Small Business Loans
Learn All About Small Business Loans in Vermont
Vermont is home to over 78,000 small businesses, which account for nearly 99% of all enterprises in the state. From the dairy farms and maple sugarbushes of the Green Mountains to the tech startups in Burlington and the artisan makers in Brattleboro, these companies employ roughly 60% of the state’s private workforce.
Whether you are launching a sustainable energy firm in Montpelier or expanding a craft brewery in Stowe, finding small business loans in Vermont is a key step. Here is what you need to know about securing financing for your company.
- Key Points
- • Vermont offers strong state-supported lending options. Programs through VEDA and the Vermont Community Loan Fund help early-stage and community-focused businesses access capital.
- • Multiple loan types meet different business needs. Common options include term loans, lines of credit, equipment financing, and SBA loans.
- • Preparation is critical when applying for a loan. Lenders expect a clear loan purpose, solid credit profile, organized financial documents, and a well-defined business plan.
- • Comparing lenders can reduce borrowing costs. Business owners should review offers from banks, credit unions, and online lenders, paying close attention to APR and repayment terms.
- • Alternative funding and support resources are widely available. Vermont businesses can also explore grants, crowdfunding, and free advisory services through organizations like VtSBDC, SCORE, and CWE.
Popular Types of Small Business Loans in Vermont
Entrepreneurs in the Green Mountain State benefit from a highly accessible financial ecosystem that blends strong state support with active nonprofit lending. The following sections outline the most common funding options available to business owners across Vermont.
Vermont Small Business Loan Programs
The state actively fosters economic growth through the Vermont Economic Development Authority (VEDA). VEDA administers the Small Business Loan Program, which provides working capital to early-stage businesses that have innovative products but lack the collateral for traditional bank loans.
Additionally, the Vermont Community Loan Fund (VCLF) serves as a Community Development Financial Institution (CDFI), offering loans to businesses that strengthen the local food system, support forestry, or provide essential community services.
Term Loans
A term loan provides a lump sum of capital that is repaid over a specific period with regular, fixed payments. This structure makes it an excellent choice for financing large, one-time investments where costs are predictable. For example, a cheese manufacturer in Middlebury might use a term loan to construct a new aging cave.
Recommended: Startup Business Loans
Business Lines of Credit
Unlike a term loan, a business line of credit gives you access to a revolving pool of funds that you can draw from as needed. You only pay interest on the money you actually use, and as you repay the balance, your credit becomes available again. A ski shop in Killington, for example, could use a line of credit to purchase winter inventory before the lifts open.
Equipment Financing
Equipment financing is a loan specifically designed to purchase physical assets, such as machinery, vehicles, or technology. Because the equipment itself serves as collateral, these loans often come with more accessible approval standards.
SBA Loans
SBA loans are issued by private lenders but are partially guaranteed by the U.S. Small Business Administration. This federal backing reduces the lender’s risk, which can lead to lower down payments and longer repayment terms. These Vermont business loans are widely available through approved banks and credit unions.
The most common types are the SBA 7(a) and 504 loans. The 7(a) program is highly versatile, suitable for working capital, refinancing debt, or purchasing supplies. The 504 loan is specifically for major fixed assets, such as purchasing commercial real estate or heavy equipment that promotes business growth and job creation.
Recommended: 15 Types of Business Loans to Consider
How to Apply for a Small Business Loan in Vermont
Applying for a Vermont small business loan requires preparation and attention to detail. Lenders want to see a clear picture of your financial health and a well-thought-out plan for how their funds will be used. By organizing your documents in advance, you can present a professional application that stands out during the underwriting process.
Define Your Loan Purpose and Amount
Before contacting lenders, you must have a precise understanding of your funding needs. You should be able to articulate exactly how much money is needed and how it will generate a return. A specific proposal, such as “$50,000 to expand our greenhouse capacity,” demonstrates strategic thinking and financial discipline.
Know Your Credit Score
Your credit profile is one of the first things a lender will review. Personal credit scores are critical, with traditional banks often looking for scores of 680 or higher. It is smart to check your reports beforehand to identify any errors and understand where you stand before submitting an application.
Recommended: Credit Scores for Business Loans
Gather Your Key Documents
A complete application package speeds up the review process and signals reliability. While requirements vary by lender, you should generally be prepared to provide a detailed business plan. You will also need personal and business tax returns for the last two to three years, along with recent bank statements.
Compare Lenders and Loan Offers
It is important to shop around to find the financing that best fits your needs. Compare offers from multiple sources, including local community banks, large national institutions, and online lenders. When evaluating proposals, look closely at the annual percentage rate (APR) to understand the true cost of the loan.
Submit Your Application and Await Approval
Once you’ve selected a lender and gathered your documentation, you can submit your loan application online or in person. After submission, the lender will review your financial information, assess risk, and notify you of approval or next steps, which may include providing additional details.
