If you’re starting a new company or expanding an existing one, a business loan can be a great option. But finding the right company to secure capital from can seem like a daunting process. Our partners at ConsumerAffairs researched the best business loans in Kansas City to help your business prosper.
Kansas City is growing, and our small businesses help make KC the impactful community that it is. Around 95 percent of companies in Missouri are classified as small businesses, and the state was named one of the best in which to start a small business in 2017.
In 2016, 69 percent of small businesses used business loans to establish or expand their company. Small business loans are an essential element of economic growth for companies that are just starting or that are ready to take the next step.
There are a variety of business loans available in Kansas City, including:
Term loans: Term loans let your company get the amount of the loan upfront and pay it back, including interest, over a set term. These loans can be secured by collateral or unsecured.
Business lines of credit: Lines of credit are similar to credit cards and have an approved maximum limit and interest rate. Your business is only charged interest on money you use from the line of credit.
Equipment loans: These loans usually involve a down payment and are used to purchase equipment your business needs. The purchased equipment is used to secure the loan.
Accounts receivable loans: If your company needs cash quickly, you can get an accounts receivable loan, which is secured by money owed to your business. The loan is paid as customers pay their accounts receivable.
SBA-backed loans: These loans are partially guaranteed by the Small Business Administration (SBA), a federal agency.
After you decide which loan is best for your company, you’ll need to choose the amount you wish to borrow. You may also need to prepare a business plan and create a presentation for the lender. Many banks in Kansas City will also require proof of need for the money and a detailed look at how you plan to use the funds. Having an in-depth business plan helps with this process.
Once you’ve created your business plan and established how much money you require in loans, you will need to make an appointment with a loan officer at the institution of your choice. While many institutions in Kansas City have similar offerings, there are some differences to look for when choosing a company.
The amount you’ll pay in fees will vary among lenders, which is why you should get a few cost estimates before you decide on one company. Some of the most common fees you will encounter when taking out a business loan in Kansas City include:
SBA guarantee fees
Late payment fees
While many of these things cannot be negotiated, it’s important to understand the fine print in your loan documents. Every type of loan may have different fees, and they could vary from borrower to borrower. Fees for SBA loans under $150,000 are set at zero.
A good way to compare business loan offers is to look at the annual percentage rate (APR). Unlike interest rates, the APR includes any fees you incur with the loan. Most traditional lenders (banks and credit unions) offer APRs ranging between 4 and 13 percent. If you have a poor credit history, you might choose to go with an alternative lender, which may charge a higher APR.
If you need guidance and support, you can visit local SCORE chapters, which is a non-profit organization made from retired business executives who volunteer their time and effort to help small business owners. The University of Missouri-Kansas City also has a training program called ELEVATIONLAB that offers community members a chance to learn from students and professionals in the area.
Seek Capital offers business loans with no restrictions. The underwriting process can happen in hours, letting you get your money quickly. Seek Capital has a funding approval rate of more than 92 percent and provides loans ranging from $5,000 to $500,000. Kansas City customers appreciate how the company works to create a lasting relationship with businesses.
Imperial Advance lets you submit your business loan application and receive offers with no obligation or pressure. The company has loan specialists to offer advice, and it distributes loans within 24 hours. Imperial Advance maintains an A+ rating from the Better Business Bureau. Reviewers in Kansas City say the lender truly understands the needs of small businesses.
National Business Capital’s free online application connects business owners in Kansas City to more than 75 lending institutions that bid for their loan. Each customer is paired with a financial advisor who helps them choose the best offer. The financing is then available within a day.
Arvest Bank offers a variety of business financing options to fit all needs. Arvest is a preferred SBA lender, meaning it has the highest level of autonomy with SBA loans. Arvest also offers lines of credit and real estate support. Customers in Kansas City appreciate the bank’s courteous and knowledgeable employees.
CommunityAmerica Credit Union
M-F: 9am - 5pm, Closed Sat and Sun
A local Kansas City company, CommunityAmerica is a trusted name in banking. It offers a wide variety of business loans, including equipment loans and lines of credit. Reviewers state that CommunityAmerica’s commitment to the Kansas City community is evident and its customer service is top-notch.
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