It might not come as a surprise, but New York has been ranked among the top five most enterprising states in the United States. The business climate in the state is favorable for small businesses, and there are many resources to help them start up and operate. Entrepreneurs flock to New York City, Buffalo, Rochester, Albany and all in between to realize their dreams of running a business.
But sometimes these businesses need a little help getting off the ground or soaring. This is where small business lending comes in.
What is considered a small business in New York?
While the Small Business Administration has its own definition of what a small business is (one with 500 or fewer employees), New York State has its own definition.
Small government businesses are those with 100 or fewer employees. Why is this important? Small business owners applying for loans or grants may need to meet certain criteria (we’ll get to that later in this article), including the size of their business.
New York Small Business Loan Options
Now let’s take a look at some of the small business financing options you have in New York City.
Coronavirus pandemic loans
While some of the programs designed to help small businesses get back on their feet, in New York City and the rest of the country, are now closed, here’s a look at what was available.
At the federal level, the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans have provided financial assistance to small businesses.
At the state level, the New York Forward Loan Fund (NYFLF) may still be open to New York State businesses seeking financial assistance. Check out the link for the latest updates.
Commercial lenders like traditional banks, credit unions, and online lenders offer long-term loans with low interest rates to small businesses with great credit.
The Small Business Administration in the United States is another funding resource with long term, low interest rate loans. Learn more about programs such as SBA 7 (a) and 504 loans at SBA.gov.
When you don’t need a lump sum all at once, a business line of credit can come in handy because you can borrow on that line a little bit now and a little later. When you pay back what you’ve borrowed, it’s available to borrow again.
If you are specifically looking for financing to buy equipment like computers, machinery, or company vehicles, there are equipment loans that can help. With these, interest rates can be lower because the equipment you buy serves as collateral.
Having one or more business credit cards can be useful for shopping like office supplies. Look for a card with a 0% APR introductory offer and a great rewards program.
Short term loan
Even if you don’t have good credit, there are short-term loan options that will get you the capital you need. Note that these tend to have higher interest rates and shorter repayment terms.
How to qualify for a small business loan in New York
Eligibility for the different types of financing we have discussed will vary among lenders. Existing businesses with strong credit may find it easier to qualify for bank and SBA loans than startups.
If your business is new and you don’t have a credit profile yet, you may want to learn how to establish business credit so that you can take advantage of better deals and lower rates.
How to Apply for a Small Business Loan in New York
Loan applications will also vary in complexity from one lender to another. Online lenders tend to have short applications, requiring little more than a few details about your business and your annual income.
SBA and bank loans may require more details, such as tax returns, financial statements, and a business plan.
If you don’t have a business plan, look for business resources like the New York Small Business Development Center, which can provide technical assistance and help you develop a business plan at no cost.
How to choose the right loan option for your business in New York
With so many financing options, it can be difficult to know which one is right for your New York business.
Start by researching the small business loans you qualify for, then find the one that offers the lowest interest rate and the best terms and conditions. But also look for the lender’s reviews to see what they like to work with.
Nav can help you find the right small business loan to increase your cash flow. Compare lenders and deals in one place today.
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