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Mississippi Small Business Loans: What Are My Options As a Small Business Owner?

More than 250,000 small businesses were in operation in Mississippi in the 2018 fiscal year. The state has seen steady economic growth over the last few years, with an annual growth rate of 2.7%. However, this rate of growth remains slower than the U.S. average of 3.4%.

At a glance Mississippi has a flourishing economy, with a diverse buying market. The state hosts some attractive business loan options and grant schemes. More than $524.6 million in loans (valued at under $100,000) was issued in Mississippi in 2016 alone. The following guide looks at some of the best loan options currently available for small businesses in Mississippi. 

Best Options for Mississippi Small Business Loans, According to a Recent Analysis

Revolving Loan Fund Program

Business owners in Mississippi who have been struggling to receive financial aid or loans from  traditional banking schemes can turn to the Economic Adjustment Assistance Revolving Loan Fund Program's Dependency. 

This program has a combined investment of $560 million and has to date delivered more than 500 RLFs to businesses across the U.S. and in Mississippi as well. 

Features of the loan program are as follows:

  • 15-year fixed interest rate
  • Largest amount of $180,000 to $200,000 
  • EDA loans are small and can only cover 33% of your total business expenses when starting 
  • Larger loans of $800,000 up to $1,400,000 are available

Mississippi Minority Business Enterprise 

Mississippi strives to retain its diverse economy and minority-owned businesses. As such, the state has introduced the MS Minority Business Enterprise, which assists a wide range of businesses from various industries in Mississippi. 

The MS Minority Business Enterprise platform offers both educational and mentorship tools: 

  • $250,000 for minority-owned businesses, including women
  • Larger loans are available at a 15-year fixed interest rate
  • Funds can be used for fixed assets, inventory, or staff

This platform has grown to become a popular source of information, training, and financial aid for many small businesses in central Mississippi. There are extra incentives available to small business owners who comply with local guidelines. 

The Rural Business Enterprise Grant Program or RBEG

RBEG is a subdivision of the U.S. Department of Agriculture. Its aim is to assist small businesses in rural and remote areas. RBEG has a solid standing reputation for helping thousands of businesses across Mississippi. Here are some features of the program:

  • There’s no maximum grant amount - the grant amount you are eligible for will vary according to your risk factor and the type of business you're looking to open. 
  • People can apply from any rural area.
  • Loans aren't limited to larger towns, state agencies, nonprofits, etc.
  • RBEG allocates, on average, $500,000 for rural small businesses with a fixed 15-year interest rate. 
  • Funds are directed to businesses that find themselves in areas with less than 50,000 residents.
  • Incentives and extra grants are available for businesses in more populated areas.

U.S. Small Business Administration 504 Loans 

The SBA 504 loans are some of the most trusted loans available for small businesses across America. With affordable interest rates and a focus on assisting small businesses in debt, liquidity, or simply with startup capital, 504 loans are an initiative that has helped thousands of small businesses expand in smaller and slow-growing states such as Mississippi.

Key features of the 504 loan include:

  • 504 loans have a maximum loan amount of $5,000,000. 
  • Eligibility to apply is based on:
  • Owning and operating a for-profit U.S. business
  • The business has a net worth of less than $15 million
  • Applicants should have a net income of less than $1 million after federal tax

  • The loan can not be used for:
  • Repaying debt, paying for working capital, or investment in rental real estate. These might limit some business owners, but the 504 loan scheme is still a reliable option.

Small Business Loan Guaranty Program or SBLGP 

This program is another federal government initiative aimed to help businesses under the 2010 Small Business Jobs Act. Mississippi received $13,168,350 from this program (of the $1.5 billion federal capital) to get small businesses off the ground and operational. 

The Loan Guaranty Program made available in Mississippi provides the following eligibility criteria for small businesses: 

  • Employ less than 250 full-time employees and make fewer than $7,000,000 gross revenue or $1,000,000 in profit after taxes 
  • Minimum loan amount of $50,000
  • Maximum loan amount of $500,000
  • Maturity rate of 15 years
  • Interest rates negotiated between Mississippi-approved financial institutions and the small business. 

Additionally, the loan program clearly specifies  how business owners are allowed to spend their money. Yet, in most cases, applicants can receive a loan guaranty of 50% for working capital and 80% for credit and finance fixed assets.

