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Best Ohio Small Business Loans

Whether you are looking for the lowest rates possible, most favorable terms and conditions, or simply wish to obtain funding from a lender closely embedded within the local community, Ohio has a broad range of resources available at your fingertips.

Written by Tetiana Sitiugina-Babiuk - Independent writer and content strategist, updated on 9/10/2021

At a glance According to the 2020 Small Business Profile, there are over 965,000 small businesses in Ohio, employing over 2.2 million workers. This accounts for 99.6% of all companies within the state. Out of these, 15.52% of small companies receive a loan, with the average size for a Small Business Administration (SBA) loan being $164,053.

Top 3 Ohio Small Business Loan Options  

Whether you are looking for additional funding to expand your small business, purchase equipment, or consolidate debt, a plethora of Ohio small business loan providers can help you achieve these goals. Below, you will find the top three private sources to consider when trying to obtain a loan for your company.

1. Economic and Community Development Institute

The Economic and Community Development Institute (ECDI) is a non-profit organization serving underbanked and underserved small businesses within the Cleveland, Columbus, Cincinnati, Akron, Canton, and Toledo areas.

The ECDI offers loan amounts as high as $350,000 with terms of up to five years. The application fee is $25, and you can expect to pay an additional 5% of the loan amount in closing fees. In addition, to qualify for the loan, you will be required to participate in specialized financial training. 

Some of the common products offered by the ECDI include:

  • Small Business Solutions Loans. The Small Business Solutions Loan is a microloan offered by ECDI that can provide up to $2,500 with a twelve-month repayment term. This option comes with a fixed APR of 7% and is available to entrepreneurs who are members of the Women’s Business Center.
  • SBA loans. ECBI is also one of the top intermediaries for SBA funding, targeting business owners with low to moderate income and entrepreneurs who have had difficulty obtaining financing from traditional financial institutions. A minimum credit score of 590 is necessary to access SBA loans.

2. Fifth Third Bank

Fifth Third Bank offers lines of credit and small business loans for Ohio-based companies. Financing typically comes as SBA funding and is applicable for real estate purchase, working capital, and equipment financing, among others.

These loans provide flexible amounts and repayment options, meaning you can tailor the funding to your needs. You can choose a fixed or variable interest rate, and terms can extend to 25 years, depending on the loan’s purpose.

If you’re purchasing property, you can take advantage of down payments as low as 10%. You may also choose to finance the closing costs.

To qualify for these loans, you must meet the following criteria:

  • You operate a for-profit business within the United States.
  • Your company has a tangible net worth below $15 million.
  • The two-year average net income after taxes isn’t over $5 million.

3. Huntington National Bank

Huntington National Bank has repeatedly ranked as the best SBA lender in Ohio. It provides the following types of SBA loans:

  • 7(s) SBA loans. 7(a) loans are suitable for acquiring, opening, or expanding a small business
  • SBA Express loans. SBA Express loans offer an expedited review process if you need to access the funds sooner.
  • 504 SBA loans. These loans can be used to pay for the equipment needed to modernize or expand a small business

In addition to SBA financing, Huntington also offers the following types of loans:

  • Business term loans for small businesses owners who wish to purchase or upgrade machinery and equipment.
  • Real estate funding to help small business owners buy, refinance, or build owner-occupied real estate.
  • Dental and veterinary financing to help entrepreneurs start or acquire a practice, purchase equipment, or expand office space. These loans can also pay for construction expenses.
  • Business lines of credit. These credit lines can be accessed either online or by phone. Fixed and variable interest rates plus flexible repayment options can help you tailor the loan to your company’s needs.
  • Lift Local Business program. In addition, Huntington National Bank offers the Lift Local Business program, which provides access to capital at a lower cost. This initiative supports entrepreneurs who are women, veterans, or ethnically and racially diverse.

Summary of Top 3 Ohio Small Business Loan Providers

Provider

Loan Amounts

Terms

Rates

Notes

Economic and Community Development Institute

Up to $350,000 / Microloans up to $2,500

Maximum 5 years or 12 months for microloans

7% fixed APR for microloans

$25 application fee, 5% closing fee

Fifth Third Bank

Depends on the loan - some over $10,000,000

Up to 25 years

Fixed and variable

Option of financing closing costs

Huntington National Bank

$1,000 to $150,000 for Lift Local Business program

Flexible

Fixed and variable rate, average 6.1% for SBA loans

Lift Local Business program supports entrepreneurs who are veterans, women, or minorities.

Top Online Ohio Small Business Loan Options 

In addition to local loan sources, online lenders offer nationally-available financing. Below, you will find three top companies that provide these convenient online services.

1. Fora Financial - Best for Merchant Cash Advances

Fora Financial presents yet another online lender alternative offering merchant cash advances and short-term small business loans. The company is known for its fast turn-around times: you can expect to receive the approval within 24 hours and see the funds in your account within the first 72 hours.

Requirements for Fora Financial loans include:

  • No currently open or unsettled bankruptcies
  • Minimum of six months in operation
  • Minimum earning of $12,000 per year
  • Personal credits score of 500

Both short-term loans and cash advances can range from $5,000 to $500,000, presenting a great option for business development and for growing your infrastructure.

2. Fundbox - Best for Lines of Credit

Fundbox presents another financial services platform offering invoice factoring and short-term lines of credit. To qualify for these financing options, your business needs:

  • A history of at least three months in operation
  • An annual turnover of no less than $25,000
  • A credit score above 500

The application process is straightforward, and you can expect to receive the disbursed funds relatively quickly. Loan amounts typically range from $1,000 to $100,000, with repayment terms between 12 and 24 weeks.

