Small Business Loans for Indianapolis
Indianapolis, Indiana is not only the largest city within the state, but serves as the state capital.
Nearly 900,000 people live within the city limits, and the greater Indianapolis metro area is home to more than 2 million people, making it one of the largest metro areas in the mid-west region of the US.
Though native peoples have inhabited the area for some 4,000 years, it was only in the early 1800s that Indianapolis was formally founded, specifically to serve as the state capital.
In the 200 or so years since, Indianapolis has become a major economic center for the state and the US as a whole, as well as home to a range of sport, culture, and art attractions.
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These days, Indianapolis’ economy is dominated by several market sectors, including finance, insurance, business and professional services, education and health care, government, manufacturing, and wholesale businesses.
A number of major brands have headquarters or significant presence within the city, including Anthem, Eli Lilly, Steak ‘n Shake, Lids, Simon Property Group, and more.
Though the manufacturing industry has somewhat waned from its mid-1900s glory, as with many mid-western towns, a substantial number of biotech, life science, and technology jobs have been created, while the city has retained important conventional manufacturing leaders as well, such as Rolls-Royce.
It is also home to the second largest FedEx Express hub in the world, at the Indianapolis International Airport.
With such a diverse range of businesses, coupled with numerous cultural, historical, and artistic attractions, a solid network of transportation, great local and national sports teams, cuisine, and a relatively affordable cost of living, Indianapolis is an attractive place for many people to call home.
Likewise, it is increasingly becoming an attractive option or small business owners looking to put down roots and follow their dreams.
Major companies and players in the region undoubtedly don’t face the same kinds of financial struggles that present themselves to newer small businesses.
Despite that, however, there are many resources and options available for small business funding in Indianapolis today, which can provide critical working capital or project-specific funding for small businesses in their first years of operation.
One of the most common forms of this funding is small business loans in Indianapolis. They are far from the only kind of small business financing available, however.
Today, there are several different kinds of small business funding products from which business owners can choose, each with their own pros and cons, different terms, interest rates, and so on.
These include the aforementioned small business loans, but also short-term loans, business lines of credit, debt consolidation loans, merchant cash advances, and more.
The full portfolio of small business funding for Indianapolis businesses, and businesses across the country, make it easier than ever before to put vital capital into the hands of small business owners, so that they can manage and grow their business.
Naturally, not every small business owner is going to be an expert in choosing the right kind of funding for their business.
There are several factors that come into play, including trying to match the term, loan amount, and collateral requirements of a loan or credit product with an expense or project whose details align, and for which a return on investment is expected within the time horizon of the loan or credit product.
For example, short-term loans can be the perfect choice for purchase order financing, where raw materials or products must be purchased, manufactured/imported, sold, and then payment received over the course of 6 months or so.
They would not be well-suited for much longer-term expenses, that won’t bear fruit for several years.
Learning about the differences in these kinds of small business funding is critical to making the best decisions for your small business, and managing to keep your interest and debt expense to a minimum.
To help educate small business owners, we’ve put together this guide. We’ll discuss some of the key aspects of how each of the different small business funding products work, and how they compare and contrast from one another.
We’ll also look at the source of loans and credit products for small businesses in Indianapolis. Once, banks and related traditional lenders were the only choice of lender, but that has all changed within the last decade, and now includes private, non-bank lenders as well.
These are often preferred by many small business owners for a variety of reasons, which we will detail in our guide below.
Finally, we’ll highlight the products available from one particular private lender, who offers small business loans in Indianapolis, as well as every other small business funding product we’re discussing – BizFly Funding.
BizFly Funding is one of the leading small business lenders in the US, and presents some unique advantages for small business owners seeking funding today.
Portfolio of Small Business Financing Options
To start things off, let’s take a closer look at the range or portfolio of small business funding options that are available. Naturally, not every lender will offer all of these options, and not every business will qualify.
In addition, the qualification and other minimum requirements for these products will vary from lender to lender, and especially across lender types (e.g. banks vs. private lenders).
The terms, interest rates, and other details will also vary, based on the lender and the qualifications of any particular small business applicant.
For our purposes, we’re really focusing on the general way in which these diverse small business loans and credit options work and compare to one another, rather than the specific minutiae of these products from any particular lender.
With all of that said, it’s vital that small business owners seeking business funding in Indianapolis and elsewhere develop a basic understanding of these diverse funding options.
Understanding their core mechanics or the way in which they work is a critical part of making the best choices for your business.
All things being equal, a good working knowledge in small business funding will help to ensure that business owners get the most “bang for their buck”, minimizing their cost of borrowing, and keep more money in their own bank accounts and pockets, leading to a greater chance for small business success.
Given the competitive nature of the small business environment, and the often-cited statistics on business failures, small business owners can use every advantage they can get!
So, without further ado, let’s take a closer look at seven key types of small business funding products that are available from banks and/or private lenders today, and how they can best be put to work for businesses in Indianapolis, Indiana, and across the US.
