Colorado relies on small business owners in Denver, Boulder, and all points in between, but sometimes those business owners need a little aid when it comes to working capital. They might need help in between invoices or to take advantage of an opportunity for growth. Here’s what you need to know about small business Loans in Colorado.

What about you? What would an injection of cash do for your business? 

How a Small Business Loan Can Help in Colorado

There are a variety of ways a working capital loan can help Colorado businesses like yours. A loan can help cover day-to-day business needs like printer cartridges or payroll. Or a larger commercial real estate loan could get you the larger retail space your business needs to serve more customers.

A business loan can also help during slow periods, especially if your company is one of the many based on tourism.

Options for Small Business Loans in Colorado

Now that we’ve talked about all the ways that loans can help, let’s look at some financing options for you to consider.

COVID-19 Pandemic Loans

Though the darkest days are behind us, the coronavirus pandemic hit many Colorado businesses hard. Both the federal government as well as Colorado government agencies like the Colorado Office of Economic Development and International Trade provided loans and grant programs to help businesses get back on their feet.

The CLIMBER (Colorado Loans to Increase Mainstreet Business Economic Recovery) Loan Fund is one example of a local option: it will provide up to $250 million in working capital loans to Colorado small businesses impacted by COVID-19 through 2023.

Bank Loans

Colorado banks and credit unions provide a variety of small business loans for companies with excellent credit. These may have low interest rates and favorable terms.

SBA Loans

Another option for low-interest loans comes from the U.S. Small Business Administration. There are loans to spur economic development in underserved areas, while others, like the SBA Express and 7(a) loans, can be used for purposes like working capital and to purchase commercial real estate.

Lines of Credit

Loans provide you with a large sum of money all at once, but lines of credit give you access to funds that you can take out as needed. This may be a better fit for your financial needs.

Credit Cards

Another option to consider is a credit card. You or your employees can use business credit cards to purchase what your business needs. Look for a card with 0% APR for the first year, as well as a rewards card that lets you earn points you can use for travel or cash back.

Short-Term Loans

Though these offer higher rates and shorter repayment terms, short-term loans are useful if you don’t qualify for the previously-mentioned options, perhaps because your credit scores are low.

How to Qualify for a Small Business Loan in Colorado

While each lender may have slightly different requirements for borrowers, most will consider your creditworthiness in reviewing eligibility. 

Loans from the SBA or banks may have higher credit requirements than short-term loans or credit cards. Some lenders will look at your business credit, so if you haven’t learned how to establish business credit, that might be a good place to start before applying.

How to Apply for a Small Business Loan in Colorado

Speaking of applying, let’s talk about that loan application. If you’re applying with an online lender, you may only need to provide a few quick details about your business, its revenues, and your personal contact information. You’ll also be asked how much you want to borrow and what you want to use the loan funds for.

How Do I Apply for an SBA Loan in Colorado?

If you’re applying for an SBA loan in Colorado, know that the SBA doesn’t directly lend to businesses. Instead, you’ll need to go through a bank that offers SBA loans. Also important to note: SBA loans are available to existing businesses. If you have a new business, you’ll need to look at other financing options. You can view more information on qualifications at SBA.gov.

In addition to the information listed in the last section, you may also be asked to provide financial documents illustrating your business’ cash flow, and possibly a business plan. If you don’t yet have a business plan, there are business resources throughout the state, such as the Colorado Small Business Development Center, that can help you create one at no cost.

What is a Good Credit Score for a Small Business Loan?

As I said: lenders more than likely will look at your credit scores to decide whether to lend to you. The type of loan you get will determine what sort of scores you need.

When it comes to business scores, the SBA uses FICO’s SBSS score. You should have a score of 140 or higher for an SBA loan, and about 160 or higher for a bank loan.

Colorado Small Business Loans: Where Will You Take Your Business?

As you can see, there are plenty of perks with small business loans. Taking out a loan could be what differentiates your business from all the competitors. How could YOU take your business to the next level?