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Colorado relies on small business owners in Denver, Boulder, and all the places in between, but sometimes those business owners need a little help with working capital. They may need help between bills or to take advantage of a growth opportunity. Here is what you need to know about small business loans in Colorado.

What do you think? What would a cash injection do for your business?

How a Small Business Loan Can Help in Colorado

There are a variety of ways that a working capital loan can help Colorado businesses like yours. A loan can help cover everyday business needs like 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 help during slow times, especially if your business is one of the many tourism-based businesses.

Options for Small Business Loans in Colorado

Now that we’ve covered all of the ways loans can help, let’s take a look at a few financing options you can consider.

COVID-19 pandemic loans

While the darkest days are behind us, the coronavirus pandemic has hit many businesses in Colorado 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.

The CLIMBER loan fund (Colorado Loans to Augmente 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 affected 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 can 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 boost economic development in underserved areas, while others, such as SBA Express and 7 (a) loans, can be used for purposes such as working capital and purchasing property. commercial real estate.

Credit lines

Loans give you a lot of money all 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 purchase what your business needs. Look for a card with 0% APR for the first year, as well as a rewards card that allows you to earn points that you can use for travel or for cash back.

Short term loan

Although they offer higher rates and shorter repayment terms, short term loans are useful if you do not qualify for the previously mentioned options, perhaps because your credit scores are low.

How To Qualify For A Small Business Loan In Colorado

While each lender may have slightly different borrower requirements, most will consider your creditworthiness when considering eligibility.

Loans from the SBA or banks may have higher credit requirements than short term loans or credit cards. Some lenders will review your business credit, so if you haven’t learned how to establish business credit, this might be a good place to start before you apply.

How to Apply for a Small Business Loan in Colorado

Speaking of application, let’s talk about this loan application. If you are applying to a lender online, you may just need to provide a few quick details about your business, its income, and your personal contact details. You will also be asked how much you want to borrow and what you want to use the loan funds for.

How Do I 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 will have 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 see more information about the qualifications at SBA.gov.

In addition to the information listed in the last section, you may also be asked to provide financial documents illustrating the cash flow of your business, and possibly a business plan. If you don’t have a business plan yet, there are business resources available statewide, such as the Colorado Small Business Development Center, which can help you create one at no cost.

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.

When it comes to trade scores, the 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 offer many benefits. 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?

This article was originally written on July 8, 2021.

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