirements. They prefer to evaluate a business based on its performance. This, however, does increase the risk attached with the loan, which also makes this funding option more expensive. 

Kabbage ensures quick application processing, providing you with a decision within hours of submission. Once approved, you’ll get a Kabbage card that gives you Visa-linked access to your line of credit.

Kabbage offers various types of business loans ranging from $2,000 up to a maximum of $250,000. Rates are between 20% and 80% APR and terms are 6, 12, or 18 months. 

To qualify for a loan, you’ll need to prove that your business has a minimum revenue of $50,000 a year. Alternatively, you can show that you have had an average monthly revenue of $4,200 over the past three months. A final, non-negotiable requirement is that your business must have been in operation for at least one year.

2. National Funding

National Funding strives to provide customized options and personal service. This lender also provides lending options for business with bad credit. Their small business lending solutions include loans and equipment financing.

Small business loans on offer range from $5,000 to $500,000, allowing you to secure working capital for payroll, inventory, marketing, taxes, and other company-related expenses. They also provide equipment financing and leasing up to $150,000.

The cost of financing with National Funding includes an origination fee of 2% of the borrowing amount and then a once-off fee of between 17% and 36% of the said amount. In relation to collateral, a personal guarantee is a prerequisite.

You need to have been in business for at least 12 months to qualify for a loan with National Funding. You also have to generate revenue of at least $150,000 per annum, and have a credit score of at least 500. You’ll need to show an average bank balance of $1,500. Finally, if you are applying for a merchant cash advance, you will need to prove that you have had $3,000 per month in credit card sales.

3. OnDeck

OnDeck offers revolving lines of credit that range between $6,000 and $100,000. They also provide term loans from $5,000 to $250,000. Repayment terms are 12 months for the former and up to 18 months for the latter. 

The cost of funding with OnDeck is a minimum APR of 35.1% for term loans and 31% for lines of credit. These quoted minimums are what their customers with good existing track records would qualify for, so if you are a new business expect your APR to be higher.  

To qualify for OnDeck financing, you’ll need to:

  • Have been trading for a minimum of one year
  • Show business annual revenue of $100,000
  • Have a personal credit score of 600
  • Have a business bank account

Financing deals with OnDeck get cheaper for repeat borrowers. 

Additional Kentucky Small Business Financial Resources

The following are some additional state-sponsored credit facilities and grants, relevant to small business owners in Kentucky: 

Paycheck Protection Program (PPP)

As a government instituted program, the PPP makes it possible for small business owners to access funds for up to 8 weeks to help with their running costs. These costs may include payrolls, rent and any debts owed to the company’s creditors. Repayments may be forgivable.

Economic Injury Disaster Loans (EIDL)

Because of the COVID-19 pandemic, an EIDL can now be directly accessed via the SBA Disaster Assistance Program. These loans are granted to small business owners to cushion the economic effects of the pandemic. They help small business owners pay salaries and allowances to their employees and pay off existing debts.

EIDLs can’t be used for the expansion, modernization, or re-stocking of a business. The loan has a low interest rate and is limited to $2M. Repayments can be forgivable.

Other Resources for Kentucky Small Businesses

The following institutions might be of assistance to your business:

The Kentucky Small Business Development Center (SBDC)    

The Kentucky SBDC doesn’t administer loans, grants, or investment capital. However, they can help you identify sources and increase the quality of your loan applications and proposals for funding.


SCORE is an all-volunteer organization that provides free education and mentorship to help you start, grow, and succeed in business.

How to Prepare for a Kentucky Small Business Loan

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

  • Business bank account - You should already have a business bank account. Should you be approaching a different bank for a loan, have your existing bank statements readily available.
  • Credit score - Check and improve it if you can.
  • Business registration - Make sure that your papers and licenses are in order.
  • Business plan - Have your business plan in hand.
  • Business revenues - The higher your revenues, the better for the consideration of your application.

The Bottom Line

This article has served as a comprehensive guide on Kentucky small business loans and grants—where and how to get them—including the top banks, online lenders, and loan types. Many resources—which include banks, government initiatives, and online lenders—exist out there, and we hope you now have the information you need to head out confidently on the path to financial freedom and small business success.