Colorado relies on small business owners in Denver, Boulder, and all points in between, but sometimes these business owners need a little help with working capital. They may need help between bills or to take advantage of a growth opportunity. Here’s what you need to know about small business loans in Colorado.
And you? What would a cash injection do for your business?
How a Small Business Loan Can Help in Colorado
There are a variety of ways a working capital loan can help Colorado businesses like yours. A loan can help cover day-to-day business needs, such as printer cartridges or payroll. Or a larger commercial real estate loan could get you the bigger retail space your business needs to serve more customers.
A business loan can also be useful during slow times, especially if your business is one of many based on tourism.
Options for Small Business Loans in Colorado
Now that we’ve talked about all the ways loans can help you, let’s look at some financing options to consider.
COVID-19 Pandemic Loans
Although the darkest days are behind us, the coronavirus pandemic has hit many Colorado businesses hard. The federal government as well as Colorado government agencies like the Colorado Office of Economic Development and International Trade have provided loan and grant programs to help businesses get back on their feet.
CLIMBER Loan Fund (Colorado Loans to Increase Mainstreet Business Economic Recovery) is an example of a local option: it will provide up to $250 million in working capital loans to small businesses in Colorado impacted by COVID-19 through 2023.
Bank loans
Colorado banks and credit unions offer a variety of small business loans for businesses with excellent credit. These may have low interest rates and favorable terms.
SBA Loans
Another option for low interest loans comes from the US Small Business Administration. There are loans to spur economic development in underserved areas, while others, like SBA Express and 7(a) loans, can be used for purposes such as working capital and purchasing property. commercial real estate.
Lines of credit
Loans provide you with a large sum of money at once, but lines of credit give you access to funds that you can withdraw when needed. This may be better suited to your financial needs.
Credit card
Another option to consider is a credit card. You or your employees can use business credit cards to buy what your business needs. Look for a card with 0% APR for the first year, as well as a rewards card that lets you earn points that you can use for travel or cash back.
Short term loan
Although these offer higher rates and shorter repayment terms, short-term loans are useful if you don’t qualify for the previously mentioned options, perhaps because your credit scores are low.
How to Qualify for a Small Business Loan in Colorado
Although each lender may have slightly different requirements for borrowers, most will consider your creditworthiness when reviewing your eligibility.
SBA or bank loans may have higher credit requirements than short-term loans or credit cards. Some lenders will look at your business credit, so if you haven’t learned how to establish business credit, this could be a good starting point before applying.
How to Apply for a Small Business Loan in Colorado
Speaking of application, let’s talk about this loan application. If you’re applying to an online lender, you may only need to provide a few quick details about your business, income, and personal contact information. You will also be asked how much you want to borrow and what you want to use the loan funds for.
How to apply for an SBA loan in Colorado?
If you are applying for an SBA loan in Colorado, be aware that the SBA does not lend directly to businesses. Instead, you’ll need to go through a bank that offers SBA loans. It is also important to note that SBA loans are available for existing businesses. If you have a new business, you will need to consider other financing options. You can view more information about qualifications at SBA.gov.
In addition to the information listed in the last section, you may also be asked to provide financial documents illustrating your company’s cash flow, and possibly a business plan. If you don’t have a business plan yet, there are business resources statewide, like the Colorado Small Business Development Center, which can help you create one for free.
What is a good credit score for a small business loan?
Like I said: lenders will more than likely look at your credit scores when deciding whether or not to lend you. The type of loan you get will determine the type of scores you need.
With regard to company scores, SBA uses FICO’s SBSS score. You should have a score of 140 or higher for an SBA loan and around 160 or higher for a bank loan.
Colorado Small Business Loans: Where Will You Take Your Business?
As you can see, small business loans have many advantages. Taking out a loan could be what sets your business apart from all the competition. How could you take your business to the next level?
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