Charlotte, North Carolina, is the most populous city in the Tar Heel State, with almost one million people. North Carolina is the United State’s fifteenth largest city and the county seat of Mecklenburg. The city is the cultural, economic, and transportation center of the Charlotte, NC metropolitan area. The metro area itself has over 2.6 million residents within its boundaries. The city is part of a sixteen-county market region or combined statistical area with a 2018 census population of over 2.8 million. Between 2004 and 2014, Charlotte ranked as America’s fastest-growing metro area.
The Charlotte Center city area has seen remarkable growth over the last decade. Numerous residential units are constructed continuously in Uptown, including over 20 skyscrapers under construction, recently completed, or in the planning stage. Many new restaurants, bars, and clubs now operate in the Uptown area. Several projects are transforming the Midtown Charlotte/Elizabeth area as well.
Charlotte, North Carolina, and the surrounding metropolitan area is a diverse economy that includes banking, financial services, the home of NASCAR, motorsports and racing technology, an extensive energy sector, electric power research, natural gas, trucking and freight transportation hub for the East Coast, and real estate development.
Charlotte is home to the corporate headquarters of Bank of America, and the east coast operations of Wells Fargo, which along with other financial institutions, has made it the second-largest banking center (after New York City) in the United States since 1995.
With all that Charlotte, Mecklenburg County, and the surround metropolitan area has going for it from an economic perspective, Charlotte small businesses still face many challenges getting business loans from traditional lenders like banks or credit unions because they have stringent guidelines, credit requirements, mountains of paperwork, and limited business loans to offer to small businesses. That’s where AdvancePoint can come in to help your business. We have the financing options available that other financial institutions simply do not offer.
How To Get a Small Business Loan in Charlotte, NC?
AdvancePoint is an excellent resource with a business lending marketplace full of a wide variety of alternative business loans and lending partners for small businesses to help your business grow.
The 9 Best Small Business Loan Options for Charlotte, NC Small Businesses
1. Long Term Business Loans
Lenders define long term small business loans as loans with a duration exceeding two years. Businesses in Charlotte are offered a fixed amount up front and then charged principal and interest. Unlike a business line of credit, you cannot draw money as you go with long term loans. Typically, long term loans are a great resource for Charlotte businesses because you can use the extra capital for expansion and help finance larger projects.
Interest Rates: Interest rates start at 5.50% or treasury index plus 1% to 2.5%
Terms: 2 to 10 years
Fees: Origination fees range from 0% to 3% (depends on risk and lender)
Loan Payments: Monthly or bi-weekly
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Long Term Business Loans
2. Business Line of Credit
Business lines of credit are an open revolving line of funding that allows Charlotte businesses to draw funds on-demand as needed or make essential purchases. This type of funding charges a principal and interest rate to small business owners in Charlotte. Business lines of credit have a limit that cannot be exceeded without a lender’s approval and require renewal by lenders either semi-annually or annually to be extended. The primary reasons entrepreneurs in Charlotte choose a business line of credit instead of loans are working capital business needs, affordable rates, and flexible terms.
Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
Terms: Open revolving line
Fees: Origination fees ranging from 0% to 3%
Payment: Monthly, bi-weekly, or weekly
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Business Line of Credit
3. Short Term Small Business Loans
Charlotte’s small businesses can obtain short term business loans, defined as loans typically repaid within 6 to 18 months of issue. These loans offer a lump sum upfront with a fixed payback amount. The payback amount is calculated using a factor over a short term of time. The rates are not principal and interest, but instead a “factor rate” that costs more than traditional loans.
Most Charlotte businesses choose a short term business loan when they do not qualify for a traditional small business loan. Short term loans charge more for costs, and the repayment duration is much shorter. Payments are made more frequently to compensate for the higher risks lenders take in offering this product. These loans are a popular resource for many small businesses in Charlotte because of the reduced documentation requirements (no financial statements required) and much more relaxed tolerances than traditional loans in Charlotte. This product is a fantastic solution for working capital business needs.
