Small Business Grants in Ohio – Overview
Small businesses in Ohio have numerous factors working in favor of growth. The US federal government allots more than US$ US$ 25,410 million in grants for businesses.
The local government allocates nearly US$ 19,115 million into the business sector each year.
This forms a majority of the federal and state budget combined. As of 2021, there are over 192,790 businesses registered and operating in the state of Ohio.
More than 104,560 businesses have less than 4 employees. These include sole proprietorship and work-at-home enterprises. There are over 36,300 businesses with less than 10 employees.
This shows that there are tens of thousands of small businesses operating in Ohio. Every start-up owner knows the importance of business grants.
These can be truly life-saving for smaller establishments, especially to recover from the damaging commercial effects of the recent worldwide pandemic.
In this article, we have listed the top sources you can seek from small business grants in Ohio.
Top 3 Ways to Get Small Business Grants in Ohio
These are the top sources where you can seek small business grants in Ohio:
1 – 7(a) Small Business Loan
The Small Business Administration (SBA) offers 7(a) loans for small businesses in Ohio. This loan is provided to small-sized businesses operating within the United States.
This loan is aimed to assist for-profit businesses that cannot secure funding from other conventional sources.
The eligibility criteria for this loan dictate that it is meant only for businesses and not individuals.
So, the eligibility requirements focus more on the business aspects, rather than the owner.
For instance, the criteria are meant to check the size of the business, its for-profit status, lack of funding resources and ability to make repayment.
The loan amount can be used for the following purposes only:
- Short and long-term working capital
- Revolving funds centered on the value of existing receivables and inventory
- Buying materials, supplies, fixtures, furniture, machinery or equipment for business
- Buying real estates, such as lands and buildings
- Constructing a new building or renovating an existing one
- Establishing new businesses and assisting in acquiring, operating, and expanding the existing business
- Refinancing current business debts (conditions applied)
To learn specific eligibility criteria for securing a 7(a) business loan, feel free to visit the official SBA website at https://www.sba.gov/funding-programs/loans.
The maximum duration of this loan is around 25 years for real estate. In case the loan was taken for working capital, then the loan tenure is for 7 years only.
To learn details of loan terms and conditions, you can visit the official page at https://www.sba.gov/funding-programs/loans/7a-loans.
2 – MicroLoan Program
The SBA also offers the MicroLoan Program. This initiative is aimed to assist start-ups, new businesses, and growing small businesses. This loan is also given to not-for-profit childcare centers too.
Under this initiative, the SBA offers funding to nonprofit community-based lenders, also known as Microlender Intermediaries.
These, in turn, provide loans to eligible borrowers. The maximum loan amount under the SBA’s MicroLoan Program is US$ 50,000. On average, individual borrowers can receive as much as US$ 13,000 in the loan amount.
Applications for this loan need to be submitted to the local intermediary. All types of credit decisions for this loan are made at the local level.
The eligibility criteria for the MicroLoan Program vary. These are dependent mainly on the individual intermediary. Each intermediary has specific and varying credit and lending requirements.
However, if you wish to apply for a microloan then you will usually need to provide collateral in lien of the loan amount. The intermediary may also require business owners for a kind of personal guarantee too.
To apply for this loan, you will need to get in touch with an Intermediary Microlender in your area. These are nonprofit organizations that receive loans from the SBA.
These organizations, in turn, offer small loan amounts to small businesses operating in their communities.
These organizations also offer training and technical assistance to owners and employees of small businesses. The Microlender makes the final decision on credits.
The application process for this loan varies from Microlender to Microlender. Hence, it is highly advised to get in touch with your local MicroLoan Intermediary as quickly as possible.
The maximum loan term for this is up to 6 years. However, the terms and conditions of MicroLoan vary.
The term duration of these loans is dependent on the loan size, its use, the intermediary lender’s requirements and the needs of the borrower business.
The rate of interest also varies, depending on the intermediary lender and cost to the intermediary.
For details of eligibility criteria, application process and acquiring the loan, you can visit the official website at https://www.sba.gov/funding-programs/loans/microloans.
3 – Business and Industrial Loans
The US Department of Agriculture (USDA) offers the Business & Industrial (B&I) Guaranteed Loan Program.
This program is meant to improve, develop and finance businesses in rural communities. This loan has helped numerous industries and businesses to boost employment and improve the economy of small-sized rural communities across the United States.
The B&I Loan by SBA help boost the current private credit structure with the guarantee of equity loans. This way the community gets long-lasting economic and commercial benefits.
The eligibility criteria for this loan require the applicant to be:
- An individual
- A corporation, cooperative organization, partnership or legal entity organized and operated on a nonprofit or profit base
- An Indian tribe in the state of Federal reservation, or other Federally-recognized tribal groups
- A public body
- Engaged in providing employment
- Working to improve economic or environmental climate
- Promoting conservation, development and use of water for aquaculture
- Reducing reliance on non-renewable energy by promoting the development of renewable energy systems
Individual loan applicants should be legal citizens of the United States or reside in the US after legal admittance for permanent residence.
Corporations need to be at least 51% owned by individuals who are US citizens or reside in the country legally as permanent residents. This loan is mainly awarded to applicants operating in rural areas.
For complete details of eligibility criteria and application process, you can visit the USDA official website at https://www.rd.usda.gov/programs-services/business-programs/business-industry-loan-guarantees.
These are the top sources in Ohio to seek grants for small businesses. There are numerous similar initiatives run by the Ohio state and federal governments.
To learn about additional resources and local avenues for small business grants in Ohio, you can choose to do a quick online search.