How To Secure a Small Business Loan in Missouri

unning a small business successfully in Missouri is competitive and rewarding. Missouri is home to 542,700 small businesses, creating 1.2 million jobs and contributing $47,390,272 in payroll. To thrive as a business, you must continually seek ways to expand your enterprise. One way is by securing small business loans in Missouri to supercharge business growth.

Being a business-friendly state, Missouri has many investors, creditors, and non-profits eager to support small businesses. Resultantly, there are many small business loans and grants opportunities in Missouri.

In this article, we have researched and compiled a list of Missouri small business loans and grant opportunities you can benefit from.

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Small business loan opportunities in Missouri

Here are five loan opportunities that you may be able to take advantage of in Missouri.

Small Business Administration (SBA) loan programs

You can access several Small Business Administration (SBA) loans in Missouri, including SBA 7(a), SBA 504, and SBA Express. SBA loans are government-backed and charge lower interest rates with longer repayment terms.

SBA 7(a), capped at $5 million, is one of the most popular loan options among small businesses in Missouri. You can use the funds as working capital or to purchase equipment and real estate. The interest rate ranges from 9.25%-11% and repayment terms range from 7-25 years.

SBA 504, capped at $20 million, also allows you to buy fixed assets, heavy equipment, and real estate. The interest rate is around 8.25%, and there are repayment terms of 10, 20, or 25 years. [https://www.sba7a.loans/guides/missouri/]

SBA Express, another SBA loan option, is capped at $500,000 million. This is the fastest SBA loan in Missouri and allows you to use it on a number of purchases, including working capital and supplies. The interest rate ranges from 12.75%-14.75% and repayment terms are from 7-25 years.

SBA Loan eligibility requirements

While lenders have varying loan requirements depending on the type of loan program you seek, these general eligibility requirements cut across the board:

• Your business must be for-profit and legally registered to operate in the U.S.
• Your company must be in an eligible industry.
• You must have a good personal and business credit history.
• You must have invested time and equity in your business.
• Your business size must meet SBA's definition of a small business—requirements depend on your industry.

Advantage Capital Funds®

Advantage Capital provides Missouri-based businesses with equity capital investments ranging from $750,000 to $10 million. You can use these funds as working capital, for business expansion, to purchase equipment, or to facilitate ownership transition.

Altcap small business loans

Kansas City-based AltCap runs a small business loan program for you to launch, run, or grow your business. Loan amounts range from $5,000 to $250,000 at fixed interest rates of 8.5%. Repayment terms range from three to five years.

To apply for Altcap’s Fast Start Loan, you must provide:

• Your business plan and EIN form
• Your Articles of Organization or Incorporation
• A Certificate of Good Standing
• Your operating agreement or by-laws
• Insurance information
• Two years of tax returns
• Your income statement, balance sheet, and cash flow statement
• Your business debt schedule
• Personal and business bank statements for the last three months

OakStar Bank

Oakstar Bank has 33 community-owned branches all over Missouri, making it one of the most accessible lenders for small businesses in Missouri. The average loan size at OakStar is $830,772, and the average interest rate is 5.66%.

You can access OakStar’s small business loans to use for:  

• Working capital
• Financing machinery, equipment, and furniture
• Buying and developing real estate
• Refinancing existing debt

OakStar Bank is also good to work with if you’re seeking the SBA 7(A) Loan Program or SBA 504 Loan Program. Because OakStar is an SBA Preferred Lender, submitting your application through OakStar can make your SBA loan approval process faster and easier.

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Small business grant opportunities in Missouri

Business grants are an appealing funding option because you don’t have to repay the money. Grants made to small businesses typically aim to stimulate growth or reward entrepreneurs for spearheading revolutionary changes in a particular sector.

Here are some key small business grant opportunities in Missouri you can consider cashing in on.

Conservation Innovation Grants

These grant opportunities are sponsored by the USDA’s Natural Resources Conservation Service (NRCS). They aim to support businesses and organizations developing and adopting innovative conservation tech and agricultural production methods. You can apply for one of these grants if your business addresses one of the following:  

• Drainage water management systems
• Applying drone technology in farming
• Urban agricultural production and community food sources

These grants cater to veteran farmers, community-based organizations, and underserved producers.

Cooperative marketing grants

If your business is in the tourism and marketing industry in Missouri, you may be eligible for a cooperative marketing grant from the Missouri Division of Tourism (MDT). There are three cooperative marketing programs available:

• Marketing Matching Grant: This grant provides matching marketing funding to businesses that are increasing travel and tourism spending in Missouri.
• Marketing Platform Development Program: This grant provides funding for tourism-relating marketing projects. Your businesses is eligible if you are supporting the development, improvement, or expansion of Missouri's tourism marketing.
• SEM Partnership: MDT and Madden Media have partnered up for this grant to offer businesses and organizations funding for tourism-related search engine marketing (SEM) funding.

Maximum funding available for each of the above grants depends on the division's annual budget.

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Other loan alternatives

While loans and grants are the conventional funding paths for most small business owners, you may want to consider other loan alternatives.

Line of credit

A small business line of credit works like a credit card—you borrow money up to a set credit limit (set by the lender), repay fully or partially, and then continue drawing on the line. The better your credit score is, the more money you can draw from your business line of credit.

Business lines of credit are better suited to satisfy recurrent operational expenses such as payroll and inventory. The upside is that you pay interest only for the amount you take out, not the maximum limit. Neighbors Credit Union is an example of a lender offering lines of credit in Missouri.

Merchant cash advances

With merchant cash advances (MCAs), you borrow a lump sum of capital today and repay it using your future revenue. Your MCA provider will deduct a set percentage of debit or credit card sales or make fixed withdrawals directly from your bank account.

Although an MCA typically has higher fees and interest than loans, it offers ready capital to sort your pressing cash flow logjams.

Invoice Factoring

Invoice factoring involves selling your unpaid invoices to a third party, or factoring company. This company collects the invoices on your behalf but keeps a certain percentage of the invoice amount.

With invoice factoring, your invoices are paid quickly within hours or weeks, and you don’t have to wait 30, 60, or 90 days typical of invoices. However, like MCAs, invoice factoring can be expensive.

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The bottom line

Scaling your small business amid the tough competition in Missouri means you must strategize beforehand. Without enough capital to expand your business, you might end up behind the ranks. Fortunately, you can capitalize on a number of loan and grant opportunities to snowball your small business in Missouri.

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