Financing is the lifeblood of small businesses. Without proper funding, your dream will remain just that – a dream. It’s hard to get a small business off the ground without money. And with 80% of new businesses failing within 18 months, it’s important to have enough money to help your business become one of the few that succeeds.
If you’re starting a business in Indiana, you’ll need to know what your options are for financing, including small business grants, business loans, and investors. This guide will show you all of these options so you can find the right financing to meet your needs.
On this page:
- Indiana Small Business Grants
- Small Business Loans in Indiana
- Small Business Investors in Indiana
- Other Sources of Small Business Financing
- Getting Your Business Ready for Financing
- What Kind of Financing Do You Need?
Indiana Small Business Grants
You have many options for Indiana small business grants. You just have to know where to look for them. Here are some places you can start your search for business grants, and you can also check out some grants below that are available to Indiana residents including:
- Amber Grant for Women: If you’re a woman business owner in Indiana, the Amber Grant is open to you. Each month, a woman will receive $2,000. At the end of the year, one of the monthly winners will receive an extra $25,000. Anyone can apply if they pay a $15 application fee.
- Dare To Dream Grant Program: This grant offers up to $10,000 in funding. Money is available to students who have a business idea. Applications are accepted every January and September.
- National Association for the Self-Employed Growth Grants: Up to $4,000 will be awarded to business owners to meet specific micro-business owners’ needs. To become eligible for this award, you must be a NASE member.
- The StreetShares Foundation Veteran Small Business Grants: StreetShares awards a first place grant of $15,000, second place grant of $6,000, and third place grant of $4,000 to veterans of the U.S. military or immediate family members of military members who died in active duty. Eligible business owners must be at least 21 years old.
- FedEx Small Business Grant Contest: If you’re looking for small business grants for minorities in Indiana, try these grants that are open to everyone. Multiple grants are given each year throughout the U.S. which range from $15,000 to $50,000.
Small Business Loans in Indiana
If you’re looking for Indiana business loans, you’re in luck. There are several banks that lend money to the state’s small business owners. Here are some of your options:
- The New Washington State Bank: This bank offers a wide assortment of small business loans, including vehicle and equipment loans, lines of credit, and builder, construction, and development loans. This bank has eight branches in Indiana. Your interest rates and loan terms will depend upon your credit score and information you supply about your business.
- The North Salem State Bank: What better place to get help with your small business than another small business such as North Salem State Bank? This bank offers SBA financing, commercial real estate loans, equipment and machinery loans, leasing, accounts receivable financing, inventory loans, and operating lines of credit. Terms, rates, and eligibility will be dependent upon the applicant’s individual information.
- The First State Bank of Middlebury: This bank offers lines of credit, agricultural loans, commercial real estate loans, and SBA loans, as well as business manager services and letters of credit. In business since 1910, this lender has a long history of providing personal banking as well as business services and financing. As with the other banks that provide small business loans in Indiana,your financial history and business details will determine your rate and terms.
Small Business Investors in Indiana
If you’re looking for an investor, Indiana has some ready to help take a business to the next level by providing funding. Here are some options to consider:
- Elevate Ventures: This is one of the biggest venture capital firms in the state of Indiana. It offers funding to business owners interested in launching their business, building it, or relocating it to Indiana. Generally, the businesses that best align with Elevate Ventures are in agriculture, information technology, life sciences, medical devices, or advanced manufacturing. The businesses Elevate Ventures most prefers to support are those in the idea phase, the early phase, or the growth stage.
- Indiana Philanthropic Venture Fund: This evergreen fund supports entrepreneurs with ties to Indiana University. It makes equity investments in companies that are just starting up. The money earned from investments is then funneled back into the fund to give support to other new businesses.
- XCap Angels: This angel investment group is interested in helping seed businesses and early-stage businesses. Located in Indianapolis, xCap will invest in any company that is located in North America. This group says it values applicants who are unique and passionate about their business.
Other Sources of Small Business Financing
Have you struck out with the local lenders or do you simply want to expand your horizon and see what an online lender can do for your small business? If you don’t mind doing business with an institution that doesn’t have a brick-and-mortar location, here are some of our favorites to check out.
With Fundbox, you can become eligible for a line of credit for your business, small business loans, business loans for women, microloans, auto fleet repair loans, and more. Fundbox charges an origination fee of 4.66%. If you opt to pay back your loan early, all the remaining fees will be dropped. You can borrow up to $100,000.
To be eligible, you’ll have to have:
- A checking account for your business.
- Three months of business bank account transactions.
- A suggested $50,000 in revenue each year for your business.
- A U.S. based business, or a business in a U.S. territory, including U.S. Virgin Islands, Puerto Rico, North Mariana Islands, Guam, or American Samoa.
BlueVine offers business loans up to $5 million. Fixed interest rates start as low as 4.8% for BlueVine’s line of credit services.
Business owners may also apply for:
- A line of credit up to $250,000.
You don’t need perfect credit to be accepted – businesses with credit scores as low as 530 can become eligible for funding with invoice factoring and businesses with credit scores of 600 or higher can become eligible for a line of credit. BlueVine will look at your customer base, personal credit, and the cash flow of your business.
With rates starting as low as 4.99%, Funding Circle is an attractive choice for business owners. Borrowers choose a loan term ranging from six months to five years and can borrow anywhere from $25,000 to $500,000.
To apply, you’ll need to provide six months of bank statements for your business as well as your last two business tax returns. You also will be asked to provide a personal tax return and potentially other business documents.
Getting Your Business Ready for Financing
If you’re wondering how to start a small business in Indiana, one of the first things you should think about is financing. You have to make sure you have the money in place to get your business up and running.
To attract an investor or get approved for a loan or grant, you need to show you’re responsible and that your business is solid or shows promise.
To do that, you should have a solid business plan in place if you haven’t already opened your business yet. Your business plan should include financial projections that are realistic, not best-case scenarios. It should also spell out what customer base you’re going after and the image of your brand.
You also should have some of the money saved up to launch your business. That shows you’re taking it seriously and aren’t starting your business on a whim.
If it is an existing business that you’re seeking funding for, make sure you keep your business bank account separate from your personal bank account. Work to keep your credit score as high as possible by keeping a close eye on your business finances. Pay your bills on time and keep a separate credit card for your business – don’t use your personal card.
Make sure to keep your debt load as low as possible for your business too. Just because you can borrow money doesn’t mean you should take every penny available to you. Remember, you’ll have to pay it off someday so be as responsible as you can be.
Keep records of all your business transactions so you can prove the overall health of your business to potential lenders.
And, finally, before you decide on a financing solution, make sure you’ve compared rates from different lenders to find the most affordable option.
What Kind of Financing Do You Need?
You’re the best person to answer this question because no one knows your business as well as you do. But there are certain situations where one funding option may be better than another.
Do you have ongoing capital needs and you’re never sure from month to month if you’ll need to borrow money? Then a line of credit may be your best bet. It will be there if you need it and you don’t have to draw on it when you don’t.
If you have a big one-time purchase coming up, a secured loan from your local bank might be best.
If you need a short-term small business loan, but you need the money quickly, you might want to go with an online lender. They’ll generally get money to you faster than a traditional bank will. But just be aware that the rates are sometimes higher.
Starting a business in Indiana can be challenging. But if you’re dedicated and put in the work, you can hopefully make your company a success. Just make sure you have access to the funding you need so you give yourself enough time to get your business off the ground so you have the best chance.