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Detroit Small Business Loans

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For many entrepreneurs in the motor city of Detroit, access to capital and resources for their business is necessary. To receive the business funding needed to keep their business objectives on track, small businesses need loan solutions they can trust. AdvancePoint Capital offers small business loans and short term cash flow options that keep operations afloat and help you meet your goals.

Despite Detroit’s economic strengths, entrepreneurs still face many challenges in getting business loans from traditional banks, small business lenders, and credit unions. They have stringent guidelines, requirements, mountains of paperwork, and limited loans to offer to business customers.

It’s tough to get anything from a bank or lender. AdvancePoint Capital offers various business financing options to help small business owners in Detroit meet their needs.

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Getting Approved for Small Business Loans in Detroit: First Steps

AdvancePoint is an excellent resource for business owners. We have a marketplace full of alternative funding options for small businesses. Experience our customer service and unleash the business services, network of lenders, and relationships we have at our disposal.

Our resources give you access to the best products, rates, and terms that meet your business needs. When it comes to accessing capital and obtaining business loans, AdvancePoint Capital is second to none. Contact us and speak to a business representative today.

The 8 Best Small Business Loan Options for Detroit, Michigan

Long-Term Small Business Loans for Small Businesses in Detroit, Michigan

long term business loan is defined as a term loan with a duration greater than two years. Businesses are offered a fixed amount of capital upfront and charged principal and interest. Unlike a business line of credit, a business owner cannot draw money as they go with long term loans.

Typically, a long term small business loan is an excellent business funding tool used for large capital needs like business expansion and growth. Business assets may be required for collateral.

Business Funding Product Overview

  • Loan Amounts: Loan amounts up to $5,000,000
  • Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
  • Loan Terms: 2 to 10 years
  • Fees: Origination fees range from 0% to 3% (depends on risk and lender)
  • Loan Payments: Monthly or bi-weekly
  • Borrower Credit Requirements: Good to excellent credit score required

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Long-Term Business Loans

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Business Lines of Credit for Small Businesses in Detroit, Michigan

A business line of credit is an open revolving line. This type of funding allows businesses to draw funds when needed on-demand or make purchases– a line of credit charges principal and interest. Business lines of credit have a limit that cannot be exceeded without a lender’s approval and is not open-ended forever. To be extended, renewal is required by lenders either semi-annually or annually.

The primary reason small business owners choose a line of credit instead of a term loan is the draw feature, affordable rates, and flexible terms. This product is popular with businesses that need working capital and need a fast way to get funds. This funding option is not a loan.

Business Funding Product Overview 

  • Credit Limit: Up to $250,000
  • Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
  • Repayment Terms: Open revolving lines of credit
  • Fees: Origination fees ranging from 0% to 3%
  • Payment: Monthly, bi-weekly or weekly
  • Borrower Credit Scores: Fair to excellent credit score required

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Business Line of Credit

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Short Term Small Business Loans for Small Businesses in Detroit, Michigan

Short term business loans are defined as loans that are typically repaid within 6 to 18 months. These loans feature a lump sum offered up front with a fixed payback amount calculated using a factor over a short term of time. Rates are not principal and interest but a “factor rate” that costs more than traditional loans.

Most businesses choose short term loans when they do not qualify for traditional loans. Short term loans charge more for costs and are shorter in duration of repayment, and the payments are more frequent to compensate for the higher risks lenders take in offering this product. These loans are a popular resource for businesses because of reduced documentation and more relaxed tolerances than traditional loans. Working capital is the main reason for acquiring funding resources for short term loans.

Business Funding Product Overview

  • Loan Amounts: Up to $500,000
  • Interest Rate: Factors range from 1.09% up to 1.45% or simple interest starts at 1% per month
  • Loan 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
  • Borrower Credit Scores: All credit types considered

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Short Term Business Loans

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Business Cash Advance for Small Businesses in Detroit, Michigan

A Business Cash Advance (BCA), also known as the Purchase of Future Sales Agreement, advances future sales at a discount to a business. 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. This 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 and interest costs. The advance is repaid 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 account monthly are more than the set future percentage of monthly sales, the business can request a refund for overpayment so that the set specified percentage of sales collected matches the revenue volumes. Repayment continues until the amount is paid in full.

