Over 6 million people live in the Mid-Atlantic state of Maryland, situated along the United States’ eastern coast. The state’s largest city is Baltimore, but its capital is located in Annapolis. Maryland is bordered by a few other states, including Pennsylvania, Virginia, and nearby Washington, D.C.
Maryland’s diverse economy includes industries such as defense, aerospace, healthcare, biomedical research, and several higher education facilities. Johns Hopkins University and its medical research facilities are the largest employers in Baltimore, MD. Other industries supporting the state’s economy are federal government agencies, manufacturing, agriculture, fishing, biotechnology, tourism, and healthcare. The Bureau of Economic Analysis estimates that Maryland’s gross state product in 2020 is well over $350 billion.
Maryland small businesses still face an abundance of challenges obtaining business loans from conventional lenders like banks or credit unions. These types of traditional lenders have strict guidelines and credit requirements, ask for an immense amount of paperwork, and have incredibly limited offerings for small businesses. That’s where AdvancePoint Capital can help; we have a wide array of financing options available to help entrepreneurs that credit unions or banks do not offer.
How To Get a Small Business Loan in Maryland?
AdvancePoint Capital has a business lending marketplace full of an array of alternative business loans, resources, and lending partners for Maryland entrepreneurs to help your business grow.
The 10 Best Small Business Loan Options for Maryland Small Businesses
1. Long-Term Business Loans for Maryland Small Businesses
Lenders define long term small business loans as small business loans with a duration of greater than two years. Businesses are offered a fixed amount of upfront and charged principal & interest. Unlike a business line of credit, a business owner cannot draw money as you go with long term loans. Typically, long term loans are a great solution for business expansion and growth or help your business finance large projects.
Long Term Business Loans Product Overview
Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
Term: 2 to 10 years
Fees: Origination fees range from 0% to 3% (depends on risk and lender)
Loan Payments: Monthly or bi-weekly
Credit Score Standards: Good to excellent preferred. All types considered.
2. Business Line of Credit for Maryland Small Businesses
A business line of credit is an open revolving line of credit. This type of funding allows businesses to draw funds when needed on-demand or make purchases—a business line charges a principal & interest rate. Business lines of credit do have a credit limit that cannot be exceeded without a lenders approval and is not open-ended forever and require renewal by lenders either semi-annually or annually to be extended.
Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5%
Term: Open revolving line of credit
Fees: Origination fees ranging from 0% to 3% (depends on risk and lender)
Payment: Monthly, bi-weekly, or weekly
Credit Score Standards: Good to excellent preferred, but all types considered
3. Short Term Small Business Loans for Maryland Small Business
Short term business loans are defined as loans typically repaid within 6 to 18 months. These loans feature a lump sum offered upfront with a fixed payback amount calculated using a factor over a short term of time. Rates are not principal & interest but a “factor rate” that costs more than traditional loans. Most businesses choose short term business loans when they do not qualify for traditional business loans. Short term loans charge more for costs and are shorter in the duration of repayment, and the payments are more frequent to compensate for the higher risks business lenders take in offering this product. These loans are popular resource for small businesses because of the reduced documentation requirements and credit tolerances that are laxer than traditional loans.
Short Term Small Business Loans Overview
Interest Rates: Factor rates range from 1.09% up to 1.45%
Term: 6 to 18 months in duration (typically 12 months or less)
Fees: 0% to 5% origination fees (depends on lender and risk)
Payments: Weekly, bi-weekly, and in some cases daily Monday-Friday
Credit Standards: All types considered
4. Business Cash Advance for Maryland Small Business
Business Cash Advances (BCAs) are also known as the purchase of future sales agreement, which advances future sales at a discount to a business. The business is responsible for paying back a fixed payback amount 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. This is not principal & 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 business 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, 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. You do not need to provide a business plan. The most popular use for a business cash advance is working capital to help your business.
Rates: Ranges from 1.09% up to 1.45%
Term: 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 Standards: Poor to excellent accepted. All types considered
5. Merchant Cash Advance for Maryland Small Businesses
A Merchant Cash Advance (MCA) is also known as a Purchase of Future Sales Agreement that 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. MCA’s take a set percentage of future credit card sales at the time of batch of credit cards until the advance is paid back in full. Businesses find this valuable when their revenue fluctuates, and they don’t want to lock into a fixed payment that could negatively impact cash flow or profit margins if revenues decline or change. This product is another excellent resource for working capital to help your business.
