ohio

Complete Guide to Ohio Small Business Loans

Are you wondering how to get a small business loan in Ohio? This subject can be complex, so you’ll need to do as much research as possible. We’ve created the following guide to help you understand where to look for financing and how to prepare yourself to get the best loan possible.

At a glance The number of small businesses in Ohio is growing steadily. According to the 2020 Small Business Profile, there are over 965,000 in the state, accounting for 99.6% of all Ohio companies. Over 2.2 million employees work in these establishments.Data from the past decade shows an average Small Business Administration (SBA) loan of $164,053 for Ohio. With 15.52% of small companies receiving a loan, Ohio ranks as the third best state to get a business loan.

Top 3 Ohio Small Business Loan Options  

Here, we’ll show the top five private sources of Ohio small business loans. You’ll find a short description of each lender, followed by a table that summarizes amounts, rates, and other pertinent information.

1. Economic and Community Development Institute

The Economic and Community Development Institute (ECDI) is an excellent source of Ohio small business loans. This organization serves 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 5% of the loan amount in closing fees. To qualify, you’ll need to participate in financial training. 

The Small Business Solutions Loan is a microloan from ECDI that can provide up to $2,500 with a twelve-month repayment term. There’s a fixed APR of 7% for this solution, which is available to entrepreneurs who are members of the Women’s Business Center.

ECBI is one of the top intermediaries for SBA funding and targets 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 Ohio small business loans and lines of credit. 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.
  • The company has a tangible net worth below $15 million.
  • 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(a) for acquiring, opening, or expanding a small business
  • SBA Express, offering an expedited review process
  • 504, which can pay for the equipment needed to modernize or expand a small business

In addition to SBA financing, Huntington also offers business term loans. Funding is also available for real estate purchases and dental and veterinary practices.

You can access a business line of credit online or by phone. Fixed and variable interest rates plus flexible repayment options help you tailor the loan to your company’s needs.

Dental and veterinary financing can help entrepreneurs start or acquire a practice, purchase equipment, or expand office space. These loans can also pay for construction expenses.

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.

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 financing that’s available nationally. We’ve selected three of the top companies that provide these services.

1. BlueVine

BlueVine offers short-term lines of credit and invoice factoring. Each type has different small business loan requirements. Ohio entrepreneurs 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

Short-term credit lines ranging from $5,100 to $250,000 are available to companies that use a B2B 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

2. Fundbox

Fundbox offers 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 the lender disburses funds 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. SmartBiz

This online lender offers SBA loans. SmartBiz has competitive rates and extended repayment terms and allows small businesses to compare financing options and determine which is the best fit.

Requirements for SmartBiz loans include:

  • No previous defaults on federal loans
  • Business owner who is a U.S citizen or permanent resident
  • Proof of income to repay the amount borrowed
  • Minimum of two years in operation (three years for real estate loans)
  • Personal credit score of 650 (675 for real estate)

Loan amounts range from $500 to $5 million for commercial real estate. For working capital or debt refinancing, borrowers can obtain between $30,000 and $350,000.

Additional Ohio Small Business Financial Resources

Private lenders aren’t the only possible sources of Ohio small business loans. Several government programs exist to support local entrepreneurs.

Collateral Enhancement Program

If you lack the collateral necessary to obtain a loan, this solution may be for you. The Collateral Enhancement Program (CEP) offers cash deposit accounts that provide the required capital for small businesses to get financing.

GrowNOW

The state government understands that small businesses are a crucial part of Ohio’s economy. Because of this, the GrowNOW program exists to assist in financing them.

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.

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. Funding amounts range from $45,000 to $450,000, representing 40% of the investment’s total cost. 50% then comes from a bank and 10% from owner equity.

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

Other Resources for Ohio Small Businesses

Government agencies and nonprofits in Ohio provide additional resources to help small businesses. We describe several of them below.

Ohio Business Gateway

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

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.

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 information regarding Ohio small business grants.

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) provide training and advice to help entrepreneurs develop plans, identify capital sources, and conduct market research.

How to Prepare for an Ohio Small Business Loan

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.

Register Your Business

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

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 

Build Your Credit 

Know your credit score before applying for a loan. You can 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.

If you find mistakes in your credit report, you can request that the credit bureau correct them. You may also choose to further build your credit for a time before seeking a loan.

The Bottom Line

Multiple private lenders provide Ohio small business loans; some are traditional banks, while others offer online services. Government programs also exist to help entrepreneurs obtain the necessary funding.

To qualify for the best possible loan, make sure you register your company, have a business plan, and clean up your credit. Then, carefully study what lenders offer. In this way, you can choose the local or online financing option that best suits your needs.