Where to Apply for Small Business Loans in Ohio

by Kieran Daly
April 12, 2024
Where to Apply for Small Business Loans in Ohio

When it comes to getting more funds for cash flow or to expand, small business owners in Ohio might turn to a traditional bank. But sometimes, these loans can be difficult to get, with strict eligibility requirements, unfavorable terms, or even high interest rates.

Luckily, there are other organizations to turn to. Keep reading to learn about the available small business loans in Ohio. 

5 Places to Get Small Business Loans in Ohio

Getting a loan from a traditional bank can be time-consuming and often requires loads of paperwork. In many cases, you may need to provide collateral or a personal guarantee and have a good credit score.

But banks and credit unions aren’t the only places you can get a small business loan in Ohio. Here are some other options to consider if you are struggling to get the funding you need from more traditional funding sources.

1. U.S. Small Business Administration

The U.S. Small Business Administration (SBA) offers several small business loans for companies in Ohio that might not otherwise be able to get financing. While the SBA doesn’t make the loan itself, it works with certified development companies (CDCs) and other lending partners to make loans more accessible.

Because these loans are backed by the SBA, they are often offered with competitive loan terms and interest rates. While the exact eligibility requirements depend on the type of loan program, in general you need to be a small for-profit business operating in the U.S., and you’ll need to provide financial statements and a business plan. In some cases, you may need to put up collateral.

There are three main SBA loan programs you can apply for as a small business in Ohio: 

  • SBA 7(a) loan: The 7(a) loan program is the most common loan offered by the SBA. It provides funding of up to $5 million that can be repaid in 10 to 25 years. Borrowers can use the money for equipment purchases, real estate, and refinancing business debt, and working capital.

  • SBA 504 loan: With an SBA 504 loan, you can borrow up to $5.5 million, and the repayment terms are 10, 20, or 25 years. This type of loan can be used to fund commercial real estate projects, buy equipment and machinery, or refinance other debt. You can’t use a 504 loan to pay for inventory or as working capital.

  • SBA microloan: The SBA’s microloan program offers up to $50,000 in loans to startups and nonprofits. These loans are often managed by nonprofit organizations based in the communities they serve, such as Columbus and Dayton, Ohio. While SBA microloans can’t be used for refinancing or real estate, they can be used for working capital, supplies, inventory, equipment, machinery, and furniture.

2. The Economic and Community Development Institute

The Economic and Community Development Institute, or ECDI, offers small business loans for companies in Ohio. The ECDI was founded in Columbus and has offices in Cleveland, Akron, Cincinnati, Toledo, Canton, and Portsmouth.

The ECDI offers several loan programs for small businesses that are headquartered in Ohio. Loans range from $750 to $2 million with a maximum loan term of six years. You can submit an online application, along with a $25 application fee for each applicant — any business owner who owns more than 20% of the company must apply.

Some of the loan programs offered by the ECDI include:

  • CDFI Loan Participation Program: This is a loan of up to $1 million with a term length of no more than 10 years. The funds can be used for working capital, buying inventory, marketing, franchising costs, real estate, refinancing, and more.

  • City of Cleveland Heights Loan Program: Small businesses that are in Cleveland Heights and want to grow their business can apply for a loan with an interest rate starting at 2%.

  • Veteran Loan Program: Veterans in Ohio can get funding to start a business from the ECDI. This program provides low-interest business loans as well as help with navigating SBA programs, online resources, and access to business assistance.

  • Toledo Business Growth Fund: Through this ECDI fund, you can get between $150,000 and $2 million for up to 20 years. Financing is even available for business owners with low credit. 

3. Ohio Department of Development 

Ohio entrepreneurs can also get state-backed loans to expand their businesses through the Ohio Department of Development. Here are some of its funding programs: 

  • Regional 166 Loan Program: Also known as Ohio 166 Loans, these are made with another lender or bank and can be used to finance up to 30% to 40% of commercial real estate projects or equipment purchases. Small businesses can get loans of up to $1 million, with loan terms of up to 20 years for real estate or 10 years for equipment and merchandise. On your loan application, you’ll have to prove that you are creating jobs in Ohio. Another consideration is that this loan isn’t available to retail businesses.

  • Loan Loss Reserve Program: This loan is distributed through eight port authorities located throughout the state. Both for-profit and nonprofit businesses can apply for these loans to use toward all types of energy-saving projects. To apply, you need to prove that your project will save at least 15% of energy use compared to your previous energy usage. You’ll need to pay the loan back in 15 years and provide financial information, including your ability to repay the loan.

  • Ohio Capital Access Program: This program allows small businesses to obtain credit to help them grow. It works by a certain percentage of the loan being held in a reserve fund. Both the borrower and lender participate and contribute to the fund. The Ohio Department of Development also contributes to the fund. You can get a loan of up to $350,000 to finance an asset or $250,000 for a working capital loan. The loan can be used for equipment, real estate, working capital, or refinancing. 

  • Ohio Micro-Loan Program: This program helps small businesses grow with a 0% interest loan of $10,000 to $45,000. Loans must be paid back within five years for working capital or seven years for equipment. To be eligible, your core business needs to be based in Ohio. 

  • Collateral Enhancement Program: With this program, you can get a cash collateral deposit of up to 30% of the loan amount for real estate, working capital, and equipment loans, or up to 50% if you're a minority- or women-owned business. The deposit lasts five years, but the repayment terms can be longer. For real estate loans, the terms are 15 years, while equipment loan terms are seven, and working capital loans are one year.

4. Ohio Treasurer's Office 

The Ohio Treasurer's Office offers the following two programs for businesses:

  • GrowNOW: The GrowNOW program is designed to help Ohio small businesses expand. It offers a 3% interest rate reduction on new or existing loans up to $400,000 for two years. The program can be renewed. For every $50,000 borrowed, businesses have to create or maintain one full-time or two part-time jobs in Ohio. For a business to be eligible, the majority of its employees must be Ohio residents, and the business headquarters must be located in Ohio. 

  • Ag-LINK: For farmers and other agricultural businesses, the Ag-LINK program gives a 3% reduction in interest on new or existing operating loans. The loan must be used for agricultural purposes, and the majority of a business’s operations must be in Ohio. 

5. Online Lenders

Another funding option is to borrow money through an alternative or online lender.

There are many online lenders that serve small business owners in Ohio. Many have more relaxed eligibility requirements than traditional banks, which may make them more suitable if your small business has been struggling to get a loan from a bank due to credit score or other financial requirements.

You can get different types of funding through online lenders, including:

  • Lines of credit: This is a revolving loan that works similarly to a credit card. You can draw funds at any time rather than receiving money as a lump sum.

  • Working capital advances: This is a type of funding that lets quickly cover cash flow gaps to get through a slow season, to stock inventory, or even to invest in equipment.

Get the Financing You Need for Your Ohio Small Business

Small businesses in the Buckeye State have a lot of options to choose from when it comes to getting small business loans. There are a variety of organizations that provide funding programs specifically for small businesses in Ohio. Online lenders are also a viable solution to secure funding. 

If your business needs funding fast, Backd offers a business line of credit of up to $750,000 with competitive terms as well as a working capital advance of up to $2 million.

Apply today and find out if you qualify in just 24 hours.

What would you do with the right amount of capital?

Working Capital Advance

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Business Line of Credit

Get instant access to revolving credit with unlimited terms, and the best rates for your business.

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