April 15, 2022
How to Get a Small Business Loan in North Dakota
The leading industries in North Dakota include real estate, construction, retail trade, professional, scientific, and technical services, and health care.
If you own a small business in the Peace Garden State or have plans to start one, you might be wondering how to cover your expenses. Fortunately, small business loans in North Dakota can help. In this blog post, we’ll review these loan options and how you can qualify.
Why Take Out a Small Business Loan in North Dakota
There are numerous reasons you may want to take out small business loans in North Dakota. Because they’re flexible, you can use them to cover a wide array of business expenses, including:- Commercial property
- Equipment
- Inventory
- Marketing
- Insurance
- Rent, payroll, and utilities
- Refinancing
- Expansion costs
Types of Small Business Loans in North Dakota
When you explore small business loans in North Dakota, you’ll come across several options. The type of business you have and your unique goals will determine the right loan programs for your situation. Note that some loans are easier to qualify for than others.SBA Loans
SBA loans are backed by the U.S. Small Business Administration (SBA), meaning the organization will guarantee a portion of the funds you borrow. You may lock in a competitive interest rate and extended terms if you have good credit and sufficient annual revenue. SBA loan amounts usually go up to $5 million with terms of up to 24 years.Term Loans
Term loans are available at banks, credit unions, online lenders, and other financial institutions. You receive a lump sum of money upfront and pay it back through monthly payments, plus interest and fees. Terms can range from a few months to a few years or even longer. While term loans come with rigorous requirements, you may be able to land a low rate and favorable terms.
Lines of Credit
Lines of credit are more flexible than term loans. With a line of credit, you can draw funds up to a set credit limit, which is dependent on your credit score. In most cases, lines of credit offer lower rates and higher amounts than business credit cards. If you’re unsure how much cash you require to run your business, a line of credit can be a good fit.Microloans
Microloans may be worthwhile if you’re a startup or newer business and need $50,000 or less in working capital. The SBA and nonprofit lenders typically offer these loans. In addition to funding, microloan lenders often provide mentorship, networking, and other resources for entrepreneurs.Equipment Loans
Equipment loans can help you purchase new or used equipment. For example, if you own a flower shop, you can use an equipment loan to pay for pots, knives, and anything else you need to operate. Depending on the lender, you can finance anywhere between 80% and 100% of the equipment. If you default on your loan, the lender has the right to seize your equipment.Commercial Real Estate Loans
A commercial real estate loan is worthwhile if you want to finance a commercial property like a hotel, restaurant, office space, or warehouse. They can provide you with the hundreds of thousands of dollars you may need to cover this high expense. A commercial real estate loan is essentially a commercial mortgage.Business Credit Cards
Business credit cards can help you finance everyday purchases like rent, utilities, and office supplies. Consider cards with low annual fees and perks like 0% introductory offers, signup bonuses, cash back, or travel miles when you explore your options. Business credit cards can help you avoid cash flow shortages.Resources for North Dakota Based Small Business Owners
If you own a small business in North Dakota, the following resources can help you out.- ND Small Business Development Centers (SBDC): The ND SBDC offers business advising and training to North Dakota residents who wish to start or grow their small businesses. The website features a live chat feature that you can use to get fast answers to your business-related questions.
- Evolve Grand Forks: Evolve Grand Forks is a co-working space that promotes entrepreneurship in the Grand Forks area. As a member, you can benefit from 24/7 access, shared workspaces, reservable conference rooms, complimentary coffee, and other perks.
- InnovateND: InnovateND is a voucher and grant program for entrepreneurs in North Dakota. Funding is available on a first-come, first-served basis.
- Grand Forks SCORE: Grand Forks SCORE provides remote mentoring sessions and free or low-cost workshops. The site also contains useful templates and tools.