Summary Table

Loan Provider 

Pros 

Cons

Revolving Loan Fund Program

  • Large scale lA great available 
  • Federally and state-supported
  • A fixed payback term of 15 years can accumulate to larger repayment amounts for smaller businesses 

Mississippi Minority Business Enterprise

  • Great incentives
  • Funds can be used for inventory or paying staff
  • More formal loan providers and can sometimes charge higher interest rates
  • There are only a select few target industries that funds are available to

RBEG

  • No maximum grant requirements
  • A great option for startup owners
  • Only available to more rurally located small businesses 

SBA 504 Loans

  • Trustworthy
  • Federally supported.
  • The maximum amount is $5 million
  • Limitations on profits and net income to remain compliant 

SBLGP

  • Great for small to medium-sized businesses 
  • No minimum amount
  • A maturity rate of 15 years can have lasting effects on small business owners 

Top Online Mississippi Small Business Loan Options

Although the loans, mentioned above, are widely available for many Mississippi-based businesses, there are several online loan options that are worth looking into. 

In this section, we outline the top online Mississippi small business loan options: 

1. Kabbage 

For a flexible, secure, and tech-savvy experience, Kabbage is a strong contender. Kabbage has a quick and reliable application process, while providing clients with the flexibility to remain in charge of their lending process. 

Because Kabbage is such a tech-driven company, most of the application processing takes place online and the platform allows you to track and monitor due payments and more. 

2. FundBox

With zero origination fees, prepayment penalties, and next-day fund transfers, Fundbox has rapidly become a popular loan scheme platform for many small business owners. The platform allows you to choose from either a 24-week or 52-week repayment option, with easy automatic payments. 

Getting a one-time loan - set on your approved limit - is now easier than ever, especially if you're a small business that needs cash at crucial times in the financial year. 

3. OnDeck 

With more than $13 billion in loans provided to small businesses, OnDeck is a digital financial platform that makes it easier and faster to receive approval and initial loan payouts. The platform provides loans from as little as $5,000 up to $250,000, with a repayment term of 18 months. 

Clients can decide how they wish to make their payments - either on a daily or weekly basis. These small and short-term loans provided by OnDeck allow small businesses the opportunity to move to a new location, invest in new employees and staff training, or conduct renovations. 

Other Resources for Mississippi Small Businesses

There are additional resources small businesses in Mississippi can make use of to help them in areas that are not necessary all about finances. For example, your business may want to learn more about how to retain well-trained staff and how to network with business owners in their local area.

Mississippi Small Business Development Center 

The Mississippi Small Business Development Center is an accredited member of America’s Small Business Development Center, aiding businesses in need of assistance in the state of Mississippi. 

The development center has assisted small businesses affected by natural disasters, pandemics, and similar issues. In 2019 alone, the development center managed to start 207 new small businesses and created an additional 709 new jobs. 

These efforts accumulated nearly $77 million in capital formation and contributed $14 million to new sales growth for the state.  

How to Prepare for a Mississippi Small Business Loan

So you're ready to apply for a small business loan. After reviewing all your options, you've decided to go with a scheme that best fits your financial needs, and one that will allow your business to grow and expand without costing too much in monthly repayments. 

Here's how you can prepare for a Mississippi small business loan:

1. Create a Business Plan 

Banks and other financial institutions want to see your idea on paper, well-detailed and clearly explained. 

Sell your business idea in the best way possible by including financial budgets, service and product offerings, business's financial statement, and by explaining how you will allocate the funds you receive in the development phases of your business.  

Your business plan is one of the most crucial aspects of your loan application, as it allows those who are willing to give you money to understand why and how you’ll be operating your new business. 

2. Know Your Loan 

Know what type of loan you're applying for and why. Read the fine print of each loan option. This will help ensure you're aware of the ins and outs of each loan plan. You should be able to repay your loan, without struggling financially.

3. Check Your Credit Score 

Check the credit score of your business. Laws vary across states, regarding the credit score you need for a certain loan. The credit score you require will also vary according to the financial institute you plan on loaning from.   

4. Have Options 

Make sure to have more than one option. Look for loan plans that give you peace of mind and offer the best repayment options.  

Mississippi Business Loans: The Bottom Line 

With a variety of loan options available, business owners will need to decide on a loan plan that works best for their business. Taking out a loan can be daunting, but knowing how much you need to borrow and how much you can afford to pay back can make it a whole lot easier. 

This guide has provided you with a starting point, now it is up to you to continue your research and apply for the most suitable loan, which will help get your business in Mississippi up and running.