Recommended: Small Business Financing Guide
Tips for Improving Your Loan Approval Chances
You can improve your odds of securing a loan by taking steps to strengthen your business’s financial foundation before you apply. Lenders are looking for evidence of stability and the ability to repay. Presenting a strong, low-risk profile is the best way to win their confidence.
Start by ensuring your business plan is realistic and includes detailed financial projections. Work on improving your personal and business credit scores by paying down existing balances and making all payments on time. If available, offering collateral can also strengthen your application for certain Vermont business loans.
Other Funding Options for Vermont Small Businesses
If a traditional loan isn’t the right fit, there are other ways to fund your business. Vermont’s entrepreneurial ecosystem offers several alternative paths for capital. These options may align better with your specific stage of growth or industry.
Business grants are a highly sought-after option because they do not require repayment. The Working Lands Enterprise Fund offers grants to agriculture and forestry businesses for infrastructure projects, while the State Trade Expansion Program (STEP) helps companies reach international markets. Crowdfunding is another viable route, allowing you to raise smaller amounts of capital from a broad base of supporters online.
Additional Business Resources in Vermont
Success in business often requires more than just capital; it requires guidance and community. Vermont has a robust network of resources designed to help small business owners navigate challenges. The Vermont Small Business Development Center (VtSBDC) is a premier resource, offering no-cost advising and training at locations statewide.
For mentorship, local SCORE chapters connect entrepreneurs with experienced business leaders who volunteer their time. Additionally, the Center for Women & Enterprise (CWE) provides specialized training and certification for women-owned businesses. Engaging with your local Chamber of Commerce can also provide valuable networking opportunities.
The Takeaway
Securing a Vermont small business loan can be the decisive factor that allows your company to expand. While the process involves careful planning, it is an achievable step for any focused entrepreneur. By defining your goals and utilizing state resources, you can find the right financing solution.
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.
(without impacting your credit score)†
FAQ
How do I get a small business loan in Vermont?
Start by defining your funding needs and checking your credit scores. Gather essential documents like your business plan, tax returns, and bank statements. Finally, compare offers from various lenders to find the best terms for your Vermont small business loan.
Can I get a startup business loan with no money?
It is challenging, as most lenders require an owner’s investment. However, some SBA microloans and the Vermont Community Loan Fund (VCLF) are designed for startups and may have more flexible requirements. Another option is to research business grants, which provide funding that does not need to be repaid.
How hard is it to get a small business loan in Vermont?
The difficulty depends on your business’s financial health, time in operation, and credit history. Traditional bank loans can be competitive and strict. However, state-backed programs like the Entrepreneurial Loan Program from VEDA are specifically designed to help innovative Vermont businesses that might not qualify for conventional financing.
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. Some online lenders and mission-driven lenders like VCLF may approve applicants with scores in the low 600s if the business plan is strong.
What can I use a Vermont small business loan for?
You can use a small business loan for almost any legitimate business purpose. Common uses include purchasing inventory, buying equipment, funding marketing campaigns, or refinancing debt. Personal expenses are prohibited.
Are there any small business grants available in Vermont?
Yes, grants are available from federal, state, and private sources. The Working Lands Enterprise Initiative is a major state-level resource for agriculture and forestry businesses. You can also search national databases for federal programs relevant to your industry.
SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SoFi receives compensation in the event you obtain a loan, financial product, or service through SoFi’s marketplace. This webpage is owned and operated by SoFi Lending Corp., licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. ((www.nmlsconsumeraccess.org)). This page is NOT operated by SoFi Bank. Loans, financial products, and services may not be available in all states. All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown through SoFi’s marketplace are from providers and are estimates based upon the limited information you provided and are for informational purposes only. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. The actual loan terms you receive, including APR, will depend on the provider you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the providers and not by SoFi Lending Corp. Please review each provider’s Terms and Conditions for additional details.
*Small Business Loans: Reference to “same day funding” or “funding within 24 hours” describes a general capability of many lenders you can reach through SoFi’s marketplace. Funding or funding timing is not guaranteed. Your experience with any lender will vary based on requirements of the lender and the loan you apply for. To determine the timing of funds availability, you must inquire directly with any lender. In addition, your access to any funds from a loan may be dependent on your bank’s ability to clear a transfer and make funds available.
†Credit score impact: To check the options, terms, and/or rates you may qualify for, SoFi and/or its network providers will conduct a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the provider(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit. Rates may not be available from all providers.
©2025 SoFi Lending Corp. All rights reserved.
SOSMB-Q425-090
More Small Business Financing Resources
Business loans don’t have to be complicated. Get clear answers on applications, learn what providers really look for, and understand popular loan options.
Search for small business funding in minutes.
Your time matters. So we’re making business loans as easy as possible by helping you find small business funding fast.
(without impacting your credit score)†