Rates: Range from 1.09% up to 1.45%
Term: No time limits (payoff depends on future credit card sales)
Fees: Origination fees range from 0% to 3%
Payment: Set fixed percentage of future credit card revenues
Credit Standards: All types considered from poor, fair, good, or excellent
6. Equipment Loans and Financing for Maryland Small Businesses
Maryland area businesses that use equipment to operate their business often opt for equipment financing. This type of lending uses the machinery itself as collateral in case of repayment failure. Small business owners must have very good to excellent credit, but the good news is little paperwork is necessary to get approved.
Rate: Range from 1.09% up to 1.45%
Term: 2 to 7 years
Fees: Origination fees range from 0% to 3%
Payment: Weekly or daily Monday-Friday fixed ACH
Credit Standards: All types considered (Lenders vary on credit score requirements)
7. Small Business Administration (SBA) Loans for Businesses in Maryland
The Small Business Administration (SBA) is a federal government agency that provides programs, guidelines, and loan guarantees to approved SBA Lenders to issue business loans to small businesses. The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, and grow their businesses successfully. The SBA is not a lender. The Small Business Administration provides a guarantee, giving approved lenders the ability to make credit decisions under Small Business Administration (SBA) terms. SBA loans allow lenders to take on risks that they would not ordinarily do so independently and have rights reserved for any recourse need. Small Business Administration (SBA) loans are highly sought after by Maryland small businesses, and there are many government-approved lenders to choose from. It can be common for an SBA loan to require a business plan. SBA application processes can be lengthy, but with the help of an experienced SBA-approved lender to help your business through, the application process can be a smooth and efficient experience.
Interest Rates: Starting at 5.50%, treasury index plus 1% to 2.5%
Term: 3 to 25 years
Fees: Origination fees 0% to 3%
Payment: Fixed monthly
Credit Standards: Good to excellent preferred, but all credit considered (all rights reserved)
Small Business Administration (SBA) Government Lending Programs for Small Businesses
Small Business Administration Website Resource: https://www.sba.gov/business-guide/grow-your-business/get-more-funding
SBA Standard 7 (a) loan program- SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to small businesses with a good track record. The terms and conditions, like the guaranty percentage and loan amount, may vary by the type of loans to small businesses. Real estate may be used for collateral, but is not required.
SBA Loan Program 504- The SBA 504 Loan is a powerful economic development loan program that will provide small businesses another avenue for business 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.
SBA Disaster Loans– Economic Injury Disaster Loans (EIDL)-This type of SBA loan not only provides assistance 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.
SBA Paycheck Protection Program (PPP) loan-The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan. This SBA loan provides loans to small businesses affected by the COVID-19 crisis and needs financial help. Under the right conditions, this loan program offers forgiveness.
U.S. Small Business Administration Baltimore District Office in Maryland website
U.S. Small Business Administration
Small Business Resource Guide: Grow your Business in Maryland
View the Maryland Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting.
8. Invoice Financing for Maryland Small Businesses
Invoice financing advances the outstanding balance to a business owner to increase the speed of cash flow to the business. This solution provides cash quickly, and 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% fee off of the face value of the invoice advanced.
Term: Not a traditional loan
Fees: 1% to 3% fee based on invoice. Monthly service fees may apply depending on the volume of invoices factored
Credit Standards: Client credit must be favorable, NOT the owner advancing off invoices
9. Purchase Order Financing for Maryland Small Businesses
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 send the invoice balance to your business.
Interest Rates: None
Term: 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
10. Business Credit Cards for Maryland Business Owners
Business credit cards are open revolving credit lines that charge a principal & interest rate with a limit. Business credit cards are issued to be used for making payments or purchases. Maryland businesses utilize business credit cards in conjunction with other small business funding resources. The primary use of funds for this financial product is to purchase small items or working capital to help your business.
Interest Rates: Introductory interest rates starting at 0% up to 28.99% principal & interest
Term: Open revolving line with a limit
Fees: $0 to $500 annual fees
Payment: Flexible monthly
Credit Standards: Must have good to excellent credit and deep history
The fast, convenient, and straightforward way to get the money you need for your Maryland small business – now! Get Your Business a Quote Today by filling out our simple form.