Small Business Loans
- Provide a lump sum of cash up front from lender to borrower
- Repaid over a set period of time, both principal and interest, based on the interest rate set by the lender
- Loan term typically lasts for a few to several years
- Repayment is usually evenly divided across the term, most commonly monthly
Short-Term Business Loans
- Similar to a small business loan, but is meant to be repaid over a shorter term
- Usually the loan term or time for repayment is a few months to a year or two at most
- Interest rates are often higher on an APR (annual) basis, though in practice, because loans are often less than a year, they do not necessarily cost more
- Repayment of the loan is usually much faster, typically with weekly or daily payment frequency
Business Lines of Credit
- No cash is provided up front, but rather approval for a credit limit
- Work similar to a credit card account, effective as a revolving credit facility, allowing borrowing in any amounts needed, provided the outstanding amount is less than the credit limit
- Interest is charged on the outstanding balance only, and not the whole credit line (compared to the entire loan balance in the case of loans)
- Minimum payments in each cycle are common, like a credit card, though you can repay more in any given period
- You can re-borrow against the line on an ongoing basis, in whatever amounts you require, again, so long as the total outstanding is below the maximum limit
- Repayment is typically on a monthly schedule, though weekly or daily is also possible, though less common
Merchant Cash Advances
- Also known as MCA loans, though not technically a loan
- Really, they are a pre-sale of future debt or credit card sales, at a discount, in exchange for a lump sum of cash up front
- The discount is effectively the interest rate, called a factor rate
- The term is open-ended and not fixed to a calendar date
- Repayment is variable, and based solely on the rate of your sales, so higher revenue periods mean more repayment, slower mean less repayment
- Repayment occurs automatically once a merchant cash advance is setup
- One of the easiest small business funding products to obtain
- Not suitable if a small business doesn’t do a significant amount of their sales through credit or debit cards
Debt Consolidation Loans
- A loan not used for business funding, but for paying down existing debt
- Provides a lump sum of cash for debt consolidation
- Typically offers a lower interest rate than some or all of existing debts you may currently hold, generating substantial long-term savings on debt service costs
- Consolidating debt saves money on service fees as well, streamlining repayment to a single servicer and schedule
Special small business loans for women-owned businesses
- Work in the same way as ordinary small business loans
- Separate product that is designed to increase and improve access to capital for this demographic, which has historically been discriminated against, and been denied loans and credit that similar-credentialed male-owned businesses would receive without issue
Bad Credit Business Loans
- Small business loans for businesses with bad credit score/history or a limited credit history
- Work in the same way as ordinary small business loans
- Usually have more easily-met qualification requirements, such as reduced or relaxed credit score minimums
- Allow a large portion of the credit score spectrum to qualify for a small business loan
- Least likely to be offered by banks and traditional financial institutions, and are far more common among private lenders
Sources of Small Business Funding in Indianapolis
Now that we’ve covered the basics of the different types of small business funding available, the next – and perhaps most critical – part of securing funding is to choose the type of lender from whom you wish to seek funding.
For small business loans in Indianapolis, and all of the other kinds of funding we’ve discussed, this amounts to a choice between banks and private, non-bank lenders.
This simple choice is important, as it can play a profound role in a host of different aspects of your eventual loan or credit product, including:
- What kinds of small business funding may be available
- What the qualification requirements may be, and how easy it is for your business to qualify for your chosen type of small business funding
- Approval odds, e.g. your odds of successfully being approved for and obtaining the loan or credit product
- The lead time, amount of paperwork, documentation, and expected turnaround time for your application/approval and getting funded
- The entire range of details regarding interest rates, loan amounts, durations or terms for the loans, credit limits, etc.
- Whether or not your chosen form of small business funding, such as a small business loan in Indianapolis, will require collateral or not
It is on that last point where banks and private lenders differ the most, though it is hardly the only difference, as we’ll discuss below.
Generally speaking, whether or not a loan requires collateral is a big factor in the ultimate risk to a business, risk to a lender, and the interest rates that are likely to be charged on the loan.
In terms of small business funding, including most business loans in Indianapolis, loans requiring collateral are known as secured loans, whereas those that don’t require collateral are known as unsecured loans.
Most often, banks are likely to only offer secured loans, whereas private lenders are more likely to offer unsecured loans.
The choice of a secured or unsecured loan really comes down to what assets you may have available to use as collateral, and whether or not you are willing to take the risk of losing those assets. When you default on a secured loan, the assets are forfeit in order to repay the lender.
Because of the way in which assets are valued, many borrowers seeking, for example, a $50,000 small business loan in Indiana might need to put up between $150,000 – $250,000 (original purchase price) in collateral assets.
In exchange, they get a slightly lower interest rate on their loan or credit product. For many small business owners, this is simply an unacceptable risk, and so they prefer unsecured loans. This choice also plays another role in the choice of lender.
Since secured loans require collateral assessment and valuation by a professional, most secured business loans in Indianapolis take weeks to as much as a month to complete and finalize.
