How to Secure a Small Business Loan in South Carolina

ecuring funding is a pivotal step in launching or expanding a small business. For entrepreneurs in South Carolina, numerous options are available, from traditional bank loans to unique state-specific programs, grants, and venture capital opportunities. This article explains how to secure a small business loan in South Carolina, detailing the diverse funding options and important requirements you need to know about. By understanding these resources and how to access them, you can find financial support to help your business succeed.

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Small business loan opportunities in South Carolina

LiftFund

LiftFund is a South Carolina nonprofit that provides business capital to underserved small business owners. They provide loans up to $250,000, including startup loans, microloans, and Small Business Administration loans, with a focus on minority and women entrepreneurs. You can use the loans for commercial real estate, inventory, equipment, vehicles, supplies, or working capital.

LiftFund will work with you even if you have limited collateral or less-than-stellar credit. They also provide business and financial training to help business owners create wealth for their families and communities.

SSBCI Loan Participation Program

The State Small Business Credit Initiative (SSBCI) Loan Participation Program in South Carolina is designed to help small businesses obtain short-term to long-term financing. The goal is to support the growth and expansion of these businesses, which in turn creates and retains jobs in South Carolina. The program works by partnering with financial institutions to provide loans at competitive terms, which reduces the risk for the lender and enables borrowers to receive attractive financing conditions and have lower down payments.

To apply for a loan under the SSBCI Loan Participation Program, you must go through your bank. The program is meant for for-profit businesses with 500 or fewer employees on average, and loan requests should be for $5 million or less.

CommunityWorks

CommunityWorks offers a range of small business and startup loans to small business owners throughout South Carolina. Their Small & Microbusiness Loan products include:

• Credit Builder Secured Savings: Secured Savings accounts help business owners build credit and can increase by $900 at a fixed rate of 2% over a 12-month period. The funds are held in an escrow account for the life of the loan, and upon successful completion of the program, CommunityWorks will match half of your savings amount.
• Business Capacity Loans: These loans are intended to help business owners invest in small equipment, licensing, technology, or a project so that they can grow their business’s capacity. Owners can borrow $1,000 to $3,000 at a fixed rate of 2% for up to 24 months.
• Express Loans: Express Loans offer a faster application process and can be used for general business expenses, such as procuring equipment or inventory. Business owners can borrow $3,001 to $10,000 at a fixed rate of up to 9.5% for up to 48 months.
• Microbusiness Loans: Businesses that have been open for at least one year can borrow between $10,001 to $50,000 at a fixed rate of 8.75% for up to 60 months. These funds can be used for general business purposes, such as providing working capital or buying inventory and equipment.

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Small business grant opportunities in South Carolina

Innovation

Innovation is a program run by the South Carolina Department of Commerce that promotes innovation in the state. Various funding opportunities and resources are available to small businesses and startups, including federal grant support through the 3Phase program for South Carolina small and medium-sized businesses, which offers free Small Business Innovation Research and Small Business Technology Transfer federal grant support.

SC Launch Inc.

SC Launch Inc. is an investment affiliate of the South Carolina Research Authority (SCRA). Its main goal is to support advanced technology and technology-based companies by providing seed and follow-on capital. This funding is meant to supplement other sources of investment, such as venture capital firms, strategic investors, angel investment groups, individual investors, and private equity firms. Returns from SC Launch investments contribute to its financial sustainability and fund future investments.

Eligible SCRA member companies are invited to apply for SC Launch funding by the business's assigned SCRA manager. SC Launch uses convertible loans or equity investment to invest in first, second, and/or third seed-stage funding rounds. SC Launch will also consider later-stage investments, including Series A and B rounds. The organization typically provides financing amounts of up to $200,000 or more per funding round, but there may be matching requirements as well.

Hello Alice

Hello Alice is a platform that offers grants to small businesses. Its Small Business Growth Fund provides small business owners with grants ranging from $5,000 to $25,000 to help them grow their businesses. Applications close in April, and recipients are announced in May. To be eligible for the Small Business Growth Fund, businesses must meet the following criteria:

• Be a for-profit business that is registered and located in one U.S. state, the District of Columbia, or Puerto Rico
• Have a gross annual revenue of less than $1 million

Hello Alice also requires businesses to “have a commitment to their customers and community” and to “have a clear plan for how the funds will help them achieve significant growth” to receive funding.

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Consider loan alternatives

If you don’t want to pursue loans or grants, alternatives are available. Depending on your circumstances, they may be a better choice.

Lines of credit

A line of credit is similar to a credit card in that you have a set amount of funds that you can access as you need it. The money can be used for any business purposes, and you’re only charged interest based on the amount you use. You can pay back the money to “refill” the account.

Merchant cash advances

Merchant cash advances involve trading a percentage of your future credit card sales for immediate funding. You’ll receive a set amount of money up front and repay it with a portion of your credit card sales. If your business needs immediate cash and you have a high volume of credit card sales, this may be a good option.

Invoice factoring

Invoice factoring is when you sell your unpaid invoices to another company — called a factoring company — at a discount. The factoring company takes on the responsibility for collecting the unpaid invoices. This may be a good option if you have cash flow problems because of excessive unpaid invoices. However, fees for this can be higher than for other financing options.

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Next steps

The right business banking solution can help you keep your financial records in order so that you can manage your money more effectively, whether you obtain working capital through a loan, grant, or another option. With Novo business banking, you can effortlessly handle all your business expenses, transfer money, and make payments from any device.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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