Whether your business is struggling or about to scale, there are a number of funding paths that you can take. One way to do this is to secure funding through business loans.
These loans allow you to use borrowed capital to pay for expenses or to invest in business projects. However, lenders have different requirements and expectations, and you should work with ones that are the most worthwhile for you. In fact, you may actually find that some states are better than others when it comes to securing business loans.
In addition to the standard SBA loans and grants around the country, New York State also has tons of alternative lenders, ranging from Chambers of Commerce to private financing agencies. The array of options available allows you to connect with those who are looking to support your specific industry and offer generous credit amounts.
Several funding incentives in the state are specific to certain business sectors: The Job Development Authority (JDA) Direct Loan Program gives out loans to manufacturing and real estate projects; the Flexible Technical Assistance (FlexTech) Program offers to share in the costs for businesses that develop clean energy or energy efficient tech.
Average approval rate: 19%
Those who’ve gone down the route of forming an LLC in New Jersey have enjoyed the benefits of the eighth-largest economy in the country—and this is on top of the generous community and state support available. Business owners in the state are eligible for financial support and incentives from the New Jersey government, such as the Premier Lender Program. It’s a partnership between the New Jersey Economic Development Authority and 25 reputable banks, providing low-cost funding for brands that are at least two years old.
One notable funding model in New Jersey is their peer-to-peer lending. Strong community involvement in the state’s economic development encourages individual investors to give out small sums as personal loans.
Average approval rate: 19%
Small businesses in California are guaranteed business loans via the Small Business Loan Guarantee Program (SBFC). The SBFC, in partnership with finance companies, can lend up to $20 million. However, since lenders may prefer to loan out money to well-established companies, there are also a few other options for small business owners.
For one, you can look into the Jump Start Loan Program which lets you borrow up to $10,000 to launch your business. Area-specific programs are also available in the state, like Southern California’s Accion Rapid Loan (for the Riverside, San Diego, Imperial, and San Bernardino counties).
Average approval rate: 14.2%
The state has about 1.2 million small businesses, with more popping up daily. Thanks to the Community Reinvestment Act, Illinois entrepreneurs can take out business loans easily and more conveniently. This act encourages people to launch their own business, contributing to the state economy. In 2017 alone, there were 218,934 approved loans issued by the state.
There are several government-supported loans and financing programs that you can avail of. Additionally, Illinois offers financial incentives, alternative funding programs with partner institutions, and innovative incubator programs too.
Average approval rate: 15%
With the state’s major industries (telecommunications, manufacturing, health care services, and construction) being some of the most lucrative, it’s no wonder that the state’s GSP ranks sixth in the country. The Pennsylvania government is also proactive in giving aid to businesses, as seen in the timely Rapid Response Services, which helped ensure business continuity, especially in the midst of the coronavirus crisis.
There are also several growth opportunities thanks to government initiatives, like the Pennsylvania Industrial Development Authority (PIDA), which offers loan credits to businesses that create full-time employment. PIDA-eligible businesses include those within the agricultural, research and development, retail, and tech industries, on top of the state’s major industries.
Average approval rate: 12.9%
Before approaching a lender, it’s important that you have a strategic and solid plan on where the money is going to increase your chances of approval.