Rates: Factor rates range from 1.09% up to 1.45%
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: 0% to 5% origination fees
Payments: Weekly, bi-weekly, and in some cases, daily (Monday-Friday)
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Short Term Business Loans
4. Business Cash Advance
Business cash advances (BCA) are also known as purchase of future sale agreements, which advances future sales at a discount to Charlotte businesses. The business is responsible for paying back a fixed payback known as a specified amount, which is higher than the amount that was advanced to the company. The difference between the advance amount and the payback amount is called the “factor rate or cost,” which is a fixed cost. These are not principal & interest costs.
Charlotte businesses repay the advance by taking a fixed percentage of future overall deposits called the specified percentage. The payments are collected by an ACH fixed daily or weekly payment deducted from a bank account based on the specified percentage of future sales. At the end of every month, reconciliation can occur. If the fixed payments taken out of the bank account monthly are more than the set future percentage of monthly sales, Charlotte small business owners can request a refund back to the business for overpayment so that the set specified percentage of sales collected for the business matches the revenue volumes. Repayment continues until the payback amount is paid back in full. There is no time limit with advances as the fixed payback percentage ever changes due to fluctuating revenue. This product is an excellent solution for working capital business needs.
Rates: Ranges from 1.09% up to 1.45%
Terms: No time limits. Payments continue until paid in full based on specified percentage collection method and are dependent on future revenues
Fees: Origination fees range from 0% to 5%
Payment: Weekly or daily Monday-Friday Fixed ACH
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Business Cash Advance
5. Merchant Cash Advance
A merchant cash advance (MCA), also known as a purchase of future sales agreement, operates very similarly to BCAs. The most significant difference is the repayment process, which is connected to future credit card revenue instead of overall sales. MCAs take a set percentage of future card sales at the time of batch until the advance is paid back in full by a Charlotte business.
Charlotte business owners find this type of funding valuable when they have fluctuating revenue. Business owners don’t want to lock themselves into a fixed payment that could negatively impact cash flow or profit margins if revenues decline or fluctuate. This product does not require financial statements like tax returns. As a reminder, a merchant cash advance is not a loan, but an advance, by selling a portion of the business’s future sales at a discount to a funder in exchange for cash now. This product is a fantastic solution for business owners in Charlotte that have working capital business needs.
Rates: Range from 1.09% up to 1.45%
Terms: No time limits
Fees: Origination fees range from 0% to 3%
Payment: Set fixed percentage of future credit card revenues
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Merchant Cash Advance
6. Equipment Loans
Charlotte area businesses that use equipment during daily operations often turn to equipment loans to purchase machinery. This fantastic funding option secures the equipment itself as collateral in the event a business owner defaults. The good news for Charlotte businesses is that equipment financing requires limited paperwork. All you need is a one-page application and a few bank statements to get started. Equipment loans are easy to apply for and fast to obtain. Sometimes, business owners can be approved on the spot, although additional time is typically required.
Rate: Range from 1.09% up to 1.45%
Terms: 2 to 7 years
Fees: Origination fees range from 0% to 3%
Payments: Weekly or daily (Monday-Friday) fixed ACH
Credit Standards: All types considered (Lenders vary on credit score requirements)
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7. Small Business Administration (SBA) Loans for Businesses
The Small Business Administration (SBA) is a federal government agency that provides loan programs, loan guidelines, and loan guarantees to approved SBA lenders, who then issue small business loans to enterprises in Charlotte. The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, finance, and grow their businesses successfully through a loan program.
The SBA is not a lender itself, but instead provides a guarantee that gives approved lenders the ability to take on more risks which they might not ordinarily accept on their own. The SBA has rights reserved for any required recourse. Small Business Association (SBA) loans are highly sought after by small businesses in Charlotte. There are many government-approved lenders to choose from that offer the SBA loan program. Business owners should expect an SBA loan program to require a business plan to get financing. The SBA loan program application processes are lengthy. With the help of an experienced SBA-approved lender to help your business through each step, the application package can be a smooth and efficient experience.
