The Growth Capital team is elated by the news that once again, Ohio entrepreneurs have launched record numbers of small businesses. Last month, the Ohio Secretary of State reported that March’s new business filings were up 47% over March 2020 and set a new record for filings in a single month!
The good news comes even as the Growth Capital team is helping small businesses obtain COVID-19 relief financing and access to other small business resources dedicated to helping those affected by the pandemic.
At the same time, the team is monitoring the economic landscape and small business recovery. At Growth Capital, we help customers ranging from new businesses to experienced entrepreneurs obtain small business loans to help them turn their business dreams into reality.
Based on our experience working with customers, launching a new business is just the first step toward small business success. The U.S. Bureau of Labor Statistics shows that 20% of small businesses fail within the first year and that nearly half fail within five years.
There are several reasons that a small business might fail—and SCORE singles out cash flow as the primary cause. That’s why new small businesses are well served to have a long-term financing strategy in place before hanging out an “Open for Business” sign.
Small Business Loans
There is no one-size-fits-all when it comes to financing small businesses. Those that are newly launched and those that are established have different needs and different borrowing opportunities.
Loans for New Businesses
At Growth Capital, we often recommend that new ventures consider Small Business Administration (SBA) 504 and Community Advantage loans.
Qualified small businesses can use 504 loans to buy fixed assets to establish, update, or expand their facilities. For example, they could buy commercial land or space or long-term equipment. Our fact sheet has all the details.
The Community Advantage Loan Program is another option for new small businesses. This program is particularly helpful for new businesses operating in underserved communities. Businesses that have been operating for two years or less and that haven’t qualified for other loans are eligible to apply for Community Advantage loans.
Eligible companies can borrow as much as $250,000 to buy new buildings, machinery, and equipment, to expand facilities, or to refinance debt.
The SBA does require startups to meet some basic requirements, such as having an adequate amount of owner equity, having exhausted all means of funding, and demonstrating a reasonable need for the loan.
Small Business Resources
There’s more to opening a small business than setting up shop. Obtaining a new business filing is just the first of 10 steps recommended by the Ohio Secretary of State.
The SBA’s more detailed program encourages prospective small business owners to complete market research and business plans before taking any other steps.
Ohio-based small businesses can also tap the statewide network of Small Business Development Centers of Ohio (SBDC). The centers offer a wide range of information and access to business advisers who provide one-on-one, confidential counseling at no cost.
The Growth Capital team has years of experience helping small businesses launch and grow. We understand the challenges that small businesses face, and we constantly seek solutions for those challenges. For all those new Ohio businesses, here’s to many years of success!
At Growth Capital, we know small business success relies on insight and support. We’re always available to share resources. To contact the Growth Capital team, call (216) 592-2332 or fill out our online contact form. We look forward to learning about your business and how we can help!