Starting a small business can be an exhilarating experience, particularly in a state where the business environment is poised for growth and long-term success.
In Missouri, small businesses make up more than 500,000 companies in the state, employing more than 1.1 million people. In 2016, more than 32,000 new jobs were created from small businesses alone, and an impressive growth rate of 3.6 percent highlighted the state’s ability to support and encourage small business ownership across a wide variety of industries.
In Missouri, starting a small business can be a successful endeavor, but business owners need to be aware of financing options to keep their companies afloat.
More often than not, small businesses need an infusion of capital to help cover significant costs. Companies may need funding for an expansion of a product, opening a new location, maintaining payroll and overhead expenses during slow seasons, or purchasing equipment or inventory over time.
Regardless of the reason why small business financing is needed, small business owners in Missouri must have an understanding of the options available to them, what qualification requirements must be met in order to be eligible for funding, and the benefits and downsides of each type. Below is a guide to small business financing in Missouri with a focus on loans, grants, and outside investments.
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Small Business Loans in Missouri
Missouri small business loans are the most common type of financing available to companies in need of capital. Most small business loans in Missouri are offered through traditional financial institutions, including banks and credit unions, although there are a handful of options available from online small business lenders as well.
Small business loans provide a lump sum of capital to qualified businesses, with a fixed interest rate and an extended repayment term, sometimes up to several years. The predictability of a small business loan repayment agreement is beneficial for companies with strong cash flow and a long-term financing need. However, not all small businesses qualify for Missouri small business loans.
Most lenders offering small business loans to companies in Missouri require at least two years in operation, accurate financial statements and accounting records, and in some cases, collateral to help offset the risk of lending. Here are a few options for small business loans in Missouri.
The Bank of Missouri
The Bank of Missouri was founded in 1891, and was originally the only financial institution in Perry County, Missouri. Over the last 125 years, the bank has expanded its presence in the state, offering a wide range of financial products and services. Small businesses in Missouri have access to a variety of small business loans with the Bank of Missouri, including term business loans, letters of credit, lines of credit, and agricultural business loans.
The financial institution is also a certified SBA loan partner, giving more access to financing to small businesses operating in the state. Companies applying for a small business loan with the Bank of Missouri need to have a strong track record of revenue and a specific need for the loan proceeds. Applications for a small business loan can be submitted in person at a branch location, or by contacting the bank at 1-888-547-6541.
Old Missouri Bank
Small business owners also have an option for a loan with Old Missouri Bank. Founded in 1999, the financial institution is a locally-owned lender headquartered in Springfield, Missouri. In addition to deposit accounts and personal lending, the bank also offers small business loans as an SBA lender.
Small businesses may qualify for funding for commercial real estate purchases, equipment or inventory purchases, business acquisition, working capital needs, or refinancing current debt. The bank offers an array of repayment terms and loan options, but all businesses are required to provide accurate financial statements and a reason for the loan. Small businesses may apply for a loan through Old Missouri Bank by visiting one of its five branch locations and speaking with a business lending specialist.
Providence Bank, founded in Elsberry, Missouri in 1888, is one of the oldest financial institutions in the state. The bank provides a range of products and services to its customers throughout Missouri and surrounding states, including small business loans.
As an SBA partnered lender, Providence Bank gives small businesses access to longer repayment terms than conventional business loans with competitive interest rates and flexible payment options. Qualified businesses also receive prompt application decisions along with personalized service throughout the life of the loan. Applications for a small business loan with Providence Bank can be submitted in person at a branch location.
Heritage Bank of the Ozarks
Founded in 2002, Heritage Bank of the Ozarks is a newer financial institution helping meet the financing needs of small businesses in Missouri. The bank provides an array of deposit accounts and personal lending solutions, along with its line-up of SBA loans for eligible businesses operating in the state.
Heritage Bank of the Ozarks offers financing to businesses in the startup phase. It also offers financing for more established companies for funding needs such as commercial real estate purchases, construction, equipment and inventory purchases, or working capital. The financial institution also provides extended repayment terms, fixed interest rates, and flexible payment options for small businesses that qualify.
Applications are reviewed for financial stability and time in operation, and can be submitted in person at a Heritage Bank of the Ozarks branch.
Small Business Grants in Missouri
Small business grants are another way for certain companies in Missouri to receive the funding they need for longer-term projects. Most grants in Missouri are available to businesses that meet a specific need, either on a local or state level, and the funds received do not need to be repaid so long as the grant specifications are met.
However, not all businesses utilize grant funding because it requires ongoing work on a particular project in most cases, and grants are highly competitive among small businesses in the state. Here are two options for small business grants available to companies in Missouri.
Missouri Building Entrepreneurial Capacity Program
Through the Missouri Building Entrepreneurial Capacity Program, small businesses operating within the state may have access to grant funding. Strategic investments are made to non-profit businesses that support entrepreneurs involved in developing and implementing new technologies.
The purpose of the grant funding is to expand the growth of innovation within the state while enhancing research and commercialization efforts in animal health, plant science, biomedical science, applied engineering, and defense sectors. Grant applications are available online, and the amount of funding available is subject to each specific small business submitting an application.
LaunchKC Grant Program
Founded in 2015, the LaunchKC Grant Program is a months-long grant award competition intended to help startup technology companies remain in Kansas City. The grants awarded by the program range in amount, but can be as high as $100,000 for qualified small businesses.
The grant program focuses on tech firms that want to help sustain and grow the economic environment of Kansas City by designing and implementing innovative products and services that have a large growth opportunity in the market. Applications for the LaunchKC program are available online.
Small Business Investors in Missouri
Another way for small businesses in Missouri to receive financing for their capital needs is through outside investment firms. Angel investors, venture capitalists, and seed-capital organizations offer a variety of funding to businesses in the state, focused mostly on high-growth potential companies.
Outside investment financing typically comes in the form of equity in the business, meaning business owners give up some financial stake in their company over the long run. However, investments from venture capitalists, seed, or angel investors may come with invaluable insight from prominent leaders in a specific field, creating an environment for exponential growth for the business.
Here are a few options for small business investors in Missouri.
Made available through the Missouri Technology Corporation, the Missouri TechLaunch program provides debt financing and equity investment in Missouri-based startup businesses that meet certain requirements.
Companies seeking investment funding through the program must have significant industry experience in the technology sector, a desire to commercialize a technology discovery, and work in animal health, plant science, biomedical science, applied engineering, or defense industries. Financing is capped at $100,000 per business applicant, and interested businesses can gather more information and apply online.
St. Louis Arch Angels
As a group of accredited investors, the St. Louis Arch Angels work to finance potential startup ventures operating in the state. The purpose of investments from St. Louis Arch Angels is to create highly profitable returns on investments in small companies that have the potential to earn a significant amount in annual revenue in developing or existing markets.
St. Louis Arch Angels evaluates all small business requests for investment based on its in-depth screening process. Small businesses may find out more about the pitch process, available financing, and the investors behind the organization online.
Headquartered in St. Louis, Nidus Partners is an investment capital firm focused on identifying and commercializing innovative technologies in the energy sector. The investment firm offers seed funding to early-stage small businesses in Missouri, as well as entrepreneurial experience across its partners and collaboration opportunities for high-growth companies.
The seed investment firm only offers financing to small businesses that have a strong likelihood of making a profitable return over a short period of time. Small businesses interested in seed capital from Nidus Partners can submit their pitch online.