Oklahoma is known as a business-friendly state, featuring a diverse economy, strong workforce, and low tax burden. However, many small business owners require financing to compete and fuel growth in The Sooner State.
Navigating business loans in Oklahoma requires knowing the various types, as each business loan serves a different purpose. Choosing the best small business loan for your needs is essential. In addition, you must ensure the repayment structure is conducive to your cash flow to avoid loan pitfalls and ensure success.
This guide explores what you should know about Oklahoma business loans, including the available options, pros and cons, and the application process. Specifically, we’ll answer these questions and more:
Sooners can access various business loan program options to fund their operations.
Working Capital Loans: Working capital loans in Oklahoma 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 Oklahoma 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 Oklahoma 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 OK small business owner. An SBA loan in Oklahoma 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 Oklahoma 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 Oklahoma 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 Oklahoma 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 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 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 Oklahoma 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 Oklahoma 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.
Oklahoma aims to support small business growth and development through several specialized financing options. The state government often partners with community and private sector lenders to facilitate small business funding.
REI Business Lending is a Certified Development Company (CDC) that offers tailored solutions for small businesses in Oklahoma. They focus on business financing for real estate and equipment needs. Their programs help businesses secure funding quickly. This can be essential for operations that require immediate capital.
REI provides flexible terms and competitive rates. It understands local businesses’ unique challenges and aims to support growth through specialized lending products.
LiftFund is another crucial player in Oklahoma’s small business financing landscape. This organization provides loans to small businesses that might struggle to access traditional banking services. They focus on underserved communities.
LiftFund offers various lending options, including microloans and larger business loans. Its mission is to empower entrepreneurs with the capital they need to succeed. The organization also provides educational resources to help manage business finances effectively.
TEDC Creative Capital assists Oklahoma businesses with diverse financing needs. It offers a range of lending programs tailored to different sectors. Their comprehensive lending programs aim to boost economic growth across the state, with a focus on supporting job creation and community development.
TEDC also partners with the state to offer direct lending programs and the SSBCI Oklahoma Business Lending Partnership Program (OBLP). This program helps businesses access capital through innovative financing solutions.
OCAST, or the Oklahoma Center for the Advancement of Science and Technology, supports small businesses through its SSBCI Technical Assistance Partnership. This initiative helps businesses navigate their financing needs more efficiently.
OCAST provides resources that enhance business operations and growth strategies. This assistance includes guidance on securing funding and improving business plans.
The Community Action Agency of Oklahoma City runs a Small Business Loan Assistance program. This program aims to help local entrepreneurs access necessary capital. It targets low-income individuals who want to start or grow a business.
The agency offers support in various areas, such as inventory and equipment financing. It works closely with applicants to ensure they effectively meet their financing needs.
| 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 |
Oklahoma has a diverse economy and offers many small business opportunities. It ranks high for its low cost of living and friendly business climate, which makes it easier for entrepreneurs to start and grow their businesses here.
The state’s economy relies heavily on several key industries. These sectors drive growth and create jobs. Understanding these industries can help business owners identify potential markets for their products or services.
Here are some of the most prominent industries in Oklahoma.
Oklahoma is known for its oil and natural gas production. The state has vast reserves and significant infrastructure for energy extraction. Renewable energy sources, such as wind power, are also growing rapidly.
Agriculture plays a vital role in Oklahoma’s economy. The state produces wheat, cattle, and poultry, among other goods. Farmers benefit from the rich soil and favorable climate for growing crops.
This industry is a significant contributor to Oklahoma’s economy. The state has a strong aircraft manufacturing and maintenance presence, and companies like Boeing and Lockheed Martin operate there.
Healthcare services are essential in Oklahoma. Hospitals, clinics, and research facilities provide jobs and support local economies. The state’s growing population increases demand for healthcare professionals.
Manufacturing is another important sector in Oklahoma. It includes food processing, machinery, and electronics production. This industry helps diversify the economy and provides stable employment.
Tourism contributes significantly to Oklahoma’s economy. Attractions like national parks, museums, and cultural events draw visitors nationwide. Local businesses benefit from increased foot traffic.
Oklahoma small business loans offer a range of benefits for entrepreneurs looking to grow their businesses. One significant advantage is the diverse loan and lender options available, allowing business owners to find the best fit for their specific needs.
Competitive interest rates make these loans an attractive financing option, helping businesses save money in the long run. Access to needed capital for various business needs is crucial for growth and expansion, and Oklahoma business loans provide that financial support.
Additionally, taking out a business loan can help establish and build business credit, opening up opportunities for future financing. Obtaining a small business loan in Oklahoma can also lead to potential networking opportunities with lenders and other businesses in the area, providing valuable connections for growth and success.
