Small Business Loans
Learn All About Small Business Loans in Nebraska
More than 193,000 small businesses call Nebraska home, and together they account for 99.1% of all enterprises in the state. From the agricultural plains to the “Silicon Prairie” tech hubs in Lincoln and Omaha, these companies employ close to half of the state’s workforce.
Whether you’re launching a startup in the Cornhusker State or expanding a multigenerational farm, finding small business loans in Nebraska is a key step in building your company. Here’s what you need to know about securing financing for your business.
- Key Points
- • The Nebraska Growth Loan Fund allows the state to purchase a portion of a small business’s bank loan to reduce lender risk.
- • The U.S. Department of Agriculture’s Farm Service Agency (USDA FSA) Loans for Beginning Farmers and Ranchers Loan Program provides low-interest loans to help new agricultural entrepreneurs acquire land and assets.
- • The Center for Rural Affairs (CFRA) offers microloans and technical training to small businesses in rural communities.
- • Invest Nebraska provides equity investments, loans, and mentorship to high-growth companies.
- • Nebraska Innovation Fund Prototype Grants offer matching financial assistance to businesses developing new products.
Popular Types of Small Business Loans in Nebraska
Entrepreneurs in Nebraska benefit from a financial landscape that blends strong agricultural support with growing resources for technology and innovation. The sections that follow outline the most common funding options available to business owners across the state.
Nebraska Small Business Loan Programs
The state actively encourages economic growth through the Nebraska Department of Economic Development (DED). The department manages the State Small Business Credit Initiative (SSBCI), which includes the Nebraska Growth Loan Fund to help businesses secure financing by participating in their loans alongside private banks. Additionally, the Nebraska Enterprise Fund serves as a Community Development Financial Institution (CDFI), offering flexible loans and training to startups and underserved businesses that may not qualify for traditional bank credit.
There are also more specifically targeted opportunities. For example, if you have a small business in a rural community, the Center for Rural Affairs (CFRA) offers microloans and technical training. The U.S. Department of Agriculture’s Farm Service Agency (USDA FSA) provides low-interest loans for new farmers and ranchers to help them acquire land and other assets. And Invest Nebraska provides equity investments, loans, and mentorship to high-growth companies.
Term Loans
A term loan can provide a small business with a lump sum of capital upfront. The principal, along with interest (which is usually charged at a fixed rate), is then repaid in regular payments over a defined period of time.
Having a fixed, predictable repayment structure can be useful as you budget into the future, and because the funds come in a lump sum, these loans can be well-suited to funding large, one-time investments. For example, a beef processing plant in Grand Island might use a term loan to expand its packaging facility.
Business Lines of Credit
In contrast to a term loan, a business line of credit can give your company access to a revolving pool of funds that you can draw from as you need money, up to a limit set by the lender. You pay interest only on the money you withdraw, and as you repay the balance, you replenish the pool of funds and can withdraw more again.
This kind of funding can be helpful for businesses that have seasonal or fluctuating needs and income. For instance, a corn farmer near Kearney might use a line of credit to manage fuel and seed costs before the harvest revenue arrives.
Equipment Financing
If you need to purchase a specific physical asset for your company, like machinery, vehicles, or technology, then you might want to apply for equipment financing. A cattle rancher in the Sandhills could use an equipment financing loan to finance a new livestock trailer, while a manufacturing firm in Fremont might use one to acquire a CNC machine.
The equipment serves as collateral for lenders, so equipment financing loans may be easier to obtain and often come with more favorable conditions than unsecured loans.
Small Business Administration (SBA) Loans
Small businesses actually obtain SBA loans from private lenders, but these lending staples are partially guaranteed by the U.S. Small Business Administration. This backing lowers risk for the lender, which means that the loan conditions may allow lower down payments and longer repayment terms. If you qualify, these Nebraska business loans are available through many approved banks and credit unions.
Below are the types of SBA loans that may be the most useful for small businesses.
• The SBA 7(a) loan is very flexible: Amounts can range from $500 to $5 million. It’s suitable for covering working capital, refinancing debt, or purchasing supplies.
• The SBA 504 loan is specifically meant for companies to use on major fixed assets, such as commercial real estate or heavy equipment. The maximum amount is between $5 million and $5.5 million.
• The SBA Microloan is meant to help with short-term needs and can be useful to companies that need startup loans. You can borrow up to $50,000 and the maximum repayment term is seven years.
Using an SBA loan calculator can help you estimate what your loan costs might be for different kinds of SBA funding.
Recommended: Small Business Financing Guide
How to Apply for a Small Business Loan in Nebraska
Applying for a Nebraska small business loan demands preparation and attention to detail. You’ll want to present your potential lenders with a clear picture of your company’s financial health and a well-thought-out plan for how you would use their funds.
Here’s a step-by-step breakdown of how to apply for a small business loan in Nebraska.
Define Your Loan Purpose and Amount
Even before you get in touch with lenders, it’s a good idea to have a precise understanding of your business’s funding needs. You should be able to articulate exactly how much money you require and how it will generate a return. A specific proposal, such as “$50,000 to upgrade our irrigation pivots, which should improve harvest yields by 15%” demonstrates your strategic financial planning.
Know Your Credit Score
When they review your Nebraska business loan application, prospective lenders will generally pay particular attention to your credit profile. They’ll likely scrutinize your personal credit scores: Traditional banks frequently require a credit score for a business loan in the range of 680 or higher. Other lenders, like online banks, may be willing to consider slightly lower scores.
