Small Business Loans Illinois

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Illinois has the fifth-largest gross domestic product (GDP) over 900 billion, the sixth-largest population, and the 25th largest land area of the United States. Illinois has been noted as a microcosm of the entire United States. With Chicago in northeastern Illinois, small industrial cities and immense agricultural productivity in the north and center of the state, and natural resources such as coal, timber, and petroleum in the south, Illinois has a diverse economic base and major transportation hub. The Port of Chicago connects the state to international ports via two main routes: from the Great Lakes, via the Saint Lawrence Seaway, to the Atlantic Ocean, and from the Great Lakes to the Mississippi River, via the Illinois River, through the Illinois Waterway. For decades, Chicago’s O’Hare International Airport has been ranked as one of the world’s busiest airports.

Illinois’ workforce and labor are diverse, including agriculture, manufacturing, financial services and markets, and energy such as petroleum, coal, nuclear power, wind, and biofuels. In the 21st century, most of the growth is fueled by service industries.

From an economic perspective, it may seem that businesses in Illinois have a lot going for them. However, small businesses still face an array of challenges getting small business loans. Traditional lending outlets often include banks or credit unions, but these typically have stringent guidelines, strict requirements, and mountains of paperwork for their limited loan options for small businesses. That’s where AdvancePoint can come in to help Illinois small business owners find the appropriate alternative lending option for their enterprise.

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How to Get Small Business Loans in Illinois?

AdvancePoint is an excellent resource for Illinois small business owners in search of funding. We offer an extensive marketplace of alternative loan options to help small businesses in Illinois fulfill their business needs. AdvancePoint Capital has a market place of small business loans specializing in industries across the state to service the small business community’s needs. Let’s explorer the ten most popular small business funding options in Illinois.

The 10 Best Small Business Financing Options in Illinois in 2020

1. Long Term Small Business Loans in Illinois

Long term small business loans are business loans with terms greater than two years’ length of repayment. The main benefits of long term small business loans are the length of repayment, the ability to access more capital than shorter-term business loans, affordable monthly payments, and to fund growth for the expansion of a small business or large long term projects.

Product Overview

Interest Rates: Interest rates starting treasury index plus 1% to 2.5% (currently 5.5% as of 2020)
Terms: 2 to 10 years
Fees: 0% to 3% origination fees
Payments: Monthly or bi-weekly payments
Credit Standards: All credit considered. Good to excellent credit preferred
Processing Times: 3 days to a couple of weeks depending on the lender

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Long-Term Business Loans

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2. Small Business Line of Credit in Illinois

A Small Business Line of Credit is an open revolving line of credit that allows business owners to draw funds when needed on-demand or make purchases up to a specific credit limit. Small business lines of credit require renewal to extend either on a semi-annual or annual basis. The most significant benefit of a small business line of credit over term loans is flexibility. The product allows for a draw of funds on-demand up to the credit limit.

Product Overview

Rates: Interest rates start at treasury index plus 1% to 2.5%
Terms: Open revolving line of credit
Fees: Origination fees 0% to 3%
Payments: Monthly, bi-weekly, or weekly payments
Credit Standards: All credit considered. Good to excellent credit preferred
Processing Times: Same day to up to a week depending on the lender

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Business Line of Credit

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3. (SBA) Small Business Administration Loans in Illinois

The Small Business Administration (SBA) office is a Federal agency that provides programs, guidelines, and loan guarantees to approved lenders for business loans. The Small Business Administration (SBA) is not a lender and merely provides a guarantee that gives approved lenders the ability to take on the risk of small business lending with attractive rates and terms that could not normally be afforded to small businesses. Without the Small Business Administration (SBA) guarantees, the approved lender would not be comfortable lending these loans under the terms outlined by the Small Business Administration (SBA). Through the Small Business Administration’s SBA 7(a) loan program and the SBA’s 504 programs, Illinois businesses raised over 200 million dollars in business loan volume to support their businesses. Due to the most recent COVID-19 crisis, the Small Business Administration (SBA) has developed a new program called the SBA Paycheck Protection Plan, a loan to help businesses affected by the crisis. SBA loans may be forgiven under certain circumstances. Contact customer service about SBA at AdvancePoint Capital for more information. AdvancePoint Capital can help guide your Illinois small business through the process in a clear, fast, and efficient manner to have the best likely hood of approval.

Product Overview

Rates: Rates starting at treasury index plus 1% to 2.5%
Terms: 3 to 25 years
Fees: Origination fees from 0% to 3%
Payments: Fixed monthly payments
Credit Standards: Good to excellent credit preferred, but all credit considered.
Processing Time: Processing times can be one week to up to a month, depending on application volumes, SBA loan selection, or other economic conditions.

