Nebraska offers a business-friendly environment that’s primed for growth. Despite having a smaller population (38th) and GDP (35th), The Cornhusker state features a low cost of doing business and various growing industries that attract entrepreneurs.
Many Nebraska small business owners require financing help to tap into that growth potential. Fortunately, the state offers many business funding options, including traditional lenders, alternative lenders, and state-backed funding initiatives. It’s crucial to understand how Nebraska business loans work to select the best option for your needs and cash flow.
This guide explores what you should know about business loans in Nebraska, including the available options, pros and cons, and the application process. Specifically, we’ll answer these questions and more:
Nebraskans can access various business loan program options to fund their operations.
Working Capital Loans: Working capital loans in Nebraska 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 most other types of business loans, making them a popular choice for small businesses needing quick funding.
Business Line of Credit: A business line of credit in Nebraska is a flexible financing option that allows small businesses to access funds as needed. Instead of a lump sum payment, funds for a small 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 Nebraska 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 program 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 conventional loans, making them an attractive option for an NM small business owner. An SBA loan in Nebraska can be used for various purposes, including working capital and equipment purchases. SBA 504 loan programs fund commercial real estate and other major fixed assets.
Invoice Factoring: Invoice factoring in Nebraska 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 Nebraska 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 Nebraska are a type of financing in which a business borrows a lump sum and repays it with interest over a set period, with a fixed interest rate and consistent monthly 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 property purchases, 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 Nebraska 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 Nebraska 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.
Nebraska provides various specialized financing programs to help small businesses succeed. These programs help entrepreneurs secure the capital they need to grow their businesses. They focus on different aspects of financing, ensuring that all types of companies can find support.
In response to the economic impacts of the COVID-19 pandemic, the American Rescue Plan Act (ARPA) of 2021 amended the Small Business Jobs Act (SBJA) of 2010, allocating $10 billion to support the State Small Business Credit Initiative (SSBCI). Administered by the Department of the Treasury, SSBCI aims to enhance state programs that facilitate private financing for small businesses.
Nebraska SSBCI offers two subprograms:
The Nebraska Department of Economic Development offers several financing programs. These programs target various business needs, from startup costs to expansion efforts. They aim to stimulate economic growth within the state. Businesses can access loans, grants, and technical assistance through these services.
The Nebraska Enterprise Fund focuses on providing financial assistance to small businesses. It mainly serves sole proprietorships and partnerships.
The fund offers loans and technical support for entrepreneurs struggling to obtain traditional financing. This initiative is crucial for promoting entrepreneurship in underserved areas.
The GROW Nebraska Foundation aims to boost local businesses through various initiatives. It provides resources for marketing, education, and networking and aims to enhance business skills among entrepreneurs by offering training sessions and workshops.
The Center for Rural Affairs focuses on rural communities in Nebraska. It provides financial opportunities specifically tailored for rural businesses.
Services include loan programs and grants that cater to unique local needs. The center also offers guidance on disaster recovery strategies, helping businesses navigate challenging times.
| 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 |
Nebraska has a strong economy with many small businesses. The state is known for its diverse industries, which help create jobs and support local communities. Small businesses thrive here due to the supportive environment and access to resources.
Here are some of the most prominent industries in Nebraska include:
Agriculture is the backbone of Nebraska’s economy. The state produces corn, soybeans, and cattle. In 2020, agriculture contributed over $23 billion to the economy. Many families have farmed for generations, and this industry provides thousands of jobs.
Manufacturing plays a significant role in Nebraska’s economy. It includes food processing, machinery, and electronics. In 2021, manufacturing employed over 100,000 people in the state. Companies like Cargill and Valmont Industries are major players in this sector.
Nebraska’s location makes it a key hub for transportation. Major highways and railroads cross the state, and this industry supports shipping goods across the country. In 2019, transportation and logistics generated about $4 billion in revenue.
Healthcare is one of the fastest-growing industries in Nebraska. Hospitals, clinics, and nursing homes provide essential services. Due to an aging population, the demand for healthcare workers continues to rise, creating many job opportunities.
The finance and insurance sector is vital for Nebraska’s economy. It includes banks, investment firms, and insurance companies. Major cities like Omaha host several national financial institutions. In 2020, this industry contributed over $6 billion to the state’s GDP.
Information technology is growing rapidly in Nebraska. Tech companies focus on software development, cybersecurity, and data management. Startups are emerging in cities like Lincoln and Omaha. This sector attracts young professionals looking for innovative careers.
Nebraska offers many benefits for small business loans. Accessing capital is crucial for growth. With these loans, businesses can invest in new equipment, hire staff, or expand their operations. This financial support helps companies thrive in a competitive market.
Nebraska offers diverse loan options. Entrepreneurs can choose from traditional bank loans, Small Business Administration (SBA) loans, and microloans. Each type serves different needs, so businesses can find the right fit for their specific goals and requirements.
Business loans in Nebraska often provide competitive rates. Lower interest rates mean lower monthly payments. These savings allow businesses to allocate funds like marketing or product development elsewhere.
Building business credit is another advantage. Timely loan repayments improve a company’s credit score, which opens doors for future financing opportunities and shows suppliers and customers that the business is reliable.
Networking opportunities arise through local lenders and organizations. Many banks offer workshops and events for entrepreneurs. These gatherings help business owners connect with mentors and peers. Networking can lead to partnerships, referrals, and new customers.
