There are many reasons why a company might apply for a business loan: start-up funds, cash flow shortages, equipment purchases, acquisitions, or marketing. A loan is a perfectly good solution for any of these needs. However, when you access business loans for expansion they can yield the most impactful results. Instead of using credit to cover costs or fill in cash flow gaps, you can use it as an active investment in the growth of your business.

Types of Business Expansion Loans in Ohio

There are several different types of business expansion loans. The one you choose depends on your needs and qualifications. Here are four of the most popular types:

SBA Loans

These loans are backed by the U.S. Small Business Administration (SBA) and are among the most sought-after financial products in the country. Since they are backed by the SBA, which offers partial guarantees on them, they offset some of the risk taken by financial institutions that provide them giving support to banks, and making it easier for small businesses to access the financing they need. These loans are available for amounts up to a maximum of $25 million, at a maximum interest rate of prime rate + 4.75%. It usually takes about three weeks to access funds in this way.

Business Term Loans

A business term loan involves a lump sum borrowed for a specific period at a fixed interest rate. These loans are typically used for large, one-off expenses, new equipment, or commercial real estate. When taking a loan of this kind, you must be sure that you will be able to pay it off within the period prescribed, 12 months for inventory or staff expenses or up to 20 years for real estate.

Equipment Loans

The acquisition of new equipment is often a key factor in a business’s expansion. Equipment financing enables a company to finance the cost of new machinery. The loans can cover any portion of the total cost of acquisition, all the way up to 100%, depending on the amount and the business’s credit history and other qualifying factors. The loan term is usually determined by the life expectancy of the equipment in question, and the interest rate varies widely, between 6% and 10%.

Commercial Real Estate Loans

Loans are also available to finance the purchase of larger business premises, or the renovation and extension of existing properties. Commercial real estate loans cover these costs with respect to office buildings, retail or shopping centers, apartment buildings, hotels, restaurants, or industrial buildings. They usually require a down payment of 20-30%, and repayment terms range from 3 to 20 years in duration.

Should I Get a Loan to Finance my Ohio Business Expansion?

If you are convinced that the time has come to take a bold step to expand your business, and you are able to fulfill the requirements, a business expansion loan from Consumers National Bank might be just what you need. First, make sure that your business can sustain the expansion you are about to undertake, and have a solid plan in place to repay your loan and make it work for you.  

How To Qualify For Business Loans in Ohio

When you apply for a small business loan, first research your needs and ensure that you are applying for the right kind of loan. Do you need equipment financing, a business term loan, or perhaps a revolving line of credit? One of our Commercial Lenders can help you determine the type of loan that fits your needs. Once you have decided, check our application requirements and make sure you have all the necessary documentation. Feel free to contact us and ask for more information if you need it.

Consumers National Bank is an SBA-award-winning bank that provides small business loan services in Ohio. For information on how to get business loans for expansion, contact us today. We will be happy to take you through the process and help you determine your eligibility for the business financing you require.