By contrast, most private lenders offering unsecured loans can close in a matter of days, and get you funded within as little as 1 business day following execution of the loan agreement.
For small businesses looking to take advantage of emerging opportunities or respond to changes in market trends, time is of the essence, and so the shorter lead time on an unsecured loan makes the most sense, and thus private lenders.
There are many other reasons why private lenders and unsecured loans are often preferred by small business owners, whether they are seeking lines of credit, short-term loans, or ordinary business loans in Indiana and elsewhere.
Many of these advantages stem from the fact that banks are risk-averse, and consider small business lending as a risky industry.
Therefore, they set fairly high bars for applicants to meet, taking only the best of the best in terms of borrowers, and shutting out many deserving small businesses.
Private lenders, by contrast, are much more realistic about risk, and serve a much wider range of the small business community. In addition, they also offer advantages such as:
- More easily-met eligibility requirements in order to qualify for most small business funding products from private lenders, especially in comparison to banks.
These can include lower minimum credit score requirements, smaller minimum monthly revenue requirements, and shorter time-in-business requirements.
That makes it easier to qualify for business loans in Indianapolis or elsewhere when choosing a private lender compared to a bank or traditional financial institution.
- In most cases, a much easier and shorter application and approval process, especially for an unsecured loan at a private lender compared with secured loans and/or bank loans in general.
The lack of collateral valuation means much faster loan approval times, and a focus on service among private lenders means that funding delivery is also many times faster, as short as 1 business day.
- As we briefly discussed above, private lenders offering unsecured business loans in Indiana present a lower risk for small business owners looking to borrow money, since they are not putting assets on the line as with a secured loan from a bank.
Considering that the first few years are the hardest for most small businesses, and many small businesses fail within the first few years, not gambling all of your assets on repaying a loan just makes sense to most small business owners.
- Loans from private lenders are often available even to businesses with bad credit or a limited credit history – so-called bad credit business loans.
This concept would be laughed out of the room at most banks and traditional lenders. As such, private lenders provide increased access to capital for small businesses who are struggling in their early years, and often are the most in need of access to quick, reliable small business funding.
Considered as a whole, it should be clear that private lenders, unsecured small business financing options, and the benefits they offer make it easier, faster, and less risky to obtain working capital or project-specific funding for small business owners today.
If your business is seeking a loan in Indiana or elsewhere in the US, a private lender and unsecured loan (or other small business funding product) may be the ideal choice.
BizFly Funding – A Leader in Small Business Funding for Indianapolis Businesses
The last step in your small business funding journey is to start the application process at your chosen lender. Hopefully, we’ve convinced you that a private lender and an unsecured small business funding option is the best choice.
Now that you have a good grasp on the different kinds of credit and loan products available, you should be ready to research, review, and apply for a business loan in Indianapolis, or whatever other kind of small business funding you might require.
For your own benefit, we highly encourage you to consider BizFly Funding as your private lender of choice. BizFly Funding is one of the leading providers of small business funding in the US today.
They deal exclusively in small business funding, serving the needs of the small business community across all market sectors or industries.
With their expertise, you’ll be able to find your ideal type of small business funding, take out a credit line or business loan in Indianapolis, and get up to $1 million in funding on several of their funding products.
It’s easy and fast to apply, and you’ve got high odds of approval. Even if your credit is bad, you haven’t been in business for a very long time, or don’t have a massive amount of monthly revenue – the eligibility requirements at BizFly Funding are fairly easy to meet.
In addition, the interest rates are affordable, loan and credit line terms quite varied to meet all your business needs, and the service is outstanding – what more could you ask for?!
Though subject to change (the latest requirements are always available on the website and as part of the application process), the core qualification requirements for some of the most popular options in the small business funding portfolio at BizFly Funding are highlighted below.
- Loan term of 2 to 36 months
- Minimum 6 months in business
- Credit score of at least 500
- $10,000 minimum monthly revenue
- Loan amounts of $5,000 to $1 million
- Interest rates of 9 to 45%
- Loan term of 6 to 24 months
- Minimum 12 months in business
- Credit score of at least 600
- $10,000 minimum monthly revenue
- Loan amounts of $15,000 to $1 million
- Interest rates of 9 to 45%
- Loan term is variable (repayment is based on sales and not tied to the calendar)
- Minimum 2 months in business
- Credit score of at least 500
- $8,000 minimum monthly revenue
- Loan amounts of $8,000 to $250,000
- Factor rates of 24 to 49%
- Credit line term is variable
- Minimum 6 months in business
- Credit score of at least 650
- $10,000 minimum monthly revenue
- Credit line amounts of $5,000 to $250,000
- Interest rates of 5 to 10%
When you need fast cash for your small business funding in Indianapolis or elsewhere in the US, there’s no better choice than a private lender like BizFly Funding. Don’t wait weeks or even a month or more to get vital funds from a bank.
Instead, get your money faster, easier, and with less hassle when you choose BizFly Funding – get the cash you need for your business to succeed! To learn more or to start the application process, visit BizFly Funding online at https://bizflyfunding.com.
