Small business loans in Chicago
Looking for a loan for your small business in the Windy City? Learn what your financing options are and which ones would best fit your needs.
Types of business loans in Chicago.
There are a variety of small business loans in Chicago. Since each loan comes with its own set of benefits and eligibility requirements, it’s a good idea to shop around. When you do so, you’ll likely come across these popular options.
SBA loans
SBA loans are business loans that are partially backed by the Small Business Administration (SBA), a federal agency. These loans are serviced by private lenders, but are popular because they generally have good interest rates.
Line of credit
Use a line of credit as a flexible form of financing. Unlike with a loan, this option does not involve a big disbursement upfront that you must repay, providing a flexibility that better fits many entrepreneurs’ needs.
Term loan
Term loans are common small business loans in which you would apply for a large disbursement of capital and then repays it over several years, along with fixed or variable interest.
Equipment finance
With equipment financing, you receive a piece of equipment and then pay off the cost of the equipment in installments. This way, your business can make money off the equipment immediately, even if you don’t have the funds to buy it at the sticker price.
Accounts receivable financing
Accounts receivable financing is an alternative form of business financing in which your unpaid invoices serve as collateral for a lump disbursement of funds.
Chicago business loan options
Several local organizations provide small business funding resources in Chicago.
Allies for Community Business is a nonprofit Chicago-based organization that offers capital and coaching for entrepreneurs. Its small business loans range from $500 to $100,000.
SomerCor offers SBA 504 loans along with City of Chicago Small Business Improvement Fund grants.
Greenwood Archer Capital offers several loan programs including one focused on the south and west sides of Chicago with 82% of their loans going to Black entrepreneurs.
Byline Bank has over 40 branches throughout the Chicago and Milwaukee metro areas and offers SBA 7(a), 504 and CAPLines.
Parkway Bank is a community bank headquartered in Chicago that offers term loans, lines of credit, equipment loans, and SBA loans.
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FAQs
If you’re looking for a co-working space with no shortage of amenities and networking opportunities, check out 1871, a nonprofit innovation hub that supports “early stage, growth stage, and corporate innovators.”
The Chicago Inventors Organizationis also a good resource, especially if you consider yourself an inventor and want to take advantage of one-on-one consulting and business plan support. There’s also the Illinois Small Business Development Centers (SBDC)with locations in Chicago and access to business education and training opportunities as well as one-on-one business advice.
The Chicago Recovery Plan Community Development Grant offers small and large grants that are intended for pre-development, construction, or renovation costs for permanent capital improvement projects. In addition, The City of Chicago’s Small Business Improvement Fund(SBIF) offers grants that can reimburse you for the repair or rehab of your business space or adjacent land acquisition.
Chicago business loans are versatile, meaning you can use them to cover a plethora of small business expenses. Whether your goal is to pay for a commercial building or large equipment or you simply want money on hand for emergencies or seasonal shortages, small business financing is a great option.
Before you go ahead and take out a Chicago business loan, choose a business structure, such as a limited liability company, sole proprietorship, or partnership. Then, register with the Illinois Department of Revenue and IRS. You might also need to obtain a Chicago business license, depending on your industry. When you’re ready to apply for financing, keep in mind that lenders will consider your credit score, annual revenue, and other factors when reviewing your application.
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