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Small businesses are often referred to as the backbone of the economy, and that certainly rings true in Louisiana.
Small businesses in Louisiana account for 97.3 percent of all companies operating in the state, according to the US Small Business Administration Office of Advocacy. More than 427,000 small businesses are registered in Louisiana, providing nearly 1 million jobs. Furthermore, over the last several years, the number of Louisiana small businesses has grown 1.6 percent, adding an estimated 16,400 jobs across numerous industries.
While the economic environment for small businesses in Louisiana is strong, small business owners face several challenges in trying to run a profitable, sustainable company. Small business financing in Louisiana is common, whether it is to cover working capital needs, expand locations or products, or to purchase inventory or new equipment.
There are several small business financing options in Louisiana, each with its own set of advantages and disadvantages. Below is a quick guide to small business loans, grants, and investments for Louisiana small businesses, as well as details on how to secure each type.
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Louisiana Small Business Loans
The most common source of small business financing is fixed-term business loans. Both banks, credit unions, and online lenders offer Louisiana small business loans at more affordable interest rates and manageable repayment terms for businesses that have strong revenue, an established time in business, and organized financial statements.
Several financial institutions offer small business loans in Louisiana, including the following:
As low as 6.00%
$5,000 – $2 million
1 – 5 years
The above information is for the Lendio Business Term Loan.
Lendio is the largest small business loan marketplace in the U.S. with a network of over 300+ lenders. These lenders include PayPal, Bank of America, American Express, and more.
You can apply with one simple application without impacting your credit. The application process can be completed online in 15 minutes with no fee or obligation. If approved, funds can be made available in as little as 24 hours.
- Short term loan
- Business term loan
- Business line of credit
- Merchant cash advance
- Business credit card
- Equipment financing
- Commercial mortgage
- Startup loan
- SBA loans
- Accounts receivable financing
- Business acquisition loan
9.77% – 35.98%
$5,000 – $500,000
6 – 60 months
The information above is for the LendingClub Business Term Loan.
LendingClub is a peer-to-peer lender that connects investors with businesses in need of financing. To be eligible, businesses must have at least $50,000 in annual sales, as well as been in business for 12 months or more.
You can apply online in under 5 minutes and receive multiple quotes. If you decide to pay off your loan early, there are no prepayment fees to worry about.
7.00% – 69.00%
$500 – $250,000
6, 12, or 18 months
The information above is for the Kabbage Business Line of Credit.
Kabbage is a small business lender offering a business line of credit. The lender has a low minimum loan amount which can make it a good option for those in need of a small amount of financing.
In order to be eligible, your business needs to be at least 12 months old, with $50,000 in annual revenue.
Small Business Grants in Louisiana
In addition to leveraging Louisiana small business loans, some companies may be eligible for grant funding. Louisiana small business grants are different from credit union or bank loans in that the funds received do not need to be repaid. However, nearly all small business grants have specific requirements to keep the funding. Grants are available through several state organizations as well as private institutions to help small businesses in Louisiana fund operations and projects.
Foundation for Louisiana Grants
Charitable organization Foundation for Louisiana provides several grants to eligible small businesses operating in the state. The organization’s mission is to help fund programs and initiatives that focus on building and sustaining resilient communities throughout Louisiana.
Small businesses working on projects that involve community economic development, grassroots civic engagement, policy initiatives, and disaster relief and response may qualify for a grant from the Foundation.
Applications are submitted directly through the organization each year, and amounts vary depending on the project.
Small Business Investors in Louisiana
Outside investors are yet another way for small businesses to secure financing for a myriad of needs. Investors typically come in the form of private equity, venture capital, or angel investor funds.
These financing arrangements are more complex than small business loans and grants, and they are repaid over time through equity in the business. In some cases, investors take an active management role in the company to ensure their financial contribution is protected against loss.
Here are three reputable investors for small businesses in Louisiana:
The Louisiana-based capital investment firm, Sisung Group, provides venture capital to small businesses in need of financing for growth and future profitability. The firm is a licensed Louisiana Capital Company and Business and Industrial Development Corporation that focuses on working with entrepreneurs in the early stages of their business.
Sisung Group offers equity and debt capital to high-growth businesses in the state to help with the expenses of organization, market planning, and consulting. Each small business that applies for venture capital with Sisung is evaluated based on its management team, time in business, the uniqueness of its product or service, and future liquidity of the company.
With offices in New Orleans, New York, and Salt Lake City, LongueVue Capitalhas ample experience in helping high-growth potential small businesses secure and maximize venture capital.
The investment firm identifies opportunities with Louisiana small businesses that lead to a substantial return on investment and a profitable exit. LongueVue Capital is not industry-specific in its investments, but instead focuses on small businesses that have a scalable business model, have fundamental growth opportunities, strong cash flow, and an entrepreneurial management team. The firm offers financing for several business needs, including acquisition funding, restructuring opportunities, and the transition of family-owned businesses.
Stonehenge Capital has offices throughout the United States, but its Baton Rouge office focuses on Louisiana small businesses that have a strong potential for exponential growth in the future.
The venture capitalist firm offers private equity, mezzanine debt, and venture capital financing to small businesses that show leadership in their industry with an experienced management team and a focus on innovation. The firm takes a flexible and creative financing approach with business, customizing the funding agreement and partnership efforts from the start.
Small businesses can contact Stonehenge directly for application requirements and funding requests.
Author: Melissa Horton