There is no time limit with advances as the fixed payback percentage ever changes due to fluctuating revenue. This product is popular with businesses that can not get a traditional loan, need working capital, and need funds quickly. This financing option is not a loan. This business funding is a standard tool for entrepreneurs in service industry businesses like restaurants.

Business Funding Product Overview

  • Factor Rates: Ranges from 1.09% up to 1.45%
  • Repayment Terms: This is not a loan so there are no time limits. Payments continue until paid in full based on specified percentage collection method and are dependent on future revenues
  • Fees: Origination fees that range 0% to 5%
  • Payment: Weekly or daily Monday-Friday fixed ACH
  • Credit Scores: All types of credit considered

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Business Cash Advance

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Merchant Cash Advance for Small Businesses in Detroit, Michigan

A Merchant Cash Advance (MCA), also known as a Purchase of Future Sales Agreement, operates very similarly to a BCAs. The most significant difference is the repayment process, which is connected to future credit card revenues 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. Businesses find this valuable when their revenues fluctuate. They don’t want to be locked into a fixed payment that could negatively impact cash flow or profit margins if revenues decline or fluctuate.

This product is another great resource for working capital needs. Remember, 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 money for the business now. This product is popular with entrepreneurs that can not get a traditional loan and need working capital. This financing option is not a loan.

Business Funding Product Overview

  • Rate: Range from 1.09% up to 1.45%
  • Repayment Term: No time limits
  • Fees: Origination fees range from 0% to 3%
  • Payment: Set fixed percentage of future card revenues
  • Borrower Credit Scores: All types of credit considered

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Merchant Cash Advance

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Equipment Financing for Small Businesses in Detroit, Michigan

Detroit businesses that require equipment to operate their business often turn to equipment financing for equipment purchases. Equipment financing secures the equipment itself as collateral. Limited paperwork is necessary to be approved.

Equipment financing is fast and easy to apply for and can be approved on the spot. Equipment financing is most popular for industries that rely heavily on equipment resources like manufacturing and construction.

Funding Product Overview

  • Rates: Range from 1.09% up to 1.45%
  • Repayment Terms: 2 to 7 years
  • Fees: Origination fees range from 0% to 3%
  • Payment: Weekly or daily Monday-Friday fixed ACH
  • Credit Scores: Fair to excellent credit score required
  • Application Process: One-page loan application, equipment invoice

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Equipment Loans

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U. S. Small Business Administration – SBA Small Business Loans for Small Businesses in Detroit, Michigan

The U. S. Small Business Administration (SBA) is a Federal government agency headquartered in Washington DC. It provides resources, programs, guidelines, and small business loan guarantees to approved SBA Lenders to issue small business loans. The SBA’s mission is to help American enterprises successfully start, build, and grow their businesses.

The SBA is not a lender. It provides a guarantee that gives the approved SBA lender the ability to take on the risk of lending and decisions under SBA term’s that they would not ordinarily do independently and has all rights reserved for any recourse need. The SBA loan application process can be lengthy, but an experienced SBA-approved lender can help your business smoothly navigate the process.

Funding Product Overview

  • Loan Amount Limits: Up to 5 million
  • Interest Rates: Starting at 3.50%, treasury index plus 1% to 2.5%
  • Loan Terms: 3 to 25 years
  • Fees: Origination fees 0% to 3%
  • Payments: Fixed monthly
  • Credit: Good to excellent credit score required
  • Application Process: SBA loan application, business assets, and numerous financial statements

Small Business Administration Business Small Business Loan Options

U.S. Small Business Administration Sba Standard 7 (a) Small Business Loan Program – SBA loan 7(a) is the SBA’s program designed to provide financial assistance to businesses with a good track record. This product is a business term loan. Like the guaranty percentage and amount, the rate, terms, and conditions may vary by the type of loan to a business. Real estate may be used for collateral but is not required. The loan can amount to 5 million. This is an excellent loan for entrepreneurs looking to grow their business.

U.S. Small Business Administration SBA 504– The SBA 504 Loan is a small business term loan and a powerful economic development loan program. It provides businesses another avenue for business loans while promoting business economic development and equity. Typically for large capital requirements, the use of SBA 504 Loans proceeds must be used for fixed assets such as construction, owner-occupied commercial real estate, mixed-use real estate, or land improvements (and certain soft costs). It can also be used to refinance existing debt on your small business. Real Estate may be required for collateral.

