Small business loans Nebraska

Because every small business loan and lender is different, it’s important to understand the application process before you begin. To apply for a small business loan in Nebraska, you can follow these general steps:

1. Prepare your business plan: Before you apply for a loan, make sure you have a well-thought-out business plan. This will help you explain how you intend to use the funds from the loan, which can help a lender decide to approve your application. 
2. Check your credit: Because your credit score is one of the most important factors in determining your creditworthiness, or ability to repay a loan, knowing your score can help you decide which loans to apply for. 
3. Find suitable lenders: Research and identify potential lenders in Nebraska and nationally. If you have a business relationship with a bank or credit union, these can be good places to start. Make a list of national banks, online lenders and others that lend to businesses like yours and start comparing rates and terms. 
4. Gather documentation: Most lenders will require standard business documentation, including financial statements, tax returns and legal documents as well as personal identification. Having these ready before you apply can speed up the process.
5. Choose the right loan type: Select the loan that best fits your business needs. Consider how much money you need, how you plan to use the money and when you need it. Also consider which loans you qualify for so that you can apply with confidence.
6. Complete the application: Fill out the loan application provided by your chosen lender. Depending on which lender you choose, you may be able to fill out your application online. Many lenders will provide a loan advisor or account manager to guide you through the process.
7. Review and submit: Carefully review your loan application before submitting it. Make sure that you’ve included all the required documents and that the information is accurate. You may get a business consultant or accountant to review your application for you as well. 
8. Wait for approval: Depending on which type of business loan you apply for, approval times can take anywhere from several days to several months. Be prepared to provide extra documentation or information if the lender asks for it. The quicker you respond, the quicker they can continue with their underwriting and approval processes. 
9. Negotiate terms: If you receive a loan offer, review the terms and conditions. Use a loan calculator to help you determine the full cost of the loan, including fees and interest, and to help you determine your monthly payment. If you have a high enough credit score and a relatively strong financial history, you may be able to negotiate your interest rate. 
10. Finalize the agreement: Once you and the lender agree on the terms, you’ll sign the loan agreement. Make sure you understand any down payments, collateral requirements or fees as well as any stipulations on how you can use the loan. Also, make sure that you know when your repayments kick in. 

Always communicate directly with your lender and ask questions if you’re unclear about anything throughout the loan process. 

What credit score do I need?

Because every loan is different, there’s no one credit score that will magically unlock business loans for any borrower. However, a higher credit score generally means you’re more likely to be approved and you have a better chance of getting lower interest rates.

For traditional loans, most lenders prefer borrowers with credit scores of 700 or higher. SBA loans may be more flexible, offering loans to borrowers with credit scores between 650-680, although they may require collateral or down payments. 

Online or alternative lenders tend to be even more flexible and may approve loans for borrowers with credit scores as low as 550. These loans will generally come with much higher interest rates – sometimes as high as 99% – to make up for the risk the lender takes on. 

While your credit score is a significant factor in how likely you are to be approved for a loan, it’s not the only thing lenders consider. Your business’s financial health, cash flow and how you plan to use the money can also influence their decision. Even if your credit score isn’t within a preferred range, you may still be eligible for certain financing options, although you’re likely to encounter higher interest rates or less favorable terms. 

You can also work on improving your credit score over time to improve your chances of securing a loan before you apply. There are alternative financing options that you can use in the meantime to fund your business. 

What are typical interest rates on a business loan in Nebraska?

Interest rates on business loans in Nebraska vary depending on several factors, such as:

• The type of loan
• The amount of the loan
• The lender
• The creditworthiness of the borrower
• Economics and market rates

For traditional bank loans, the average interest rate in 2023 for a small business loan was between 7-9%. SBA loans, which are tied to the U.S. Prime rate, averaged 11-16%, depending on the loan program and lender. Online loans had a much wider range of interest rates – anywhere from 3.49-60.9%. 

Again, these are average rates and your qualifications, industry and the amount of money you apply for can all affect your rates. Check with your lender about what type of interest rate you can expect from your chosen loan.

What alternative business financing options are there?

If you don’t qualify for a loan, can’t wait for loan processing times or don’t feel you can afford to repay a loan, there are several other financing options available for your Nebraska small business:

1. Invoice financing: This option allows businesses to receive a cash advance based on their outstanding invoices. 
2. Merchant cash advances: Businesses can receive a lump sum upfront in exchange for a percentage of future credit card sales. Merchant cash advances can be more expensive.
3. Equipment financing: Specific loans are available for purchasing equipment. The equipment serves as collateral.
4. Business lines of credit: Similar to credit cards, a financial institution extends your business a set spending amount up to a credit limit. You only pay interest on the amount of funding you use, and you may be able to access the credit again once you’ve repaid it. 
5. Crowdfunding: Businesses can raise funds by appealing to a large number of individuals through crowdfunding platforms.
6. Angel investors: Individual investors provide funding in exchange for equity ownership in the business.
7. Venture capital: For high-growth potential businesses, venture capital firms provide funding in exchange for equity.