Whether you’re starting a new business in Brooklyn or expanding your existing small business in Rochester, New York state offers entrepreneurs and business owners access to many types of small business loans outside.
There are also creative funding options available through alternative sources to help start or grow your small business. Commercial bank loans and lines of credit are widely available to businesses throughout New York, as are quick-funding options like merchant cash advances and invoice funding. Savvy entrepreneurs can also explore private investment and peer-to-peer funding solutions.
Whatever path you take, research and preparation are key to landing the financing you need. Explore small business loans in New York state and alternative options below.
As New York state’s business landscape expands, business owners enjoy access to more small business financing options than ever before. Traditional lenders such as banks, credit unions and non-bank online loan platforms offer a variety of commercial loans as well as loans backed by the U.S. Small Business Administration in New York.
Traditional small business loans in New York state help small businesses raise capital for all types of business needs, including:
Thanks to modern online brokerage platforms like Swoop, small business owners can also tap into nontraditional financing solutions. Products including merchant cash advances, invoice funding and equity financing through private investors offer creative solutions that help entrepreneurs get the funding they need to thrive.
In many cases, these alternative sources offer quicker application, approval and funding times. They may also offer funding to small businesses that don’t qualify for traditional or SBA loans due to lower credit scores or shorter times in business. However, many of these options also come with higher interest rates and shorter repayment times to make up for the risk in lending to borrowers who might be considered less creditworthy.
Federal, state, municipal and privately-funded business development programs are another funding source for small businesses in New York state. Opportunities such as the New York State Small Business Credit Initiative (SSBCI) and the Women’s Venture Fund help small businesses that meet certain criteria. Others lend to small businesses within specific regions, such as the Adirondack Economic Development Corporation, Bronx Overall Economic Development Corporation, Buffalo Urban Development Corporation and Westminster Economic Development Initiative, to name a few.
You can research these and other programs that support small business loans in New York state on the Empire State Development website. These development-focused loan programs can greatly benefit small businesses that fit their requirements.
In addition to small business loans, New York state programs and foundations offer many grant opportunities for small businesses and nonprofit organizations. Business grants are very popular because these sums of money don’t have to be paid back.
However, their popularity makes them extremely competitive. Grants backed by public and private entities have strict qualifying criteria and typically focus on companies that support community improvement initiatives.
Industries that attract grant funding include housing projects, urban renewal programs, rural development and art and educational nonprofits. Some grant programs are aimed at underserved communities or groups, such as women- or veteran-owned businesses.
If your business might be a fit for grant funding, start your research with these programs targeting New York City and state regions:
If you’re pursuing a small business grant or loan in New York state, it’s essential to research various funding sources and compile a well-prepared application package. The process can be complex, but these five general steps will help keep you on track to your funding goal.
Each lender or funding program may have specific requirements for applying, such as applying in person vs. online, different documents or minimum qualifications for the applicant. Contact your lender to find out what you need to apply to help speed up the process.
Entrepreneurs and small business owners throughout the New York region are increasingly turning to alternative financing solutions. Merchant cash advances, equity investment, convertible debt and invoice funding are a few alternative options that have been around for years. Thanks to online brokerages such as Swoop, these financing solutions are readily accessible to businesses of all types and sizes.
Online technology also makes crowdfunding and peer-to-peer lending attractive options for small businesses, particularly startups. These investor-focused platforms connect entrepreneurs and small businesses with individuals and groups looking to invest in novel ideas. Websites and apps enable every detail, from business opportunity marketing to investor transfers, ownership share tracking and shareholder payouts.
Traditional lenders in the New York region generally look for personal credit scores of at least 680, considered “good,” for business owners or principals applying for a small business loan. Higher credit scores often open the door to better interest rates, longer repayment terms and possibly waived down payments or collateral requirements.
In addition to credit scores, lenders consider business financials, forecasts and assets, and the experience of the owner or principals. Lenders often require a thorough business plan, particularly for startups, acquisitions and expansions.
If credit scores fall short, securing a small business loan in New York state is still possible. Lenders weigh the track record, financial health, assets and forecasts of established businesses. If the business is creditworthy or able to collateralize assets, it can meet loan requirements, though typically with a higher interest rate or less favorable terms. At the same time, alternative lenders tend to be more willing to lend to borrowers with lower credit scores, although this usually means higher interest rates.
To get the best financing terms, take time to review and shore up the personal credit scores of the principals, analyze business financials and explore alternatives to traditional loan products.
Rates for small business loans in New York City and throughout the state can range on average from 7% to 20%, although some outliers may be as low as 3% and as high as 60%. Interest rates depend on several factors that lenders use to assess risk. The age, financial stability and assets of the business play a significant role, as do the credit scores of the owners or principles.
Interest rates are tied to the type of loan as well. Unsecured loans for working capital, cash flow and startup funding come with higher interest rates than secured loans that attach assets as collateral. Equipment and vehicle loans and commercial mortgages are examples of asset-backed loans with lower rates.
Businesses seeking short-term capital can look to alternative financing products for quick funding. Merchant cash advances and invoice funding are two popular cash flow loan options that base rates on monies expected to be deposited instead of overall financials. Private equity investments and New York development loans are other funding sources that offer rate flexibility.
From application to funding, traditional bank and SBA loan processes can be as short as a few weeks or take several months. Underwriting requirements, loan conditions and the type of loan all play a role in approval times, but being well-prepared can help speed everything up. Online or alternative loans are known for funding more quickly, sometimes in as few as two business days.
For quicker approvals and funding options, business owners can tap online brokerages, such as Swoop. These web-based lender marketplaces match loan applicants to ready lenders, and their streamlined systems can speed up the application-to-approval process. Online brokerages make it easy to explore all quick-funding products, such as merchant cash advances and invoice funding, that business owners can turn to for quick injections of cash.
An online brokerage platform such as Swoop is a good place to start your search for small business loans in New York. You can explore loan products, rates and terms offered by various lenders, plus check out alternative financing opportunities in one convenient spot.
Commercial bankers and state and regional small business organizations that provide financing guidance and grant opportunities are also good sources to research. Networking with other local business owners can give you insight into funding opportunities and best practices on applying.
To ensure you find the best funding solution for your unique needs, take the time to ask questions and understand every detail of the loans or other options you’re considering. Seemingly minor variations in interest rates, payment terms, loan amounts and payoff schedules can make a big difference to the long-term cost of your loan. Comparing final options line by line can help you spot the most favorable terms and pick the best deal for your situation.
Swoop’s online brokerage platform simplifies the hunt for small business funding by connecting you with a full range of financing solutions. You can compare traditional loan products in just a few clicks, explore quick-funding options such as merchant cash advances, and check into investor and grant opportunities.
You can even reduce banking fees and utility bills using their service to help boost your bottom line and give you more cash to invest in your success. Get started today.
Daire made it happen! There is no doubt that Swoop sped up the process and found lenders that worked to our time scale rather than the other way round
Joint owner, F45 Virginia
Swoop was actually very helpful in helping us get our initial fundraising in place. Swoop was able to connect us with investors, with grant financing options and debt financing options.
Founder, SingleKey
Pedja was amazing. Super supportive, understanding of our needs and wasn't pushy at all. We've been going back and forth with Swoop for over a year inquiring about different financing options and they were patient until we were ready!
F45 Multi-studio owner
UK
IRE
AU
CA
US
ZA
NG
yet? Register here!