Business loans in Nebraska have several drawbacks. The cost of debt is a significant concern for many borrowers. Interest rates can vary widely depending on the lender and the borrower’s credit profile. High interest rates can lead to paying back much more than initially borrowed, straining a business’s finances, especially for small businesses operating on tight budgets.
Stringent qualifications at traditional lenders also pose challenges. Many banks require excellent credit scores and extensive documentation, which can exclude many small business owners from accessing necessary funds. Those who do not meet these strict criteria may have to seek alternative financing options, which might not always be favorable.
Collateral requirements add another layer of risk. Lenders often ask for business assets as collateral against the loan. If a business fails to repay the loan, it risks losing vital equipment or property. This loss can severely impact operations and growth potential.
Some lenders also require personal guarantees from business owners. This means that if the business defaults, personal assets are at risk.
Late payments and defaults can significantly damage business credit. A poor credit score makes it harder to secure future financing. This cycle can trap businesses in a difficult position, limiting their ability to grow or adapt to market changes.
The loan application process and required paperwork depend on your chosen Nebraska 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 additional information required for all Nebraska business loans:
SBA Loan options require additional documents and information, such as business tax returns and a business plan. Visit our SBA Loan page for further information and 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 Nebraska 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 loan 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 loan 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.
Nebraska business loans have several lender options for small business loans.
Traditional lenders like banks and credit unions usually offer low interest rates. However, qualifying for a loan can be quite challenging. They typically require excellent credit scores, several years of operation, high annual revenue, and consistent cash flow. Collateral is also often necessary.
Large national banks have more extensive credit facilities but focus more on commercial enterprises than small businesses, which can lead to a lack of personal touch. In contrast, local lenders like regional banks and credit unions understand the local market better and can offer more flexible options for small business lending.
Alternative lenders have changed the landscape of small business financing in Nebraska. They provide convenient online applications that make it easy to apply for loans. Many business owners find that these lenders have much more accessible qualifications than traditional ones. Quick approvals and fast funding times are common.
However, alternative lenders typically charge higher interest rates. Despite this, many business owners believe the increased accessibility and speed of funding are worth the extra cost. For them, getting funds quickly can mean the difference between success and failure.
Small Business Loan Marketplaces (like UCS) have been game changers for Nebraska entrepreneurs. These platforms allow business owners to apply to a network of lenders using a single, simple online application. This saves time and reduces stress during the loan process.
Approved businesses often receive multiple funding offers. They can choose the best option based on their needs and cash flow. Some marketplaces even use a concierge approach. This connects applicants with loan specialists who guide them through the process and help select the best funding offer.
Community Development Financial Institutions (CDFIs) are essential in Nebraska’s lending landscape. CDFIs focus on providing loans to underserved communities and small businesses. They aim to boost local economies by offering financial services where traditional banks may not.
CDFIs often have more relaxed qualification criteria than traditional lenders. This makes them an excellent choice for new or struggling businesses looking for support. By helping small businesses thrive, CDFIs aim to create sustainable growth in local areas.
Nebraska offers several government and nonprofit assistance programs for small businesses. These programs help entrepreneurs access funding, training, and resources. They aim to support business growth and job creation throughout the state.
The Nebraska Department of Economic Development provides various resources for small businesses. They offer grants, loans, and technical assistance. Programs like the Small Business Jobs Act help create jobs in local communities. This department also connects businesses to funding opportunities that fit their needs.
Community Development Resources (CDR) are vital in assisting small businesses in Nebraska. CDR provides financial assistance through loans and grants. They focus on rural areas where access to capital can be limited. Their services include helping businesses develop plans to secure funding.
Grow Nebraska supports small businesses with marketing and development resources. They provide training sessions and workshops on various business topics. Entrepreneurs can learn about e-commerce, social media, and more. This organization helps small businesses grow by enhancing their market presence.
Invest Nebraska focuses on supporting startups and emerging companies. It offers investment funds and advisory services. Its goal is to foster innovation and entrepreneurship within the state. By providing mentorship, it helps businesses navigate challenges and reach their potential.
The Nebraska Business Development Center (NBDC) offers consulting services for small businesses. It provides guidance on business planning, financing, and management strategies. NBDC also assists with grant writing and finding funding sources. Its expertise helps entrepreneurs make informed decisions.
SourceLink Nebraska connects small businesses with local resources. They provide an online platform that lists support services available in the state. Entrepreneurs can find information on funding, mentoring, and networking opportunities. This resource helps small business owners easily access valuable tools.
SourceLink Nebraska connects small businesses with local resources. They provide an online platform that lists support services available in the state. Entrepreneurs can find information on funding, mentoring, and networking opportunities. This resource helps small business owners easily access valuable tools.
Nebraska offers various business grants to support small businesses and help entrepreneurs grow and succeed. Several programs exist, each with specific goals and eligibility criteria.
Here is a list of some small business grants available in Nebraska:
Nebraska offers several tax credits to help small businesses thrive. These credits can reduce taxes and provide financial relief. Understanding these options is crucial for business owners.
Here’s a list of small business tax credits available in Nebraska:
A low credit score limits financing options, but credit-challenged Nebraska small business owners can obtain financing 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 and lender 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 NE 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.
Business loans in Nebraska can help take your enterprise to the next level, but taking on debt poses some risk. Identifying the business loan and lender that meets your needs with a repayment structure conducive to your cash flow is essential.
Consider shopping various lenders to get multiple offers for business funding. This puts you in the driver’s seat when selecting the best deal for your Nebraska small business.
Contact us if you’re ready to start your Nebraska small business loan journey. Our alternative financing experts can help you find the best funding options in The Cornhusker 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.
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