Small business loans Louisiana

Every loan application will be different depending on which lender you choose, which loan program you select and what your needs are. Follow these general guidelines to help you apply for a small business loan in Louisiana:

1. Research different lenders, including credit unions, banks and online lenders. If you have an existing relationship with a local bank, you may want to start there, but remember that national banks may be able to offer you better rates or terms. 
2. Assess your business needs and qualifications, including your financial situation, possible collateral and your personal credit score. Determine how much money you need and what you need it for. You may want to use a loan calculator to get a sense of what monthly payments will look like once you take out a loan. You should also make sure your business plan is clear and matches your ideas to show how you’ll use the funding to grow. 
3. Gather basic documentation, such as tax returns, business financial statements, incorporation documents, licenses, personal identification and business plan. You may be required to provide additional information depending on the loan program or industry you work in, but having these documents handy can help speed up the process. 
4. Complete the application, whether it’s online, in-person or through the mail. You should be prepared to answer any follow-up questions the lender may have so that the process is quick and smooth. It’s a good idea to have a business consultant or accountant review your application to make sure it’s complete.
5. Comply with the loan terms, including repayment dates and amounts as well as how you spend the funds. Defaulting on a loan can mean lost collateral or even damage to your credit score.

What credit score do I need?

Every lender will have different criteria for determining which borrowers qualify for a loan, and credit score is a big one. A credit score over 700 generally demonstrates that you’re “creditworthy”, meaning you’re likely to repay a loan based on your history, and this can get you access to traditional and SBA loans as well as better interest rates and terms. The SBA will sometimes accept scores as low as 620-640 for some of their loan programs, but again, the rates and terms might be less competitive. 

If you have a credit score between 550-620, you may be able to secure a loan through an online or alternative lender. But be aware that they will likely charge you higher interest rates and demand repayment on a shorter timeline than other loan types to make up for their risk in lending to you.

If your credit score is low enough that you don’t think you can qualify for the loan you want or you can’t get agreeable rates or terms, you can work to rebuild your credit and apply for a loan later. There are other funding options available if you need the money while you work on your credit score. 

What are the typical interest rates on a business loan in Louisiana?

Interest rates will vary with the the lender, the type of loan and the amount of money you borrow, as well as your personal borrowing profile. The following are average rates for business loans in Louisiana:

• Traditional loans: 7 – 9%
• SBA loans: 11.5 – 16.5%
• Online loans: 3.49 – 60.9%

Always check with your loan provider to ensure you understand interest rates, repayment terms and any fees or penalties that may apply to your specific loan offer. 

How long does it take to get funds?

Funding times for small business loans can vary depending on the complexity of the application, the loan type and the lender. Many traditional small business loans in Louisiana can fund in as few as six weeks if your application is complete and approved quickly. SBA loans generally take longer due to their underwriting and application procedures and may take six months or more to fund. Online loans often boast that they can fund in as little as 48 hours from your application. 

It’s important to take these timelines into account when considering a small business loan in Louisiana. If you need funding now, you might consider alternative methods of financing, although you may pay more due to higher interest rates. 

What alternative business financing options are there?

If you don’t think you can qualify for a small business loan or you aren’t ready to commit to monthly repayments, there are a few other options to fund your small business in Louisiana:

• Business credit cards: Use a credit card to pay for everyday expenses and improve cash flow for your business. You may also get rewards, points or cash back.
• Business lines of credit: Similar to credit cards, you can spend the credit like cash up to a certain limit and you only pay interest on the money you spend. You may also be able to access the credit once you’ve paid down your balance. 
• Peer-to-peer lending: Platforms where individuals invest for returns.
• Crowdfunding: Enables businesses to raise capital from a broad pool of individuals.
• Merchant cash advances: Ideal for those with established sales, offering upfront capital in exchange for a percentage of future credit card sales.
• Invoice financing: Provides immediate cash for outstanding invoices.
• Angel investors and venture capital: Funding sources for promising startups in exchange for equity.
• Community development financial institutions (CDFIs): Focused on underserved communities, they may offer favorable terms.