Why Do Maryland Small Business Owners Need Funding?
The list of the most common reasons small business owners use business funds.
- Working Capital loans
- Equipment Purchase and Repair
- Business Plan Expansion (capital for growth)
- Special Projects
- Cash Flow shortages
- Website development and Website Maintenance
- Emergency Resources
- Advertising and Marketing to acquire customers
- Jobs Creation (Employees ) Employee training resources and expenses
Frequently Asked Questions from Maryland Entrepreneurs
Are Business Loans difficult to obtain in Maryland? Are there a lot of business lenders? Is it hard to find a business lender?
It is not difficult to obtain business funding in Maryland. There are many business lenders and funder’s that service Maryland entrepreneurs. Choose your lender and business loans wisely.
Can Maryland entrepreneurs apply for business loans using an online business funding website? Is it trustworthy?
The internet can be an invaluable resource when searching for a business lender. In 2020 Maryland, most businesses now search on the internet for business lending websites to glean additional information, find reviews on a business lender, and in many cases, inquire about getting more details and apply for a quote on a business lender website. This allows businesses to shop, compare, and potentially save significantly.
Are websites trustworthy? Well, about as trustworthy as visiting any business in person. 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 your home—both in person and on a website, its the same. The businesses you deal with must earn your trust by how you are treated and the products and terms offered.
Can Maryland applicants qualify for Small Business Loans if they have bad credit?
There are many business lending options available for business owners with bad credit. Business funding options will vary depending on the risks associated with this type of funding and impact terms, pricing, and costs. The business loan amount may also be limited due to bad credit as well.
Can I get Business Funding in Maryland with No-Docs?
Business Credit cards are the only true no documentation product. Other products have less or reduced documentation requirements you may want to consider because the less documentation you provide, the less favorable options will be available.
Can I get a Start-up Business loan in the State of Maryland? Is it hard starting a business in State of Maryland?
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 Maryland business owner’s search will need to include non-traditional means to raise money like private sources or investors.
Initiatives, Programs, and Small Business Grants in the State of Maryland for Small Businesses. Additional Resources, Support and Information About Small Business Loans.
Maryland Business Resources and Funding Programs – Review Available Finance Programs, Find Benefits for Small, Minority and Women-Owned Businesses, and Benefits for Veteran-Owned Businesses in Maryland.
Maryland Business Express Resources: Find Funding for Small, Minority & Women-Owned Businesses – Information and resources for small, minority & women-owned businesses.
State of Maryland Department of Commerce – Offers various resources, information, programs and financial incentives such as Grant’s, Tax Credit’s, Loans, Training, Services, Bond, Contract Finance, Investment, Loan Guarantee and Venture Capital.
Maryland Capital Enterprises Inc. – Maryland Capital Enterprises, Inc. empowers businesses to grow, provide resources, create jobs, and generate wealth on Maryland’s Eastern Shore and across the State. Maryland Capital Enterprises, Inc. (MCE) has sought, and received, both public and private sources of funding such as State Agencies, Federal Agencies, donations, and foundation support since its inception in March of 1998. Several funding sources have provided repeat funding. Received funding is leveraged through technical assistance and other in-kind donations provided by the many cooperative partnerships Maryland Capital Enterprises, Inc. has forged in the public and private arenas. A growing portion of funding comes from fees and interest earned.
TEDCO – provides entrepreneurial business assistance, resources and seed funding for the development of startup companies in Maryland through various programs. Explore TEDCO programs here.
Advice, Tips, and Pros and Cons for Maryland Small Business Owners
When looking for funding resources for your Maryland business, businesses should always begin the process with what is 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? (Credit 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 Maryland 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!
How To Apply for Business Loans in Maryland?
Applying for a business loan with AdvancePoint Capital is a simple, easy, and streamlined application process with decisions in hours, not days. Start with this online form (don’t forget your email), then fill out the short application page, wait a few hours for your approval, and then get your funding! Or you can call toll free phone number and speak to a loan agent. See the benefits of working with AdvancePoint and take the first steps in the business loan process so that you can make informed decisions.