Starting or expanding a small business takes significant capital, and finding the right funding sources can be a major challenge for entrepreneurs in St. Mary Parish, Louisiana.
However, there are a number of financial assistance opportunities offered through state and federal agencies, as well as private entities, that can help turn your business aspirations into reality or grow your existing business. This blog will provide an overview of some key funding options available to local business owners.
5 Sources of Funding for Small Businesses in St. Mary Parish
The Louisiana Small Business Loan Guaranty Program
The Louisiana Small Business Loan Guaranty Program provides guarantees to banks and other financial institutions for loans they extend to small businesses based in Louisiana.
This program helps entrepreneurs in securing the necessary financing for their business development or expansion needs.
Here are some key details on this program:
- It offers guarantees on loans up to 80% or a maximum guaranty amount of $1.5 million, significantly reducing the risk for lenders.
- Eligible businesses must be authorized to conduct business in Louisiana and maintain an office within the state. The business itself must be based in Louisiana.
- This program is applicable to businesses with 500 employees or less, benefiting both new startups and existing businesses.
- Loan funds acquired through this program can be utilized for various purposes, including land and building acquisition, equipment purchases, working capital, inventory, and more.
To learn more and see if your small business qualifies, you can visit this link. Be sure to thoroughly review the eligibility requirements.
The U.S. SBA Loan Programs
The Small Business Administration (SBA) oversees several attractive loan programs designed to make it easier for small businesses to secure the funding they require. The SBA collaborates with various approved lenders nationwide to offer loans tailored to your specific business needs. Some of the most popular SBA loans include:
7(a) Loans
The SBA’s primary loan program, the 7(a) Loan Program, provides loan guaranties to lenders that allow them to provide funding for small businesses with special requirements. This program offers guaranties of up to $5 million to qualified small businesses.
The 7(a) loans can be used for a variety of business purposes, including purchasing real estate or equipment, refinancing existing debt, working capital, and more. This critical source of funding for small businesses allows them to obtain financing that they may not otherwise be eligible for.
504 Loans
The 504 loan program offers long-term, fixed-rate financing for major fixed assets, including real estate and equipment. The maximum loan amount for a standard 504 project is $5.5 million. For certain energy projects, the borrower can receive up to three 504 projects not to exceed a total of $16.5 million.
Microloans
Through its Microloan program, the Small Business Administration provides loans of up to $50,000 to assist small businesses and select non-profit childcare centers. Business owners can use these microloans to rebuild, re-open, repair, enhance, or otherwise improve their small business operations.
To explore all the SBA-backed loan options and lenders in your area, spend time browsing their website. The site provides plenty of details on eligibility, use of funds, terms, and more.
Tax Credits
Exploring federal and Louisiana state tax credits is another smart funding strategy for business owners in St. Mary Parish. Tax credits allow you to directly reduce your tax bill on a dollar-for-dollar basis, effectively putting hard-to-find cash directly back into your business. Some examples of tax credits include the Enterprise Zone Tax Credit and the Research and Development Tax Credit.
Angel Investors
Angel investors are high-net-worth individuals who choose to provide capital to startups and small businesses in exchange for partial ownership equity. This provides entrepreneurs with another way to access the funding they require.
To secure investment from an angel investor, small business owners must pitch their business idea and plans for growth. Your presentation must convince the investors you have a viable concept and stand to deliver substantial returns on their capital. There are various angel investor networks that can connect you with potential investors who may be interested in your venture.
Additionally, Louisiana offers a 25% Angel Investor Tax Credit to incentivize investment in eligible small businesses that meet certain criteria.
Crowdfunding
Crowdfunding platforms like Kickstarter, Indiegogo, and Fundable allow entrepreneurs to raise funds from a large number of backers who contribute small amounts each. This grassroots-style fundraising has helped many new businesses and projects get launched.
Running an effective crowdfunding campaign takes considerable planning, promotion across online media, and persistence. But, it can provide the capital injection your business idea needs to take off.
Read also: Starting a Business in St. Mary: How to Choose a Business Structure
As you can see, St. Mary Parish provides a wealth of opportunities for securing funding for small businesses at every stage. Entrepreneurs can tap into SBA-guaranteed bank loans, utilize tax credits, pitch to angel investors, and harness the power of crowdfunding.
Reach out to our St. Mary small business resource center for guidance on tailoring the optimal funding strategy for your venture. With drive, dedication, robust funding sources, and a little help from our business support network, your entrepreneurial aspirations can become a reality here in St. Mary Parish. Contact us today!