Rated as one of the best states to do business, North Carolina is an entrepreneur’s paradise. In the Tar Heel State, you can find a number of business resources to help your company grow. That includes business loans in North Carolina that could help you launch or expand your company.
Let’s take a look at everything North Carolina has to offer a small business like yours.
Where Can I Find Business Loans in North Carolina?
Let's start our journey with business loans that are only available to North Carolina businesses.
NC Rural Center's Loan Participation Program
The North Carolina Rural Center funds $30,000 to $800,000 loans (through lenders) to small- and medium-sized businesses in North Carolina that are socially or economically disadvantaged. Interest rates and fees vary by lender, and repayment terms are for up to 10 years.
Businesses with 500 or fewer employees are eligible to apply.
Capital Access Program
The Capital Access Program in North Carolina provides up to $150,000 in financing. The minimum contribution from the borrower is 2%. This program is ideal for borrowers who don't have collateral for traditional loans, and who have 500 or fewer employees.
Carolina Small Business Development Fund
With the Carolina Small Business Development Fund, you can borrow up to $350,000, as well as receive technical assistance for your business. This program is available to emerging entrepreneurs and established businesses in all industries.
Mountain Bizworks
Mountain Bizworks offers nontraditional financing of $1,000 up to $500,000. This program also offers business courses and coaching. Businesses in western North Carolina are eligible to apply.
What Other Business Loans Can I Find in North Carolina?
Besides these North Carolina-specific loans, there are other financing options worth exploring if you're looking for funds to grow your company.
SBA Loans
Brands like Headway Capital offer loans backed by the Small Business Administration. These tend to have lower interest rates than other lenders and offer repayment terms of up to 25 years. To qualify, you must have exhausted all other financing options.
Traditional Loans
Banks (like US Bank) and credit unions often offer business term loans with competitive interest rates and terms. To qualify, you may need to be in business for at least two years and have a certain credit score, depending on the lender.
Online-Only Lenders
Online business loan lending has expanded significantly over the past few years. Online-only lenders like Rapid Funding offer loans that may be easier for some applicants to qualify for. There are loans available for brand-new businesses and those with lower credit scores or revenues.
Microloans
For North Carolina businesses that need $50,000 or less, a microloan may be an option to consider. These may have shorter repayment periods than traditional loans.
Lines of Credit
With a business line of credit, you can borrow, repay, and borrow more, up to your limit, as often as you like. Lenders like BlueVine approve you for a certain amount, and you can borrow up to that amount at any time. Once you pay it back, the amount is available to borrow from again.
Equipment Financing
If your business needs machinery, company vehicles, computers, or other equipment, Credibly and other equipment financing specialists offer loans for that purpose. The equipment acts as collateral to secure the loan. That means that if you fail to repay the loan, you could lose the equipment. Equipment loans often have lower interest rates than comparable loans that have no collateral.
Business Credit Cards
Another option for your North Carolina business is to open a business credit card with American Express or another credit card issuer. Business credit cards make it easy to pay for business expenses over time if you need to. They aren't ideal for long term financing because they tend to have very high interest rates compared to loans.
Where Can I Find Help for My North Carolina Small Business?
Several North Carolina resources provide mentoring, education, and networking opportunities to business owners.
NC Venture Capital Program
The North Carolina Venture Capital Program supports early-stage startups in North Carolina by providing investor funds. It maintains a heavy focus on businesses run by socially and economically disadvantaged people.
North Carolina Small Business and Technology Development Center (SBTDC)
The SBTDC provides management counseling and educational services to businesses at all stages of development and growth.
Economic Development Partnership of North Carolina
You can get free one-on-one consultations to help you start a business from the Economic Development Partnership of North Carolina. Topics include regulatory requirements, licensing stipulations, and small business training.
What About North Carolina Small Business Grants?
Business loans in North Carolina have to be repaid over time, whereas North Carolina business grants provide funds that don't have to be repaid.
NC IDEA MICRO & SEED Grants
The MICRO grant provides $10,000 in funding to early-stage companies in North Carolina to help them grow.
The SEED grant provides up to $50,000 for companies that are ready to scale.
NCWorks Incumbent Worker Training Grant
This program reimburses the costs to train employees who have worked for you for six months or more, up to $15,000 per year.
What Do I Need to Know About Applying for Business Loans in North Carolina?
Once you've determined how much money you need to borrow, there are three things you should consider when you compare loans and lenders:
- Lending requirements
- Collateral requirements
- Whether a personal guarantee is required
Each lender will have different criteria for applicants. Some may be more stringent than others. Traditional lenders and SBA lenders may require you to have a certain credit score, be in business for two or more years, and/or have minimum annual revenues.
If you don't meet the requirements for one lender, keep looking. Some online-only lenders have fewer restrictions for applicants, so if you don't qualify for other types of loans, go online. OnDeck, for example, requires:
- 1+ year in business
- $100k annual revenue
- 625 credit score
While you're doing your research, find out whether the lender requires collateral or a personal guarantee. Loans of higher amounts may require collateral since they present more risk to the lender.
Kapitus, for example, offers both secured and unsecured loans (that is, loans that require collateral and those that don't).
SBA lenders and some traditional and online-only lenders typically require the owner to personally guarantee the loan unless the business itself has an established credit history. That means you’re responsible for paying it back if your business isn't able to.
Some lenders and loan programs don’t require a personal guarantee. For example, for a loan based on revenue, the lender will be more concerned with how much revenue you bring in each month or year.
What Terms to Look for with Business Loans for North Carolina
What terms are good terms? It depends on what you're looking for. Generally, you'll want to find the lowest interest rate possible, but don't stop there. You'll also want to find out how long the repayment period is. Even with a good interest rate, the payment on a three year loan is a lot bigger than the payment on the same loan spread out over 10 years. You’ll need to consider your cash flow.
Look at the lender's reputation on sites like TrustPilot and BBB.org. The best lenders are responsive to questions via multiple channels, including email, chat, and phone. Review what people say about the loan platform or app. Is it easy to access your account and manage the loan?
BusinessLoans.com lets you compare multiple offers with a single application.