U.S. Small Business Administration Sba Disaster Small Business Loans Program – SBA Economic Injury Disaster Loans (EIDL)-This type of SBA loan assists Detroit small businesses after natural disasters like tornadoes, wildfires, or floods. However, COVID -19 was declared a nationwide health emergency, congress provided small businesses access to relief options like this SBA loan for emergency funding. This SBA loan was designed for small businesses to retain employees and other expenses to stabilize the business during the COVID-19 pandemic.

U.S. Small Business Administration SBA Paycheck Protection Program (PPP) – The SBA has established the SBA Paycheck Protection Program loan in response to COVID-19. This is one of SBA’s relief options that provides small business loans to small businesses in Detroit affected by the COVID-19 crisis and needs financial help. Under the right conditions, this SBA loan offers forgiveness. This SBA loan was designed for businesses to retain employees and protect jobs during the COVID-19 pandemic. Real estate is not required to get funding for businesses.

Small Business Administration (SBA) Additional Information, Resources, and Updates for Small Businesses in Detroit, Michigan.

U.S. Small Business Administration SBA Learning Center – Financing Your Business

Assess your financing and working capital needs and discover SBA financing options for your business.

U.S. Small Business Administration SBA Grants Programs and Eligibility

Learn about available SBA Loans, grants, and cooperative agreements to find out if you meet the SBA requirements to apply.

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Small Business Administration (SBA) Loans

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Invoice Financing for Small Businesses in Detroit, Michigan

Invoice financing advances the outstanding balance owed to a small business to increase its cash flow speed. This solution provides cash quickly. There is no need to wait for unpaid invoices to be collected and received by the client with invoice financing.

Invoice financing has affordable costs ranging from 1% to 2.5% fee off of the face value of the invoice advanced. This product is typical for the manufacturing industry. This financing option is not a loan.

Business Funding Product Overview

  • Interest Rate: None
  • Repayment Terms: Not a traditional loan
  • Fees: 1% to 3% fee based on invoice. Monthly service fees may apply depending on the volume of invoices factored
  • Borrower Credit Requirements: Credit score of the business owner does not matter

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Invoice Factoring

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U.S. Small Business Administration

Start, Grow, and Expand your Business
View the Michigan Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting in Michigan.

The fast, convenient, and straightforward way to get the money you need for your small business – now!

Get your quote today by filling out our simple form.

The Most Common Use of Loan Proceeds From Business Loans for Detroit, MI Small Business

  • Working capital
  • Equipment purchases and repair
  • Inventory growth
  • New business opportunity
  • Business development & growth
  • Cash flow
  • Repair facilities
  • Emergencies business expenses
  • Advertising/marketing/customer acquisition goals
  • Create jobs, employee recruitment and training resources
  • General business needs and expenses

Frequently Asked Questions Related to Business Funding in Detroit, MI

The decision and loan approval usually takes a couple of weeks to a month, so be prepared. Feel free to contact AdvancePoint Capital a speak to a business representative for eligibility requirements or any other questions about SBA loans.

It is not difficult to obtain business loans in Detroit, MI, as there are many business lenders and funder’s available that service the greater Detroit area.

The internet can be an invaluable resource when searching for a business lender. Most businesses now search the internet for business lending websites to find reviews on a business lender, ask for more information, and apply for a quote on a business lender website. This allows businesses to shop, compare, and potentially save significantly. 

Are websites reliable? Well, they are as trustworthy as visiting any Detroit small business. You are not evaluating the website as much as you are the company and people you communicate with. The website is merely the port of entry without leaving the comfort of your home. Both in-person in Detroit or on a website, it’s the same. The businesses you deal with must earn your trust by treating you well, providing outstanding customer service, and offering products and terms to meet your business’s needs.

There are many business lending options available for small business owners with bad credit in Detroit. Credit scores can be lower than 500, but financing options will vary depending on the risks associated with this type of funding and impact terms, pricing, and costs. Contact us for business funding options to consider. 

Unfortunately, AdvancePoint Capital does not offer startup business loans at this time. The small business must be generating revenue for at least 6 months.

Initiatives, Information, State and Federal Government Funding Sources, Programs, Grants, Coronavirus (Covid-19) Relief Options, Business Resources and News, Events & Updates in Detroit for Small Business. Stay Informed!

