Small Business Loan Options in South Dakota
Small business owners from Sioux Falls to Pierre to Rapid City are the lifeblood of the state of South Dakota. They employ more than half of state employees, leaving tens of thousands of people and their families dependent on small businesses!
But entrepreneurship is not easy. One of the main reasons small businesses fail is that they often don’t have enough money to survive, especially when economic markets are turbulent. Fortunately, there is a solution: small business loans.
How a Small Business Loan Can Help Your South Dakota Business
Business owners can use small business loans for a variety of purposes, from working capital to buying real estate.
If your business is struggling to pay bills during a slow period, a loan can help. If you have the opportunity to buy a competing business, small business financing can provide the capital you need to take even more market share.
You can use a loan to hire employees, invest in marketing, buy equipment or buy property.
Types of small business loans to choose from
Let’s take a look at some of your business loan options, then explore which lenders can help.
Although they have the most difficult criteria to qualify, bank loans have the most advantageous advantages in the form of low interest rates. If you have good credit, that’s a good place to start.
Loans guaranteed by the US Small Business Administration also offer low interest rates and long repayment periods. There are several SBA loan programs, including the 7(a), 504, and microloan program. Learn more at SBA.gov.
Commercial real estate loans
Commercial real estate loans are available if you are looking to purchase land or a building for your business. The property you buy serves as collateral for the loan, which can help you get a lower rate.
If you don’t qualify for an SBA or bank loan and you send invoices to your customers, you might consider invoice financing, which allows you to get an advance on unpaid invoices. Generally, you don’t need to have a high credit score to qualify, and some bill finance companies won’t even review your credit. It’s a great option for startups that don’t qualify for bank loans.
Small Business Loan Options for South Dakota
Small business loans come in all shapes and sizes, and you can find lenders at banks, credit unions, and online.
What it takes to get approved for a small business loan
When it comes to getting loan approval, borrowers will need to meet certain criteria, depending on the lender’s requirements. For bank and SBA loans, you must have an existing business that has been in operation for two or more years. You may also need to have excellent personal and business credit for these options.
Other options, such as those offered by online lenders or invoice financing, may have less stringent requirements to qualify. So don’t worry! Whatever your credit situation, there is a loan for you!
How to choose the right loan for your South Dakota small business
So which of the business financing options we discussed is right for you? It depends on your specific needs. Ideally, you would have one with a low interest rate and a long repayment period.
Also consider how much you need to borrow, as some lenders have minimums or maximums for how much you can borrow.
Small Business Grant Options for South Dakota
Entrepreneurs also have the opportunity to apply for grants from nonprofits, local, state, and federal governments, and businesses. These grants do not have to be repaid and can provide capital that you can use for your business.
Here are some grant options to explore:
Additional Resources for South Dakota Small Businesses
There are also many business resources in South Dakota that can provide technical assistance, mentorship, and networking opportunities.
Expand your business in South Dakota
Now that you know more about your small business financing options, which one will you choose for your business in South Dakota? Finding the right loan for your needs is important, so spend some time reviewing the options we offer (as well as any others you find) and select the one that’s right for you!
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