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Small Business Administration (SBA) Loans

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4. Small Business Loans from Traditional Banks in Illinois

Traditional regional banks in Illinois are always a great option to consider if you qualify for a small business loan because they typically offer attractive rates and terms. Unfortunately, the requirements to obtain loans from one of these types of banks can be challenging. Expect high credit standards, lengthy paperwork requirements, and financial statements, time in business industry experience, and not to mention a lengthy application process. The terms and rates are worth it if you have the time and qualifications to get approved.

The following are popular regional traditional banks that act as Lender in Illinois:

  • First National Bank of Illinois
  • Illinois Bank & Trust
  • Amalgamated Bank of Chicago
  • International Bank of Chicago
  • First Financial Credit Union

5. Short Term Small Business Loans in Illinois

Short term small business loans are defined as loans, with terms from 3 to 18 months. Short-term small business loans charge a factor rate and not a principal & interest rate. This option is popular with small businesses that cannot get approved through traditional means because of documentation requirements or credit concerns.

Product Overview

Rates: Factor rates from 1.09% up to 1.45% of funding amount
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: Origination fees 0% to 5%
Payments: Weekly, bi-weekly, and in some cases daily Monday-Friday
Credit Standards: All credit types considered
Processing Times: Same day to 24 to 48 hours

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Short Term Business Loans

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6. Small Business Cash Advance in Illinois

Small business cash advances (BCAs), also known as a purchase of future sales agreement, advance future sales at a discount to the small business. BCAs charge a “factor rate,” which is a fixed cost and is the difference between the advance amount and payback amount. A fixed percentage of future overall sales deposits called the specified fixed percentage is used for repayment. The payments are collected by an ACH fixed daily or weekly payment deducted from a business bank account based on the specified percentage of future sales. Reconciliation can occur at the end of every month, and there is no term limit with advances. Business cash advances are not loans but an advance off of future sales of the business.

Product Overview

Rates: Factor rates from 1.09% up to 1.45%
Terms: No term limits. Payments are based on a specified fixed percentage collection method and are dependent on future sales
Fees: Origination fees from 0% to 5%
Payments: Weekly or daily Monday-Friday Fixed ACH payments
Credit Standards: Poor to excellent credit accepted. All credit considered.
Processing Time: Same day to 24 to 48 hours

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Business Cash Advance

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7. Merchant Cash Advance in Illinois

A Merchant Cash Advance (MCA) is also known as a Purchase of Future Sales Agreement that operates very similarly to a business cash advance. Still, the most significant difference is the repayment process, which is connected to the future credit card sales instead of overall sales. No fixed payment is deducted from the business bank account. The set percentage of future credit card sales payment method is used. Advances have no term limit and are connected to future credit card sales. Merchant cash advances are not loans but an advance off of future sales of the business.

Product Overview

Interest Rates: Factor rates 1.09% up to 1.45%
Terms: No term limits (payoff depends on future credit card sales)
Fees: Origination fees 0% to 3%
Payments: Fixed percentage of future credit card sales as payment
Credit Standards: All credit considered from poor, fair, good to excellent.
Processing Time: Same day to 24 to 48 hours

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Merchant Cash Advance

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8. Equipment Financing in Illinois

Equipment financing is an option that secures the equipment as collateral for purchase. Good to excellent credit is required, and the type of equipment needs to be approved by the equipment financing company to acquire equipment financing. Know cash out in addition to the purchase can be made.

Product Overview

Rates: Factor rates 1.09% up to 1.45% or interest rates 4.5%-28%
Terms: 2 to 10 years
Fees: Origination fees range from 0% to 3%
Payments: Monthly fixed payments
Credit Standards: Good to excellent required
Time Frames: Instant funding, same day up to 3 days depending on the lender

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Equipment Loans

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9. Invoice Financing in Illinois

Invoice financing allows small business owners to get an advance on their invoices to clients before their clients pay the invoice. Invoice finance companies advance to the business owner the invoice once an invoice is submitted to them in exchange for a nominal fee. The invoice finance company, not the business owner, is responsible for collections of the invoice advanced. This small business funding product is an excellent solution for cash flow crunches without waiting for 30, 60, up to 90 days or more for invoice terms to be paid by clients. Invoice financing is not a loan but an advance off of specific invoices.

Product Overview

Rates: None
Terms: No term limits because it is not a loan.
Fees: 1% to 2.5% fee based on invoice. Monthly service fees may apply depending on the volume of invoices factored
Credit Standards: Credit of the clients need to be favorable, NOT the business owner advancing off invoice
Processing Times: It takes 1 to 2 weeks to set up a new relationship to have the ability to fund invoices daily. Invoices are funded daily.