Detroit Development Fund

Detroit Development Fund, a community development financial institution based in Detroit, received approval for a $1 million loan from MICHIGAN ECONOMIC DEVELOPMENT CORPORATION COV-19 RELIEF FUND (MSF) to make micro and small business loans ranging from $5,000 to $250,000 to small businesses in the greater Detroit area, emphasizing businesses located in economically disadvantaged areas. This COVID 19 relief fund program was created to assist those local businesses most impacted by the COVID-19 virus. Businesses can use these loans primarily for working capital, acquiring machinery and equipment, and inventory.

DDF anticipates it will provide loans to businesses that require patient, flexible working capital to re-open or re-establish operations following the relaxation of the stay-at-home orders, mandated closures, and other public health restrictions. DDF is now accepting applications for the MEDC COVID-19 Relief Fund from businesses impacted by COVID-19. Businesses interested in applying for a loan should contact us by phone at (313) 784-9623, or by email at vholsey@detroitdevelopmentfund.com

Detroit Development Fund- Small Business Loans

Detroit Development Fund is a non-profit (501(c)(3)) organization and a certified community development finance institution, incorporated in the state of Michigan. Detroit Development Fund was created in 1998 with an initial mission of helping revitalize an economically distressed target area in Detroit’s far Eastside neighborhoods. It now operates throughout the City of Detroit. Detroit Development Fund provides loans and technical assistance to small business owners, developers, building owners, contractors, and subcontractors who cannot get all of the capital they need from traditional financing sources. Detroit Development Fund delivers its products and services to revitalize businesses and neighborhoods in Detroit, Michigan, creating economic equity and promoting a healthy environment.

Detroit Community Loan Fund 

Detroit Community Loan Fund (DCLF) is a Community Development Finance Institution (CDFI) and low-profit limited liability company (L3C), created by Detroit Development Fund and Invest Detroit. Detroit Community Loan Fund (DCFL) finance small businesses headquartered in Detroit, which have traditionally faced obstacles in obtaining financing but have demonstrated growth potential.

Detroit Community Loan Fund (DCFL) goal is to increase economic activity and strengthen the viability of small businesses in Detroit, where small businesses provide a strong commitment for community and neighborhood development and are the basis for sustainable growth. We understand that it takes adequate capital to grow a successful business. Detroit Community Loan Fund (DCFL) customers are small businesses in their initial stage of development – businesses that have the potential to flourish and expand when given the right tools and support.

The purpose of the Detroit Community Loan Fund (DCLF) and Detroit Development’s small business lending program has been to support Detroit-based business growth, particularly those owned by entrepreneurs of color and women. It targets small businesses with growth potential and management insight that lack sufficient collateral or owner equity to qualify for financing from mainstream lenders.

ProsperUs Detroit Funding 

ProsperUs Detroit offers entrepreneurs resources to find lenders, crowdfunding sources, and businesses that assist with funding to help them get the capital needed to create and maintain a successful business. Lenders include ProsperUs Detroit Micro-Lending Program, Michigan Women Foundation, CEED Lending, Detroit Economic Growth Corporation (DEGC), Invest Detroit, Opportunity Resource Fund, and Detroit Development Fund.

Need Help Applying For an SBA Loan?

The City of Detroit Can Help

Mayor Mike Duggan and Goldman Sachs CEO David Solomon announced that Goldman Sachs committed $15 million as part of its 10,000 Small Businesses initiative to loans for small businesses in Detroit to help them through the COVID-19 crisis. The effort is in partnership with Community Reinvestment Fund (CRF), the largest non-profit, non-bank SBA 7(a) lender in the country. This is a COVID-19 relief fund.

COVID-19 Business Support and Resources

Detroit’s hub for all the news, events, resources, and information your business needs during the COVID-19 crisis. On this page, you will find training, loan/grant applications, and opportunities to improve your business’s visibility and viability online.

Detroit Regional Chamber – COVID-19 Business Restart Center – Small Business Resources

As small business owners begin to feel the impact of COVID-19, the Detroit Regional Chamber is dedicated to providing the most up-to-date news, events, and resources from reliable organizations to help manage the fallout from the crisis.

Detroit Regional Chamber COVID-19
Business Resource Center COVID-19 –
 Financial Resources for Small Business impacted by COVID-19

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