Interest Rates: Interest rates starting at 5.50%, treasury index plus 1% to 2.5%
Terms: 3 to 25 years
Fees: Origination fees 0% to 3%
Payments: Fixed monthly
Small Business Administration (SBA) Loan Program:
SBA Standard 7 (a) Loan Program- SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to small business with a good track record. Like the guaranty percentage and amount, the terms and conditions may vary by the type of loans to small businesses. Real estate may be used for collateral but is not required. Working capital needs are the #1 reason to borrow using this loan.
SBA Loan Program 504 for Charlotte, NC- The SBA 504 Loan is a powerful economic development loan program that will provide small businesses in Charlotte with another avenue for financing while promoting business economic development and job creation. The use of proceeds from SBA 504 Loans must be used for fixed assets such as construction, owner-occupied commercial real estate, mixed-use real estate and or land improvements (and certain soft costs), or can also be used to refinance existing debt. This product is great for business acquisition. Equal Housing Lender.
SBA Disaster Loan Program for Charlotte, NC- Economic Injury Disaster Loans (EIDL)- This type of SBA loan not only provides assistance to Charlotte, NC business owners after natural disasters like tornadoes, wildfires, or floods but when President Trump declared COVID -19 a nationwide health emergency based on the recommendation of the CDC on March 13th, congress provided small businesses access to this program for emergency financing.
(NEW) SBA Paycheck Protection Loan Program (PPP)- The SBA has established the SBA Paycheck Protection Program loan. This particular SBA loan provides loans to small businesses in the Charlotte, NC area affected by the COVID-19 crisis and needs financial help. Under the right conditions, this program offers forgiveness.
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Small Business Administration (SBA) Loans
8. Invoice Financing
Invoice financing advances the outstanding balance to a Charlotte business owner to increase cash flow speed to the business. This solution provides cash quickly, so there is no need to wait for outstanding invoices to be collected and received by the client with invoice financing in place. Invoice financing has affordable costs ranging from 1% to 2.5% in fees based on the face value of the invoice advanced. Invoice financing improves cash flow to Charlotte area businesses and helps level out working capital.
Terms: Not a traditional loan
Fees: 1% to 3% fee based on the invoice. Monthly Service fees may apply depending on the volume of invoices factored
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9. Purchase Order Financing
Purchase order financing offers businesses the ability to raise money to pay suppliers upfront for verified purchase orders. Purchase order loans will finance an entire order or a portion of it, depending on the purchase order funder. When the supplier is ready to ship the order, the purchase order financing company collects payment directly from the customer. The purchase order funder will subtract their fees and then sends the balance of the invoice. This is not a loan but an advance of a purchase order.
Interest Rates: None
Terms: Not a traditional loan
Fees: 1% to 3% fee for each purchase order. Monthly service fees depending on volume may also apply
Credit Profile: All parties need favorable business credit history, but all credit considered
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Purchase Order Financing
U.S. Small Business Administration
How to Grow Your Business in Charlotte, NC
View the North Carolina Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting.
Apply For Your AdvancePoint Loan Today!
Why Do Charlotte Small Business Owners Need Financing?
The list of the most common reasons small business owners use business financing.
- Working capital loans
- Equipment purchase and equipment repair
- Capital for inventory
- Business plan expansion (capital for growth)
- Capital for special projects
- Cash flow shortages
- Website development and website maintenance
- Provide capital for a business emergency
- Advertising and marketing to acquire customers
- Jobs creation (employees) and employee training resources and expenses
- Employee training resources and expenses
- Commercial real estate for business
Frequently Asked Questions from Small Business Owners in Charlotte, NC
Are business loans difficult to obtain in Charlotte, North Carolina? Are there a lot of business lenders?
It is not difficult to obtain business funding capital in Charlotte, NC. There are many business lenders and funder’s that service Charlotte metropolitan area. Choose your business finance specialist and business loans wisely.
