To find a business loan, start by looking in your area for a bank that specializes in small business lending. Check this statewide list of banks as a starting point. Your own local bank is probably a good first stop. Because you have a relationship with that bank already, that banker could possibly become an ally for you. It will be helpful for you to have a business loan with the same bank that handles your checking and savings accounts, for example. Obtaining a loan from a different bank may ultimately require you to move your personal accounts to that bank as well.
Your local bank may participate in Small Business Administration or other loan guarantee programs. If your bank is unable to help you, contact other community banks in your area. Smaller banks often pride themselves on helping small business owners with loan guarantee programs. These guarantees reduce the risk for the bank if it decides to lend to a small business that has limited assets with which to start.
Because these guarantees to the bank come from the federal government (the SBA), the bank may have additional discretion regarding the collateral required to back the loan. Usually, SBA loan programs provide a guarantee to the bank that between 50 and 90 percent of the loan will be repaid to the bank if the business owner is unable to pay. This PDF has a complete list of the types of SBA loans that may be available through a bank near you.
Accessing these kinds of SBA-guaranteed loan programs requires business owners to go to a participating bank, not to the SBA itself. Again, begin with this list of participating banks. Some banks may also participate in loan programs that are guaranteed through the NH Business Finance Authority, which can work in conjunction with the federal Small Business Administration. You may want to investigate these possibilities with your bank as well.
Businesses just starting out or existing businesses needing financing should also check with the economic development agencies in their regions. Some of these agencies offer financing programs to help finance and develop certain types of businesses in their specific geographic areas.
Small loans or micro-lending
The North Country Investment Corporation (NCIC) is a private, non-profit organization that also provides relatively small loans to businesses. NCIC offers loans of up to $35,000 statewide. You can use these loans for real estate, equipment, working capital and/or inventory purchases. For the NH counties of Carroll, Coos and Grafton, NCIC offers a wider variety of financing products including loans with guarantees from the Small Business Administration.
The New Hampshire Community Loan Fund offers loans and investments for growing businesses that are at least a year old. It offersBusiness Builder loans of $1,000 to $1 million, and Vested for Growth which provide risk-tolerant capital up to $1 million, along with business education, and peer-learning opportunities. With either option, up to $2 million may be available from other lending partners.
Alternative sources of financing
This list from the New Hampshire Division of Economic Development includes organizations that provide some of the alternative sources of funding we’ve already mentioned above, plus links to highly specialized organizations that may be of help to certain types of businesses.
Finding more help
The NH SBDC is able to provide advice as you proceed through the many steps to get financing. Each of our certified business counselors is qualified to help you begin and succeed in seeking financing for your new or existing business.
Other counseling resources in the state include the Center for Women’s Business Development and the organization SCORE. SCORE is a nonprofit organization that uses retired business executives to help new and existing businesses succeed. SCORE Chapters are active throughout New Hampshire.
Next: What do Banks Look For in a Credit Application?