Small Business Financing in Kansas: Loans, Grants, and Investments

Many small businesses might face the need for affordable funding at some point during their lifetime for major purchases like inventory or equipment, paying for commercial real estate, or simply covering working capital and overhead expenses during periods of slow revenue. Being in the right place as a small business, both financially and in terms of location, is important in ensuring small business financing is available.

In the state of Kansas, small business owners have several options for financing through a myriad of sources. Part of this is because of the robust environment for smaller companies throughout the state. In 2017, there were more than 250,000 small businesses operating in Kansas, creating more than 10,700 new jobs for Kansas residents. The growth rate of small businesses in Kansas was 2.3 percent, higher than the national growth rate of 1.2 percent, giving new small business owners optimism in locating their company in the state.

When small companies recognize the opportunities in Kansas along with the financing options available through small business loans, grants, and outside investments, business owners have a high likelihood of sustaining a profitable enterprise. Below are small business financing options to make the trek easier for companies in Kansas.

Small Business Loans in Kansas

Small businesses often look into a traditional business loan first when considering their need for financing. This is because small business loans offer the greatest level of predictability in cost and repayment, with fixed interest rates and a set payment schedule over time. Small business loans in Kansas are available from both credit unions and banks, as well as some online lenders catering to certain companies.

When a small business in Kansas considers a loan through a financial institution, it is important to recognize that qualification requirements are often strict, and steady revenue is necessary to repay the loan. Here are a few options for small business loans in Kansas.

First Bank Kansas

Established in 1961, First Bank Kansas has been operating throughout the state with a variety of traditional bank products and services. In addition to personal lending and deposit account solutions for its customers, this financial institution also gives access to small business loans to qualified companies located in the state.

Small business loans are available for many company needs, including commercial real estate purchases, agricultural business development, rental property loans, and construction loans. The bank is an SBA partner lender which means small businesses in Kansas have access to several different terms and amounts for financing. The bank provides competitive interest rates on its loans, as well as convenient automatic repayment from a checking or savings account. Small businesses can apply for a loan with First Bank Kansas at any of its branch locations.

Capital City Bank

Another option for small business loans in Kansas is Capital City Bank. This financial institution, founded in 1892, has been serving communities throughout the state with a wide array of financial products and services. In addition to conventional accounts and lending options, Capital City Bank also offers several small business loan opportunities for qualified companies.

The majority of the small business lending through Capital City Bank is through SBA programs, including SBA 7(a) and SBA 504 loans. Loan limits extend up to $5 million for term loans, with repayment as long as 25 years for fixed asset purchase loans. Businesses may also qualify for working capital financing, commercial real estate loans, or equipment and inventory financing. Small business loan applications with Capital City Bank start with a phone call to a commercial lending specialist through the bank.

Farmers Bank and Trust

For more than 100 years, Farmers Bank and Trust has been providing banking products and services to several communities in Kansas. The financial institution focuses on deposit and loan solutions for retail, manufacturing, agricultural, energy, real estate, and broad commercial customers, as well as SBA loans for eligible Kansas businesses.

These fixed interest rate loans come with predictable repayment schedules and may be used for expansion or business acquisition, equipment purchases, capital asset purchases, and commercial vehicles. Small businesses must have a strong track record of financial responsibility to qualify, while interest rates and final repayment terms are based on the business creditworthiness. Applications for small business loans with Farmers Bank and Trust can be submitted in person at a branch location.

Bank of the Prairie

Another option for small business loans in Kansas is Bank of the Prairie. This financial institution, established in 1914, prides itself on being a local, community-focused bank that offers an array of products and services to its customers. Small business loans are available to eligible businesses for equipment financing needs, commercial real estate loans, construction loans, or business acquisition financing.

Bank of the Prairie offers competitive interest rates and repayment terms, both of which are fixed, although these range depending on the strength and history of the company applying. Small businesses in Kansas may submit a loan application with the financial institution in person or by e-mailing a loan officer.

Small Business Grants in Kansas

In addition to more conventional small business loans, companies in Kansas may also seek out financing through small business grants. Unlike loans, small business grants do not require repayment, so long as the requirements of the grant are met.

While grant funding is beneficial because it does not need to be repaid over time, the grant environment in Kansas is highly competitive. This can make it difficult for small businesses to receive grant financing when they need it most. Here are a few small business grant opportunities available to small businesses in Kansas:

Community Development Block Grant Program

Through the Small Cities Community Development Block Grant Program, the Department of Commerce in Kansas has the ability to distribute federal funding to Kansas small businesses in specific cities and counties. Projects available for grant funding through the program include those that directly benefit low- and moderate-income individuals, that remove or prevent slum conditions, or that eliminate an urgent need because of a local disaster. Application information can be found online, as well as total grant funding amounts.

JumpStart Program

As a community-focused grant opportunity for small businesses, the Jump Start program provides up to $5,000 to companies within the first 24 months of starting a new business. The grant funds are meant to ease the pressure of overhead expenses, like rent, marketing, and utilities. Financing cannot be used to pay for equipment, inventory, or employee wages.

Applicants must have a strong cash flow in order to qualify, as well as proof of sufficient resources and capital contributed to the business. More information about the JumpStart Program for small businesses in Kansas can be found online.

Small Business Investors in Kansas

Another viable option for small business financing in Kansas may be outside investment from a venture capitalist firm, an angel investor, or a seed-capital investor. These types of investments often come with an equity or debt financing agreement with the business owner, meaning they ultimately give up a portion of ownership in the business.

However, outside investment can be a strong solution for high-growth potential small businesses in Kansas. Most investors provide a degree of management and business expertise not found with other financing sources, and the amount of funding can be significant. Here are a few options for outside investment financing for small businesses in Kansas:

Wichita Technology Corporation

The Wichita Technology Corporation is a venture capital and seed investment firm founded in 1994 that’s focused on Kansas-based businesses. The firm invests predominantly in small companies that have superior growth potential in the areas of technology advancement, transfer, and commercialization.

Small businesses that receive financing from the Wichita Technology Corporation may also receive in-depth consulting and guidance on business practices. Information about the application process for venture and seed-capital financing can be found on the firm’s website.

Midwest Venture Alliance

The Midwest Venture Alliance was founded in 2005 as a network of accredited investors that focus on providing financing to high growth companies in the Midwest. Both venture capital and early-stage financing are available through the firm, mainly to small businesses in the technology sector.

The investment firm offers financing ranging from $250,000 to $2 million to small businesses that show signs of a significant return on investment. The investor network also provides reviews of business plans and investment opportunities in the state, as well as access to an experienced team of managers and business professionals. Information about application requirements can be found online.

Open Prairie Kansas

With offices throughout the Midwest, Open Prairie offers investment capital to businesses across a variety of industries. The firm’s Kansas office has managed multiple investment funds consisting of several small businesses in the area, all with the potential for high-performance returns to investors. Open Prairie allows small businesses in Kansas to submit their business plans and financing requests via phone or through an online contact form.