Missouri’s diverse economy creates profitable opportunities for entrepreneurs. However, many small business owners require financing help to stay competitive in the Show-Me State.
Business loans in Missouri can be a game-changer for your enterprise. Various programs are available to fund essential business needs, such as working capital, equipment purchases, hiring staff, expansion projects, business acquisition, etc. Choosing the right loan and lender for your needs and cash flow is crucial to using a small business loan to fuel success.
This guide explores what you should know about Missouri small business loans, including the available options, the benefits and drawbacks, and the application process. Specifically, we’ll answer these questions and more:
Missourians can access various business loan program options to fund their operations.
Working Capital Loans: Working capital loans in Missouri provide financing to cover a business’s day-to-day operational expenses. Typical uses of working capital loan funds include inventory purchases, payroll, rent, and other short-term financial needs. They provide the cash flow to keep operations running smoothly and seize economic opportunities. Working capital loans are typically easier to qualify for than other business loans, making them a popular choice for small businesses needing quick funding.
Business Line of Credit: A business line of credit in Missouri is a flexible financing option that allows small businesses to access funds as needed. Instead of a lump sum payment, funds for a business line of credit are activated as an available credit limit. A revolving line of credit works similarly to a credit card, where you can borrow and repay funds as needed and only pay interest on the amount you use. This type of financing is ideal for covering short-term expenses, managing cash flow fluctuations, or seizing growth opportunities without applying for a new loan each time.
Revenue-Based Financing: Revenue-based financing in Missouri is a form of alternative small business funding where the company’s revenue determines eligibility and amounts. Repayment comes directly from a percentage of future revenue. This type of financing allows businesses to access capital without taking on additional debt, making it an attractive option for companies with fluctuating revenue streams.
SBA Loans: SBA loans provide funding to help businesses start, grow, and succeed. The Small Business Administration (SBA) partially guarantees these loans, providing security for lenders and allowing small businesses better access to capital. These partially guaranteed loans offer favorable terms such as lower interest rates and more extended repayment periods than traditional bank loans, making them an attractive option for an MO small business owner. An SBA loan in Missouri can be used for various purposes, including working capital and equipment purchases. SBA 504 loans fund commercial real estate and other major fixed assets.
Invoice Factoring: Invoice factoring in Missouri is an alternative business funding option in which a business sells its accounts receivable to a third party at a discount. This provides immediate cash flow, allowing the business to cover expenses or invest in growth without waiting for customers to pay their invoices. The factoring company then collects the total amount from the customers directly.
Merchant Cash Advance: A merchant cash advance (MCA) in Missouri is a form of financing where a business receives a lump sum of money upfront in exchange for a percentage of future credit card sales. Small businesses with fluctuating revenue streams or those needing quick access to capital typically use this type of funding. While merchant cash advances can provide fast funding, they often come with high fees and may not be suitable for all businesses.
Business Term Loan: Business term loans in Missouri are a type of financing in which a business borrows a lump sum and repays it with interest over a set period, with fixed interest rates and consistent monthly loan payments. These loans are typically long-term financing, but there are also short-term business loans. Businesses usually use term loan proceeds for significant investments like equipment purchases, paying off existing business debt, commercial real estate, or business expansion projects. The interest rates and terms of business term loans can vary depending on the lender and the borrower’s creditworthiness.
Equipment Financing: Equipment financing in Missouri is a type of small business loan specifically used to purchase equipment and machinery for operations. Equipment loans allow businesses to acquire necessary assets without draining their cash reserves. Typically, the financed equipment serves as collateral for the loan, making it easier for companies to secure funding.
Asset-Based Loans: Asset-based loans (ABL) in Missouri allow small businesses to unlock the value of the assets on their balance sheet to secure funding. ABL lenders have business assets appraised and then issue loan amounts based on the appraisal value. The assets become collateral for the loan, meaning the lender can claim the assets in case of default. Some examples of asset-based business loans include commercial real estate loans, certain construction loans, secured term loans, and accounts receivable financing.
Missouri small business owners can access several state-specific specialized loan programs.
The Missouri Linked Deposit Program supports small business financing. It connects state funds with local lenders. The state reduces the interest rate on loans for eligible businesses. This program targets those who need capital for growth or expansion.
Businesses must meet specific criteria to qualify. They should show they will create or retain jobs in Missouri. Loan amounts can vary but are often substantial enough to make a difference. Many businesses have benefited from this funding strategy.
AtlCap is a Community Development Financial Institution (CDFI) that plays a crucial role in providing small business financing to companies that traditional lenders often overlook. As a CDFI, AtlCap focuses on serving underserved communities and businesses that may not meet the strict criteria set by mainstream financial institutions. By offering flexible financing options and personalized support, AtlCap helps small businesses access the capital they need to grow and thrive.