Fundbox loans don’t require collateral or a personal guarantee. They also have no fees other than interest. Repayment occurs through weekly automatic debits, and there are no monthly minimums.

3. BlueVine - Best for Invoice Factoring

BlueVine is an online fintech company that offers short-term lines of credit and invoice factoring, with each type of financing having different small business loan requirements for Ohio entrepreneurs.

Application Requirements for Invoice Factoring

Small business owners in Ohio are eligible for invoice factoring of $20,000 to $500,000 if invoices are less than 12 weeks outstanding and the company:

  • Has annual revenue of at least $100,000
  • Uses a B2B (business-to-business) model
  • Has been in operation for at least three months

Application Requirements for Short-Term Lines of Credit

Short-term credit lines ranging from $5,100 to $250,000 are available to companies that use a B2B (business-to-business) or B2C (business-to-consumer) model. The venture must also:

  • Have an annual income of $120,000 or more
  • Be in business for at least six months
  • Have a credit rating of no less than 600

Additional Ohio Small Business Financial Resources

Private lenders aren’t the only possible sources of Ohio small business loans. As a matter of fact, several government programs have been established within the state with the goal of supporting local entrepreneurs. As such, below you can find additional important resources worth keeping in mind when researching how to get a small business loan in Ohio.

1. Collateral Enhancement Program

If you lack the collateral necessary to obtain a loan, this solution may be for you. The Collateral Enhancement Program (CEP) was established by the Ohio Development Services Agency to facilitate increased lending to small and minority-owned businesses that require additional capital for growth and expansion. 

CEP works to enable financing that would have been unavailable otherwise due to a collateral shortfall. Specifically, it provides cash deposit accounts to lending institutions in order to supplement collateral required for individual small business loans.

2. GrowNOW

The Ohio government understands that small business are a crucial part of the state’s economy. As such, it has established the GrowNOW program intended to support small business financing.

With the program, entrepreneurs can receive a reduction of 3% on the interest rate of a new or existing business loan. The maximum loan value is $400,000, and the discount lasts two years, with the possibility of renewal. For each $50,000 borrowed, the company must maintain one full-time or two part-time employees in Ohio.

3. Ohio Minority Business Direct Loan Program

Minority entrepreneurs can obtain financing for fixed asset purchases or improvements through the Ohio Minority Business Direct Loan Program. The available funding amounts range from $45,000 to $450,000, representing 40% of the investment’s total cost. The additional 50% comes from a bank and the remaining 10% - from the owner equity.

Interest rates are currently fixed at 3% on the portion that the program funds and the repayment terms can be as long as 15 years.

Other Resources for Ohio Small Businesses

Without a doubt, Ohio small business loans are crucial for the growth and expansion of many young companies. However, there are other types of resources available in the state that can provide much-needed assistance for your small business venture.

1. Ohio Business Gateway

The Ohio Business Gateway is a government-run website that offers links to resources to help you start, finance, and grow your Ohio company. The site also facilitates enterprise management by allowing online tax submission.

2. Procurement Technical Assistance Centers

The Procurement Technical Assistance Centers (PTACs) in Ohio are a service of the Office of Government Contracting (GC), which belongs to the U.S. Small Business Administration. Their mission is to ensure that small companies, especially those owned by a woman or disadvantaged person, receive the highest possible participation in government contracts and subcontracts.

3. SCORE

SCORE is a nonprofit that helps small ventures through mentorship and education. It also offers access to administrative templates and tools. This organization may also be able to provide valuable information regarding Ohio small business grants.

4. Small Business Development Centers

The Ohio Small Business Development Centers (SBDC) offer assistance and counseling to citizens who wish to start or improve their venture. Certified business advisors (CBAs) within the SBDC provide training and advice to help entrepreneurs develop plans, identify capital sources, and conduct market research.

How to Apply for a Small Business Loan in Ohio

To ensure that you receive an affordable loan, you must take a few specific actions. They include registering your company, drawing up a business plan, and building your credit.

1. Register Your Business

Opening a legal business in the state of Ohio requires several steps. They include:

2. Write a Business Plan

A business plan enables a lender to understand how your enterprise functions. This document needs to contain the following:

  • An introduction that includes your mission and vision
  • Your goals and how your company makes money
  • Proof of the length of time you’ve been in business
  • Financial statements and evidence of annual income
  • Information on suppliers and stakeholders
  • Your credit rating
  • Evidence that you can provide collateral
  • Data showing your company’s achievements, including previous loan repayments 

3. Build Your Credit 

Before applying for a loan, make sure to find out your credit score. Luckily, you can easily check both your business and personal credit ratings online for free.

Once you have your credit information, verify whether it meets the standards of the lenders you’re looking at. Often, you’ll pay higher interest rates if your credit score is low, so it might be worth spending some time to build your credit up:

  • If you find mistakes in your credit report, ask the credit bureau to correct them
  • Pay off any overdue accounts
  • Pay your bills on time, including credit card, cell phone, medical, and other bills
  • Keep your credit balances low compared to the credit limit
  • Avoid closing credit accounts, as this may negatively impact your credit score

Final Words

If you are looking for an Ohio small business loan, you are in luck: within the state, multiple private lenders - from traditional banks to online services - offer a broad range of financial products to meet your needs. In addition, several government programs exist to help entrepreneurs obtain the necessary financing.

To qualify for the best possible loan and prepare for your application, make sure to register your company, create a thorough business plan, and clean up your credit. Then, carefully study the variety of products offered by the lenders and their corresponding documentation requirements. This way, you will be able to find the local or online financing option that will suit your needs well and help to move your business forward.