Because of your scores’ importance, it’s practical to review your credit reports before you apply so that you can spot any inaccuracies and have them corrected. It can also help you be sure you fully understand your financial situation before you submit your application for a Nebraska small business loan.
Gather Your Key Documents
Making sure that your application package is organized and complete can speed up the review process as well as signal to your potential lender that you’re reliable and motivated. While requirements vary by lender, you should generally be ready to produce the following:
• Credit report
• Income statement
• Bank statements
• Budget
• Income tax returns (both business and personal)
• Business plan
• Collateral valuation and supporting documents (which may include titles, deeds, or invoices)
Compare Lenders and Loan Offers
When you’re looking at Nebraska small business loans, it’s smart to shop around to find the funding that best suits you, since different banks can offer very different options. It’s also a good idea to compare offers from multiple kinds of sources, including small local banks, large national institutions, and online lenders.
As you evaluate financing proposals, it can be helpful to use a business loan calculator to estimate the monthly payments for different options. You may also want to look closely at the Annual Percentage Rate (APR) of each loan to understand its true cost.
Submit Your Application and Await Approval
After you’ve filled out the application form and gathered your supporting documentation, you should be ready to submit the application package. Once that’s done, you’ll need to wait for the lender’s response.This can take as little as two days in some cases, but may require several weeks in others.
Tips for Improving Your Loan Approval Chances
You may be able to boost your odds of securing a loan by taking steps to strengthen your business’s financial profile before you apply. Presenting a financially strong, low-risk profile can be a good way to win a lender’s confidence.
Here are some strategies to consider trying:
• Ensure that you have a realistic business plan that includes detailed financial projections.
• Work to strengthen your personal and business credit scores by paying down your current balances and making timely payments on outstanding balances.
• If you have collateral available, consider offering it as security to potentially bolster your application’s chance for approval with certain Nebraska business loans.
Other Funding Options for Nebraska Small Businesses
If you find that a traditional loan isn’t the right fit for your business, there may be other ways to fund your business. Nebraska’s entrepreneurial ecosystem offers several alternative pathways to acquire capital. One or more of these options may align better with your business’s specific stage of growth or industry.
Small business grants are a sought-after option because you don’t have to repay them. The Nebraska Department of Economic Development offers grants like the Academic Research and Development Grant, a matching grant that supports the commercialization of new technologies. And Nebraska Innovation Fund Prototype Grants also offer matching financial assistance to businesses developing new products. Additionally, it may be helpful to search national databases like Grants.gov for federal programs relevant to your industry.
Crowdfunding is another viable route, allowing you to raise smaller amounts of capital from a broad base of supporters online.
Additional Business Resources in Nebraska
To succeed in business, you generally need more than just capital. You’ll probably also need expert guidance and a strong, supportive business community. Fortunately, Nebraska has a robust network of resources designed to help small business owners navigate challenges. The Nebraska Business Development Center (NBDC) is a valuable resource in this area, offering no-cost one-on-one advising at centers across the state.
When it comes to mentorship, local SCORE chapters connect entrepreneurs with experienced business leaders who volunteer their time. Additionally, CFRA provides specialized training and networking for rural business owners. Getting involved with your local Chamber of Commerce can also provide valuable networking opportunities.
The Takeaway
Securing a Nebraska small business loan can be the deciding factor that allows your company to expand and grow. By defining your goals and utilizing state resources, you should ultimately be able to find the right financing solution for your company.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
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FAQ
How do I get a small business loan in Nebraska?
If you want to apply for a Nebraska business loan, start by defining your funding needs and checking your credit scores. Next, gather essential documents like your business plan, tax returns, and bank statements to make it easier to complete and submit your application. Finally, compare offers from various lenders to find the best terms available to you for your Nebraska small business loan.
Can I get a startup business loan with no money?
Obtaining a startup business loan with no money can be tricky, since most lenders require an owner’s investment. However, some SBA microloans are designed for startups and may be easier to get. Another option: You might want to research business grants, which provide funding that doesn’t need to be repaid.
How hard is it to get a small business loan in Nebraska?
The degree of difficulty you experience in getting a Nebraska business loan depends on factors like your business’s financial health, time in operation, and credit history. Traditional bank loans can have strict requirements. Online lenders are often more flexible, making them a more accessible option for many Nebraska businesses.
What is the easiest type of business loan to get approved for?
Loans secured by collateral, such as equipment financing, are generally easier to obtain because the asset lowers the lender’s risk. Short-term loans and invoice financing from online lenders also typically have less stringent requirements.
What credit score do I need for a small business loan?
Requirements vary, but for traditional bank and SBA loans, a personal credit score of 680 or higher is often preferred. However, some online lenders may approve applicants with scores in the low 600s. Higher scores generally lead to better approval odds and lower interest rates.
What can I use a Nebraska small business loan for?
You can use a small business loan for almost any legitimate business purpose (but not for personal expenses). Typical uses include purchasing inventory, buying equipment, funding marketing campaigns, or refinancing debt.
Are there any small business grants available in Nebraska?
Yes, grants are available from a number of sources. The Nebraska Department of Economic Development (DED) is an excellent resource for finding state-level opportunities like the Academic Research and Development Grant. You can also try searching national databases like Grants.gov for federal programs relating to your industry.
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