This targeted approach ensures that even the most marginalized entrepreneurs have the opportunity to succeed and contribute to their local economies. Through its commitment to inclusive lending practices, AtlCap is making a significant impact in supporting the growth and sustainability of small businesses that are often left behind.
Local communities in Missouri also offer unique financing options. Many cities have programs designed to support small businesses. These programs often focus on regional development and job creation.
For example, some cities provide grants or low-interest loans to startups. Others may offer assistance with real estate purchases or renovations. Local chambers of commerce often have information about these opportunities.
Exploring these local resources can lead to valuable loan alternatives. Each community has its own set of rules and requirements, so it’s essential to research thoroughly.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Missouri has a diverse economy. Small businesses play a vital role in this state. They create jobs and support local communities. Many industries thrive here, contributing to the state’s growth.
Here are some of the prominent industries in the Show-Me State:
Manufacturing is a critical industry in Missouri. It produces goods like machinery, electronics, and transportation equipment. In 2020, manufacturing accounted for about 10% of the state’s total employment.
The healthcare industry is one of the largest employers in Missouri. Hospitals, clinics, and research facilities provide essential services. This sector continues to grow due to an aging population and increased healthcare needs.
Agriculture is deeply rooted in Missouri’s history. Farmers grow crops like corn, soybeans, and wheat, and livestock farming plays a significant role. In 2021, Missouri ranked among the top states for agricultural production.
Retail trade is another critical sector in Missouri. Stores and online shops serve local consumers, and this industry provides numerous job opportunities for residents. Retail sales have been increasing steadily over the years.
Transportation and logistics benefit from Missouri’s central location. Major highways and railroads connect the state to other regions, and companies in this sector manage the movement of goods efficiently.
Professional services encompass a range of fields, including legal, accounting, and consulting services. Many businesses rely on these experts for advice and support.
Missouri small business loans offer several advantages to entrepreneurs looking to start or expand their businesses. One key benefit is the access to capital that these loans provide, allowing businesses to invest in equipment, inventory, marketing, and other essential expenses.
Many Missouri business loans offer competitive interest rates and flexible repayment terms, making them a more affordable option for small businesses. These loans can also help businesses establish a credit history and improve their credit score, which can be crucial for future financing needs.
While small business loans offer many benefits, Missouri business owners should be aware of the downsides. Understanding these potential risks can help avoid business loan pitfalls. All business loans carry interest rates that can increase costs and reduce profitability. Business owners with low credit scores may face high interest rates that can strain cash flow.
The application process can be tedious and time-consuming, especially for traditional business loans. Long funding times from banks and credit unions aren’t conducive to urgent financing needs. Many lenders require collateral or a personal guarantee, potentially risking business and personal assets if the company fails to repay the loan. Late payments and defaults can damage credit scores and hurt your business.
The application’s required paperwork depends on your chosen Missouri business loan. Funds can be approved and distributed for most products within three business days.
Here’s how to apply:
The first step is choosing the most sensible solution to the problem at hand. This should require a decent amount of research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term cost? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for all Missouri business loans:
SBA Loan options require additional documents and information, such as a business plan. Visit our SBA Loan page to learn what’s needed for the application.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If and when you’re approved, funds for Business Term Loans, Business Lines of Credit, Working Capital Loans, Equipment Financing, Merchant Cash Advance, Revenue-Based Business Loans, and Accounts Receivable Factoring should then appear in your business bank account in anywhere from 24 hours to one week. For SBA Loans, it usually takes 3-5 weeks (or more in some cases) to receive funding.
Your Missouri business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If your application is declined, you might have applied for the wrong product for your cash flow. In this case, we would likely recommend a different product with a less hazardous repayment structure.
Your application might also be declined after it is determined that you cannot afford to take on more debt. Instead, your needs and financial circumstances might be better suited for another financing tool, like a business credit card or even a personal loan. Both options can be accessed through the UCS site and are usually much more accessible to qualify for than business loans.
If your credit score is preventing you from accessing financing, you should consider credit repair services. We can help you identify the issues that keep your score down and develop practical solutions for eliminating them.
Missourians have several lender options to consider.
Traditional lenders include banks and credit unions. These financial institutions offer conventional loans that typically feature lower interest rates. However, they also have strict qualifications. Most applicants must have excellent credit, several years in operations, high annual revenue, and high-value assets to pledge as collateral.
National banks have larger credit facilities but often lack a personal touch. In addition, most commercial banks focus more on enterprise-level financing than small businesses. Local lenders, such as community banks and credit unions, typically offer more personalized service and better understand the local market.
Gone are the days when Missouri business owners had to rely on banks for financing. Alternative lenders have changed the business funding landscape nationwide. These funding sources, which include online lenders, nonbank lenders, and peer-to-peer lending networks, typically offer quick and easy online applications with minimal documentation. Using fintech tools, these lenders usually provide quick decisions and fast funding once approved.
