How to Get a Quality Small Business Loan in Vermont

Top 5 Vermont Small Business Loan Options

Community National Bank

Community National Bank in Derby, Vermont, is regarded as the highest-ranked Small Business Administration (SBA) lender in Vermont. Community National Bank offers a number of loans for businesses, including small businesses. These business loans include equipment, commercial real estate, construction, and commercial term loans. Other loans provided include paycheck protection programs and credit lines. 

Community National has an average loan in Vermont of over $135,000 with an average interest rate of 5.05%. They offer a total of 48 loans in Vermont, though not all of these directly relate to small businesses. Community National Bank determines the clauses, rates, amounts, and overall details of each loan on a case-by-case basis. Typically their transactions are done in person by bringing your personal financial statements, tax returns, corporate tax returns, and a profit and loss statement with a balance sheet.

Union Bank

Union Bank in Morrisville, Vermont, is another one of the most highly rated lenders for small businesses active in Vermont. Unlike Community National, Union Bank offers two types of specialized loans specifically for small businesses. These loans include SBA loans designed to help you start, purchase, or expand a small business. 

The other type of small business loan they offer is Economic Development Loans that are designed to improve the quality of neighborhoods. These loans are typically available for businesses that are having a positive impact on the quality of their communities. Union Bank offers loans under $60,000 with an average interest rate of 5.45%.

People's United Bank

People’s United Bank in Bridgeport, Connecticut, also operates in Vermont. People’s United has been providing capital for small business owners since 1953. They offer a variety of loan options to small business owners through the SBA. Their most common model is the 7(a) loan program, the standard loan available through the SBA. 

People’s United also offers a special 7(a) loan for businesses with special requirements, such as those impacted by NAFTA. Their microloan program provides small, short-term loans, while the CDC/504 Loan Program offers small businesses an avenue for business financing. People’s United typically offers loans under $60,000 with a 8.25% interest rate.

North Country FCU

North Country FCU in South Burlington, Vermont, offers the standard SBA loan programs such as the 7(a) program. Unlike some other options, North Country FCU doesn’t offer additional programs specifically tailored to meet the needs of small businesses. 

They do, however, offer loan programs that apply to businesses of all sizes such as equipment loans, business vehicle loans, and commercial mortgages. The average loan for North Country FCU is over $60,000 and has an average interest rate of 5.41%.

United Midwest Savings Bank

United Midwest Savings Bank in De Graff, Ohio, is another out-of-state lender that offers loans and small business services in Vermont. Much like North Country, United Midwest Savings doesn’t offer a variety of unique loans for small businesses beyond standard SBA loans. 

They do, however, offer a service in which they can offer you a loan of up to $150,000 for your small business. This service extends to lenders, getting you in contact with lenders who can provide you with over $150,000 in small business loans. Additionally, the average loan available with United Midwest Savings Bank is over $900,000 with an average interest rate of 5.75%.

Summary Table

Top Online Vermont Small Business Loan Options

While choosing a loan available locally can help build a strong network for your small business, there are other options. Some lenders offer the ability to acquire loans on a national scale over the internet. 

These online loan options make the business of lending easier to manage. Simply apply for the loan online, wait for it to be accepted and, in the meantime, continue working on your business. A number of these sites are readily available nationwide including Smartbiz, Fundera, and Kabbage. 

1. Smartbiz

Smartbiz is the leading online banking network, with loans anywhere from $30,000 to $350,000 and interest rates at 7.12% and lower. Their repayment terms can last anywhere from 10 to 25 years, giving you ample time to repay your debt. For example, if you wished to take out a loan of $175,000 it would take, on average, 10 years with a 6% interest rate at a little under $2,000 per month.

2. Fundera

Fundera offers a variety of loans ranging from $5,000 to $500,000 with interest rates beginning at 6%. You can also borrow up to five million dollars in certain cases with loan terms of up to 25 years. Fundera also provides its borrowers with access to a wealth of knowledge, making the lending process significantly smoother.

3. Kabbage

Kabbage, with its dedicated business branch, allows you to receive up to $250,000 with a line of credit. Kabbage also provides loan management through their K Servicing program. While not currently offering loans or capital to small businesses, Kabbage will notify interested users of any changes.

Additional Vermont Small Business Financial Resources

Even if you don’t meet the small business loan requirements for Vermont, there are additional resources. Vermont has small business grants and other assorted potential sources of funding. 

Vermont Employment Growth Incentive

The Vermont Employment Growth Incentive, for example, provides a cash payment based on revenue return generated to the state. Businesses must be authorized to receive this grant by the state. To be authorized, businesses must apply to the Vermont Economic Progress Council, which determines if it and its project meet its requirements.

Vermont Training Program

The Vermont Training Program is a grant provided for training employees and prospective employees. VTP grants may cover up to 50% of the training cost and can be used for large-scale training projects.

Northern Border Regional Commission

The Northern Border Regional Commission provides additional grants for community and economic development projects. Municipalities, public entities, and not-for-profit entities are eligible applicants.

Economic Development Program

Windham County has an Economic Development Program that promotes business startups in the area. The initial promised funding from the program is finished, but some businesses may still prove eligible for funding.

State Trade Expansion Program

The State Trade Expansion Program provides funding to businesses looking to expand internationally. The program will reimburse businesses that expand internationally through trade shows, trade missions, market research, and export education. 

Other Resources for Vermont Small Businesses

The SBA offers a variety of options beyond financial assistance for small businesses. These include counseling such as SCORE, the Vermont Small Business Development Center, the Vermont Women Business Center, and the Vermont Export Assistance Center.

SCORE

SCORE is a volunteer-run organization dedicated to providing free mentoring to help start or grow your business. They operate in a variety of areas including Vermont and the Clinton, Essex, and Franklin counties in New York.

Vermont Small Business Development Center

The Vermont Small Business Development Center has provided no-cost professional expertise and guidance to business owners since 1992. While not necessarily financial aid, the VTSBDC will provide you with a variety of services to give you the best possible chance of success.

Vermont Women Business Center 

For women looking to start out on their own path in life, the Vermont Women Business Center provides assistance. Also called the Center for Women & Enterprise, the nonprofit organization’s goal is to empower women and provide them with all the tools to succeed. The CWE offers consultations, workshops, and networking opportunities.

Vermont Export Assistance Center

The Vermont Export Assistance Center is part of the U.S. Commercial Service Agency. Regulated by the International Trade Administration, the VTEAC will provide you with a variety of information for expanding internationally.

Small Business Debt Relief Program

The state of Vermont offers a Small Business Debt Relief Program that allows small businesses to gain immediate relief from non-disaster SBA loans. It specifically provides loans such as 7(a), 504, and microloans if the business meets size standards. 

Beyond the size standards, there are more obvious requirements, including a U.S. basis, ability to repay, and a sound business purpose. The purpose of these loans is to forgive debts for businesses that have gotten off the ground, and it was created to assist in COVID relief.

How to Prepare for a Vermont Small Business Loan

Preparing for a loan can be intimidating, but there’s a number of steps that you can take to ensure you have the best possible chance of landing a loan:   

• Improve your credit score
• Write a business model
• Register your business
• Check your eligibility
• Improve eligibility where needed and possible
• Prepare a business plan to ensure your best chance of success

The Bottom Line

Vermont’s small business loans are varied, so choosing the best option for your small business is key. If you find that the local lenders don’t provide the right incentive, then try looking at the top online loan providers outlined in this article. Always look for the best possible loaning terms, such as a high average loan with a low average interest rate.