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Invoice Factoring

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10. Purchase Order Financing in Illinois

Purchase order financing allows small business owners to raise capital to pay suppliers upfront for verified purchase orders and collect invoices upfront on the back end. Purchase order financing will finance an entire order or a portion of it, depending on the purchase order finance company. 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 send the invoice’s balance to your business. They are used to support the entire distribution chain with capital, so the business owners don’t need to tap into existing cash flow and can’t take on larger orders and projects without raising traditional capital. Purchase order financing is not a loan.

Product Overview

Rates: None
Terms: No term limits because it is not a loan.
Fees: 1% to 3% fee for each purchase order.
Credit Standards: All parties need favorable business credit history, but all credit considered
Processing Times: 1 to 2 weeks to set up then ability to fund purchase orders daily

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Purchase Order Financing

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U.S. Small Business Administration

How to Grow Your Business in Illinois
View the Illinois Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting.

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Why Does Your Illinois Business Need a Business Loan?

The most common reasons Illinois small businesses acquire capital for their business:

  • Loan for Working Capital-General purpose cash flow needs of a small business
  • Loan for Business Expansion-Funds business opportunities to expand business or take advantage of business opportunities that require upfront capital.
  • Loan for Equipment Purchases- The purchase of equipment essential to a small business’s process and/or workflow.
  • Loan for Advertising/Marketing costs-Money to implement marketing strategies and methods to increase customer base and add customers continuously.
  • Loan for Emergencies-Money for the unexpected. There will always be issues in running a small business that can arise without notice.

Frequently Asked Questions

It is not difficult to obtain a small business loan in Illinois. There are many online and local small business loans available to Illinois small businesses.

The type of business financing product you choose will dictate what documents. You may expect as little as an application and bank statements and as much as financial statements like tax returns, profit & loss, balance sheet, and a list of assets and debts.

Illinois small business does not have any unique challenges to operate a business. 2. The easiest business loan to get may not be the best one; consult your business financial advisor to determine if “easy” means it will cost you in rate and term!

Illinois small businesses turn to the Small Business Administration SBA loan for help when it comes to pre-revenue stage small businesses.

Despite bad credit, there are many business financing alternatives available for Illinois small businesses. Small Business loan terms will vary depending on the product and are linked with risk, so expect terms, pricing, and costs to be impacted if you have bad credit.

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

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The Bottom Line: Advice, Tips, Information, and Warnings About Business Loans in Illinois

Illinois Department of Commerce & Economic Opportunity (DCEO) – Illinois Small Business Emergency Loan Fund— Illinois Department of Financial and Professional Regulation (IDFPR) established the Illinois Small Business Emergency Loan Fund to offer small businesses low-interest loans of up to $50,000 for working capital, with at least 50% of loans proceeds to be applied toward payroll or other eligible compensation including salaries, wages, tips, paid leave, and group healthcare benefits.

Illinois Department of Commerce & Economic Opportunity (DCEO)- Loans and Financing Options— Access to capital and locating funding are often the most difficult tasks for any company seeking to develop their products and services and grow their company. The Illinois Department of Commerce can work with your small business to identify and secure financing opportunities and build a financial support network that will meet your present needs and prepare you for future growth.

Coronavirus 2019 (COVID-19) Relief Information and Help for Small Business— DCEO is working diligently to secure access to helpful resources for small businesses throughout the State of Illinois and has compiled these links regarding COVID 19 resources for small businesses to help through a difficult time.

COVID-19 relief Related Financial Assistance for Small Businesses (financial help)

Illinois State Treasurer Small Business COVID-19 Relief Program— The Business Invest – Illinois Small Business COVID-19 Relief Program (“Program”) is an impact investment loan program under which the State Treasurer has made up to $500 million in deposits available to banks and credit unions throughout the state, at near-zero rates, to assist Illinois small business and non-profits negatively affected by the COVID-19 pandemic.

Chicago Community COVID-19 Relief Response Fund— On March 16, The Chicago Community Trust (CCT) and United Way of Metro Chicago launched the Chicago Community COVID-19 Relief Response Fund. The organizations saw the need for rapid relief help in Chicago and shared a desire to support nonprofits on the front lines. United Way and CCT, with the support and assistance of the city of Chicago, quickly created the fund as a means for the philanthropic community, corporations, and individuals across the Chicago region to support and help their neighbors in need.

A Better Chicago-Emergency Relief Fund— COVID-19 relief and help in Chicago to provide lifesaving support where it is needed most. The Chicago Emergency Relief Fund provides immediate assistance and financial support to the nonprofits working on Chicago’s frontlines during the COVID-19 pandemic.

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