Can applicants qualify for small business loans if they have bad credit? What credit score is needed to get a business loan?
There are many business lending options available for business owners with bad credit when looking for capital. Financing choices will vary depending on the risks associated with this type of funding and impact terms, pricing, and costs.
The internet can be an invaluable resource when searching for a business funding. In 2020, most businesses now search on the internet for business lending websites to glean additional information, find reviews on a business funder, and in many cases, inquire about getting more information and apply for a quote on a business finance company website. This allows businesses to shop, compare and potentially save significantly.
Are websites trustworthy? Well, about as reliable as visiting any business. You are not evaluating the website as much as you are the company and people you speak and communicate with. The website is merely the port of entry just as if you were walking into businesses on main street, without leaving the comfort of home. Both in-person and on website, its the same. The businesses you deal with must earn your trust by the way you are treated and the products and terms you are offered.
Can I get start-up business capital in Charlotte, North Carolina? Is it hard starting a business without capital or a business loan?
Getting start-up business loans can be extremely difficult and challenging. SBA loans are the most traditional option, but they are challenging to get approved for. A business owners search will need to include non-traditional means to raise money like private sources or investors.
Initiatives, Programs, Capital, and Small Business Grants in Charlotte, North Carolina for Small Business Owners: Additional Resources, Support, and Information about Small Business Loans in Charlotte
Mecklenburg County’s Small Business Loan Program- This loan program is designed to support non-standard lending features and help small business owners in Charlotte, Mecklenburg County, access capital. This program makes loans of up to $75,000 at accommodating rates and terms available to qualified small and start-up businesses in Charlotte, Mecklenburg County.
Charlotte Business Community Resources- Almost all businesses require some form of financing. Regardless of what stage you are in – whether you’re just getting started or are a seasoned business owner – with a good business plan and experience as well as personal or business equity and collateral, there are resources available that may be able to help with financing your business.
Carolina Small Business Development Fund (CSBDF)- Carolina Small Business Development Fund provides financing solutions and guidance to help entrepreneurs achieve their business goals. When small business succeed, everyone benefits. But starting and maintaining a successful small business isn’t easy. Within a complex small business landscape, the Carolina Small Business Development Fund provides the tools and guidance that allow entrepreneurs to achieve their dreams. If you are looking to start or expand your business, the Carolina Small Business Development Fund offers loans designed to meet your needs.
The City of Charlotte’s New “Open for Business” Initiative- offers access to COVID-19 specific programming to educate and empower Charlotte small entity owned businesses in the city.
Community Development Financial Institution (CDFI). Lends to start-ups and existing businesses across the state, emphasizing businesses that have difficulty accessing financing through traditional lending sources. Learn more about our core loan products.
City of Charlotte Open for Business- Open for Business is a City of Charlotte initiative supporting small business owners through their COVID-19 recovery. By providing access to capital and other resources to Charlotte’s small businesses, the program intends to help enterprises survive the pandemic’s recovery phase and prepare to thrive in a post-pandemic future. The initiative is supported by the City of Charlotte Small Business Community Recovery Task Force and Charlotte City Council Workforce and Development Committee.
Advice, Tips, and Pros and Cons for Charlotte Small Business Owners
When looking for funding for your business, businesses should always begin the process by understanding the purpose and use of the funds you are trying to acquire for your business. Do you know the obstacles that exist when getting approved (risk issues, business banking account cash flow, time in business, financial statement)?
Business lending is significantly different than consumer financing. Underwriting for business lending is much more risk-averse than consumer lending, so you need to take your time in looking through all the options that are available by lenders.
AdvancePoint Capital has the experience and been very successful in helping North Carolina businesses search for business lending solutions easily and painlessly without wasting time or, more importantly, your hard-earned money. Our customer service is legendary and you will not regret using AdvancePoint Capital as a resource.
As we always say, compare, shop, and you will always save your business money!