If you’re starting or expanding a business in Baltimore, you need funding. A business loan is an ideal way for small businesses to get the capital they need, but getting one in Baltimore isn’t always easy. We researched the best business loans in Baltimore to guide your search for the right lender.
Baltimore is ripe for small business development and startup companies, yet the number of new businesses here isn’t on par with business development in similarly sized and situated cities elsewhere in the country. A study by the 21st Century Cities Initiative at Johns Hopkins University shows that Baltimore has fewer business lenders than many other cities of similar size, which has slowed development.
With Baltimore’s lending infrastructure in need of improvement, many companies are looking to investors outside of the city to find the necessary capital to begin or expand a small business, according to the study. While this makes it more difficult to find small business loans, funding is still available for companies that know where to look.
Types of business loans in Baltimore
There are multiple types of business loans available for Baltimore businesses, and knowing which one fits your needs increases the likelihood you’ll be approved. Choosing the right loan for your company’s situation can also help you ease the burden of repayment.
Growing an established business
Repayment over fixed period; collateral usually required
Established small businesses
Long wait times; extensive qualifications; low rates; longer terms
Startups and businesses in disadvantaged areas
Smaller amount; extensive requirements; low cost
Competitive rates; often requires down payment; equipment used as collateral
Business line of credit
Short-term business needs and unexpected expenses
No collateral required; higher fees and rates
Businesses with unpaid invoices
High rates and fees; unpaid invoices serve as collateral
Merchant cash advances
Businesses with high volume of credit card sales
Fast cash; extremely high rates; rapid repayment
Purchase order loans
Small businesses without capital to meet large orders
Lender takes control over process and remits payment, minus their fees, to business owner
Rollover for business startups (ROBS)
Young entrepreneurs with extensive retirement savings
Risks retirement savings; no fees
Finding business lenders in Baltimore
While going through traditional lenders such as banks is still an option, many Baltimore small business owners are turning to nontraditional online lenders, non-profit organizations or government programs to find capital.
Online lenders offer convenience, easy application processes, few requirements, multiple loan types, speedy approval and quick access to money. While some online lenders require good credit scores, others may choose to focus on your business plan and viability when deciding whether your company qualifies for a loan.
There are also a growing number of nonprofit lending options in the area, such as programs from the Maryland Small Business Development Financing Authority, Baltimore Development Corporation and Baltimore Business Lending.
Fees and requirements for business loans in Baltimore
Depending on the type of loan you qualify for, your lender may require collateral. The amount of collateral varies between lenders, but it’s not uncommon for collateral requirements to be equal to the amount of the loan.
Be prepared for application fees and have the following information ready before you apply:
Your credit score
Desired loan amount
Value of the assets you're willing to use as collateral
Proof of assets, income and revenue
Be sure to read all the eligibility requirements before applying for a loan. If your loan application is denied, it’s possible your credit score could be damaged. Lenders may also charge fees for the loan, so be sure you understand all fees and compare the total costs of loans before committing.
With a funding approval rate of more than 92 percent for qualified businesses, a well-designed and easy to use website and funding estimates that arrive within hours, Seek Business Capital is considered a go-to lender for startups and small businesses. Baltimore customers say the company got them the funding they needed quickly.
Imperial Advance offers an online capital qualification calculator, same-day funding, flexible plans, no-obligation offers and financial consulting services. The company provides a variety of loans, including term loans, merchant cash advances and business lines of credit. Baltimore business owners appreciate how the company’s representatives work to find financing solutions.
National Business Capital
National Business Capital has put more than $1 billion into the global marketplace through their business financing and lending. The company offers options including term loans, equipment loans and commercial mortgages. Baltimore customers say this lender has a team that exceeds expectations, but the company could be more transparent about fees.
Baltimore Business Lending
Baltimore Business Lending provides microloans from $10,000 to $50,000 to small business owners and startups that lack the credit history for traditional lending service. The organization works to revitalize local neighborhoods by providing Baltimore business owners with access to capital and has the support of local officials and experienced lenders.
SunTrust offers many different financing options, including term loans, equipment loans and business lines of credit. Members have access to multiple business services and resources. SunTrust says their goal is to help clients achieve financial confidence. While long-time account holders in Baltimore recommend the service, owners of startups report having difficulty with the lender.