Oklahoma small business loans come with several disadvantages that business owners should be aware of before taking on this type of financing. One major drawback is the risk of taking on business debt, which can strain the company’s financial health.
Depending on your lender, these loans may come with high interest rates and hidden fees, making them potentially costly in the long run. Collateral requirements can also be a downside, as they put business assets at risk if the loan cannot be repaid. Personal guarantee requirements add another layer of risk, putting personal assets on the line in case of default.
Defaulting on a small business loan can lead to credit damage and increased debt, making it harder for the business to secure financing in the future. The potential for high payments can strain cash flow, making it difficult for the company to meet its financial obligations.
The application’s required paperwork depends on your chosen Oklahoma 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 Oklahoma 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 Oklahoma 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.
Oklahoma business owners have several lender options when seeking business financing.
Traditional lenders include banks and credit unions. They often provide low interest rates for business loans. However, they have strict eligibility requirements. Most banks require excellent credit scores and want businesses to be established for several years. High annual revenue and collateral are often needed, too.
Large national banks operate differently than local lenders. National banks might offer more loan options but can be less personal. Local banks and credit unions know their communities better. They may consider local factors when making lending decisions.
Alternative lenders have become popular in Oklahoma because they offer easier capital access. They often have less strict qualifications than traditional lenders and provide convenient and easy online applications. Online lenders typically deliver quick loan decisions, sometimes on the same day you apply.
Interest rates from alternative lenders tend to be higher. However, many Oklahoma business owners find this worth it. The speed of funding can help them seize opportunities quickly, and the ease of access allows them to focus on growing their businesses instead of worrying about long application processes.
Small Business Loan Marketplaces are changing the game for Oklahoma entrepreneurs. These online platforms let business owners apply to multiple lenders at once with a single application, which saves time and significantly reduces stress.
Once approved, businesses typically receive various funding offers. They can choose the best deal that fits their needs. Some marketplaces even offer a concierge service. This connects business owners with loan experts who guide them through the entire process.
Community Development Financial Institutions (CDFIs) are essential in Oklahoma’s lending landscape. CDFIs focus on helping underserved communities and small businesses. They often provide loans that traditional lenders may not consider.
These institutions work closely with local businesses. They understand the unique challenges these businesses face. CDFIs may offer lower interest rates and flexible repayment terms than other lenders.
Oklahoma supports small business growth and development. The state provides several assistance programs to help entrepreneurs succeed. These programs aim to boost local economies and create jobs.
The Oklahoma Business Hub is a crucial resource from the state government. This hub offers various assistance programs for small businesses. Entrepreneurs can find information about grants, loans, and tax incentives. The hub also connects businesses with local resources, helping them navigate the process of starting or expanding their operations.
Oklahoma Small Business Development Centers (SBDCs) are essential in supporting small businesses. They provide free consulting services to entrepreneurs and offer guidance on business planning, marketing strategies, and financial management.
SBDCs also conduct workshops to enhance skills in areas like accounting and digital marketing. These centers help small business owners understand SBA standards and how to meet them.
SBA offices in Oklahoma provide valuable services to small businesses. They offer education through workshops and webinars, covering topics ranging from how to apply for a small business loan assistance program to managing cash flow effectively.
The SBA also provides resources for obtaining federal contracts. Their support helps businesses grow while meeting government requirements.
Local assistance programs further enhance support for small businesses in Oklahoma. SCORE Oklahoma City is one such program offering mentoring services. Volunteers with extensive business experience guide entrepreneurs through challenges. They help with specific issues like financing and marketing strategies.
Local Chambers of Commerce also play a vital role in supporting small businesses. They provide networking opportunities and promote local commerce. Membership often includes access to resources like training sessions and advocacy efforts.
Oklahoma offers various small business grants to entrepreneurs. These grants support new businesses and existing companies and provide funding for different purposes, including startup costs and expansion.
Here are some notable programs:
Oklahoma offers various tax credits to help support small businesses. These credits can reduce a business’s tax liability and encourage growth and job creation.
Here is a list of some key tax credits available for businesses in Oklahoma.
A low credit score limits financing options, but credit-challenged Oklahoma 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 OK 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 Oklahoma can provide the necessary capital to drive growth and development, helping entrepreneurs ensure success. Small business owners have several options, from specialized financing to government grants.
Understanding the landscape helps you make informed choices that can boost your bottom line. Weigh the pros and cons carefully to find what works for you. Your business deserves the best chance to thrive in Oklahoma’s vibrant economy.
Contact us if you’re ready to start your Oklahoma business loan journey! Our alternative financing experts can help you find the best business funding options to fuel growth in The Sooner State.
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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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