Most alternative lending sources have more lenient qualifications than banks, making small business loans more accessible for credit-challenged business owners and younger businesses. The tradeoff is that alternative business loans often have higher interest rates and fees. Even so, the increased accessibility, convenience, and funding speed make it worth the extra cost for many Missouri entrepreneurs.
Business loan marketplaces (like UCS) have become game-changers for small businesses in Missouri. Most marketplaces offer quick online applications. You only have to apply once, and your application goes to a network of lenders, saving time and reducing stress. If approved, you’ll typically receive multiple funding offers and can select the best one for your business.
Some marketplaces also use a concierge approach where you can connect with a business loan expert who can guide you through your options. These loan experts get to know your business and can help you choose the option that’s most conducive to your cash flow and will also help you achieve your goals.
Community Development Financial Institutions (CDFIs) play a crucial role in providing financial services to underserved communities in Missouri. These specialized lenders focus on supporting small businesses, affordable housing initiatives, and community development projects that may not qualify for traditional bank loans. By offering flexible terms, technical assistance, and financial education, CDFIs help stimulate economic growth and create opportunities for individuals and communities in need across the state of Missouri.
Missouri features several government assistance programs, as well as nonprofit organizations that offer support.
The Missouri Department of Economic Development (DED) offers various programs and resources to support small businesses in the state. One such program is the Small Business Loan Guarantee Program, which helps small businesses secure financing by providing a partial guarantee to lenders.
The DED also offers technical assistance and training programs to help small businesses improve their operations and increase their competitiveness. Additionally, the department provides access to business development resources, networking opportunities, and assistance with navigating government regulations. Overall, the Missouri DED plays a crucial role in supporting the growth and success of small businesses in the state.
The Small Business Administration (SBA) has several offices in Missouri dedicated to supporting small businesses in the state. These offices provide various services and resources to help entrepreneurs start, grow, and succeed in their ventures. They can also recommend an SBA-preferred lender.
Some ways SBA offices in Missouri support small businesses include offering guidance on business planning, connecting entrepreneurs with financing options, providing training and workshops on various business topics, and assisting with government contracting opportunities.
Additionally, SBA offices in Missouri often collaborate with local organizations and economic development agencies to further support the small business community in the state. Overall, the SBA offices help foster economic development and the growth and success of small businesses in Missouri.
Local agencies in Missouri play a crucial role in supporting small businesses in the state. One such organization is SCORE, a nonprofit association dedicated to helping entrepreneurs start, grow, and succeed in their business ventures. SCORE provides free mentoring, workshops, and resources to small business owners in Missouri, offering valuable guidance and expertise.
Additionally, local chambers of commerce in Missouri are instrumental in supporting small businesses by providing networking opportunities, advocacy, and resources. These chambers serve as a hub for connecting businesses with local government officials and community leaders. By joining a local chamber of commerce, small business owners in Missouri can gain access to valuable support and resources to help their businesses thrive.
Missouri offers various small business grant opportunities for eligible businesses. These grants help support growth and development in the community. They can be particularly useful for startups and existing businesses looking to expand. Here are some of the notable programs available:
Missouri offers several tax credits to support businesses. These credits help reduce the amount of tax a business owes. Many programs require specific documentation and must meet certain criteria. Companies should understand these options to maximize their benefits.
Here is a list of some key business tax credits available in Missouri:
A low credit score limits financing options, but credit-challenged Missouri small business owners can still access needed capital with bad credit business loans. These specialized financing options focus on a business’s cash flow and growth potential more than the personal credit score of the business owner(s), increasing your chances of credit approval.
Several alternative lenders specialize in providing business financing for credit-challenged entrepreneurs. Online lenders offer easy online applications with minimal documentation, quick decisions, and fast funding, which benefits small businesses with urgent capital needs.
However, business loans for bad credit often carry high interest rates and increased fees. In addition, you may receive a lower maximum loan amount, have shorter repayment terms, and require more frequent repayment. These conditions can lead to further financial strain if not properly managed. Ensure you have a plan and budget before agreeing to a bad credit business loan.
A popular strategy for MO business owners is to use a bad credit business loan as short-term financing until their credit improves. With a better credit score, entrepreneurs can potentially access lower-cost, long-term loans and pay off bad credit business loan debt.
Understanding business loans in Missouri is vital for your entrepreneurial journey. You have various options, from traditional loans to specialized financing.
Each type has its pros and cons. Knowing the landscape helps you make informed decisions.
Contact us if you’re ready to start exploring small business loans in Missouri. Our alternative financing experts can help you find the best options for your cash flow and business needs in the Show-Me State.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
UCS will never communicate with a prospective client on Facebook, Facebook Messenger, or any other type of social media. Further, any email communications will always come from an official UCS email address and not a Gmail, Yahoo, or other email domain. If you believe you have been contacted by someone posing as an employee of UCS, please email [email protected].
