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Illinois Small Business Loans: Best Local and Online Options

Many startups fail before they ever have a chance to gain traction due to difficulties securing business financing. Entrepreneurs looking to start their own business in Illinois can consider a number of different small business loans that could help them get started.

Illinois Small Business Loans and Grants
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist

Reviewed by: Carrie Pallardy, Freelance Writer and Editor

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Small businesses make up 99.6% of businesses in the state, employing a total of 2.5 million people. The Community Reinvestment Act requires large banks to report small business loans, and in 2019, banks reported granting $3.3 billion in loans to businesses operating in Illinois with $1 million in revenue or less.

 

Top 3 Options for Small Business Loans in Illinois

Below you can find three Illinois small business loan providers to consider when looking for funding for your startup or new business.

1. Illinois Bank & Trust

Backed by the nation-wide Heartland Financial USA, Illinois Bank & Trust is dedicated to providing local financial services for personal and business needs. Illinois small businesses can come to Illinois Bank & Trust to explore solutions for new equipment, additional office space, or a business line of credit. Illinois Bank & Trust offers programs such as :

  • SBA 7(a) loans. The bank’s 7(a) program provides long-term loans to help businesses cover expenses associated with expansion, restructuring, development, refinancing, and more. 
  • SBA 504 loans. This initiative primarily focuses on larger purchases, such as equipment,real estate acquisition, and ground-up construction.
  • SBA Express loans. SBA Express loans offer an accelerated path to financing for small businesses looking for working capital. 

2. Illinois Small Business Emergency Loan Fund

The Illinois Department of Commerce and Economic Opportunity (DCEO), in partnership with the Illinois Department of Financial and Professional Regulation (IDFPR), established the Illinois Small Business Emergency Loan Fund. The fund offers the state’s small businesses affordable, low-interest loans of up to $50,000. The loan must be used for working capital, with at least 50% of loan proceeds applied toward payroll or other compensation schemes, such as wages, salaries, paid leave, tips, or group healthcare benefits.

The Illinois state government has also established the $636 million Business Interruption Grants (BIG) program to provide much-needed relief for small businesses that have suffered due to the COVID-19 pandemic. The BIG program allows eligible small business owners who have already received loans to convert them to grants in order to offset the significant losses encountered due to the COVID-19 pandemic.

3. Byline Bank

If you require a large, government-backed business loan, Byline Bank could offer some good options for you.

Byline Bank offers:

  • SBA 7(a) loans. The bank offers up to $5 million in SBA 7(a) loans. Borrowers can access 25-year terms for real estate and 15-year terms for non-real estate debt.
  • SBA 504 loans. The bank offers SBA 504 loans for small businesses that need long-term, fixed-rate financing for expansion or modernization. These loans range for $1.5 million to $10 million. 
  • SBA CAPLines. SBA CAPLines are revolving lines of credit that help small businesses manage their cyclical cash flow. The bank offers up to $5 million in loans. 
  • USDA Loans. The bank offers $1 million to $10 million in USDA loans, which are meant to provide rural communities with business financing.  

 

Summary of Top 3 Illinois Small Business Loan Providers

Loan Provider Type of FinancingLoan AmountInterest RateLoan Term

 

Illinois Bank & Trust

SBA 7(a) program

SBA 504 loans

SBA Express loans

VariesVariesLong-term
Illinois Small Business Emergency Loan Fund

Small Business Emergency Loans

Business interruption Grants

Up to $50,000

 

Varies

 

Varies
Byline Bank

SBA 7(a) loans

SBA 504 loans

SBA CAPLines

USDA Loans

$1 to $10 million Varies Up to 30 years

 

Top Online Illinois Small Business Loan Options 

When looking for a small business loan in Illinois, make sure to consider all the available options, including online loan providers. The top online business loan providers in the state include:

1. Kabbage - Best for Fair Monthly Profits

Kabbage, an online lender backed by American Express National Bank, offers business lines of credit starting at $2,000 and going up to $250,000. Loan terms are six-month, 12-month, or 18-month. Rates are 2% to 9% for six-month loans, 7.5% to 18% for 12-month loans, and 15.75% to 27% for 18-month loans. 

Pros
Straightforward application
Fair monthly revenue required
Monthly repayment schedule
No prepayment penalties
Cons
Confusing fee structure
Personal guarantee required

To qualify for a business line of credit with Kabbage, borrowers must be at least 18 years old and have started their business at least one year ago. Additionally, loan applicants must have a credit score of at least 640 and average monthly revenue of $3,000 or more. 

Kabbage does not charge any origination fees or prepayment penalties. Borrowers will pay a monthly fee for each month there is an outstanding balance on their loan. After qualifying for a loan, borrowers will be able to view which loan terms are available to them. 

The Bottom Line

Kabbage offers small business owners access to capital after a simple application process. This lender may be a good option for startups with relatively low revenues or cyclical businesses that need funding during slower periods.

Try Kabbage
Learn more about Fundbox in our comprehensive review.

2. Fundera - Best for Startup Loans

banner_ Fundera

Fundera is a direct lender and a loan marketplace. It may fund your small business loan, or it may match you with another lender on its platform. The maximum loan amount available at Fundera is $600,000, and monthly repayments can be spread out over a five-year period. APR ranges from 7% to 30%. 

Pros
Competitive rates
Flexibility
Soft credit check
Connections to many lenders
Cons
Unclear eligibility qualifications
Potentially long funding times

At Fundera, personal advisers are devoted to making the online application process as simple as possible. Fundera requires much less supporting documentation than conventional lenders, making the application and approval process much faster than usual.

The payment system is set up from the very beginning, which makes it easier for you to plan your budget and cash flow. However, there are certain trade-offs. While Fundera offers a higher lump sum amount, it usually requires a collateral.

The Bottom Line

Fundera can be a good option for Illinois small businesses that want to compare offers from multiple lenders. Plus, people with lower credit scores or relatively short credit histories may find options through Fundera.

Try Fundera

Learn more about Fundera in our comprehensive review.

3. Fundbox - Best for Lines of Credit

Banner funbox

Fundbox offers small business term loans and lines of credit. You can receive a loan of $1,000 to $150,000 and repay it over 24 or 52 weeks. Fundbox has interest rates that start at 8.33% for 24-week terms. The lender offers lines of credit for $1,000 to $150,000 with interest rates starting at 4.66%. Terms range from 12 to 24 weeks for lines of credit. Both term loans and lines of credit have weekly repayment periods. 

Pros
Easy application
Fast funding
Low credit score requirements
No prepayment penalties
Cons
Small loan limit
Interest rates can be high

Even if you are a small business with a short credit history, Fundbox can often offer you a loan. Every loan offered remains available for 30 days; after you accept the loan terms and conditions, you can expect to receive the funds as soon as the next day.

The application process with Fundbox is simple. First, the lender will ask you for some basic information about your business. Next, you can connect your business bank account or accounting software to Fundbox’s platform. This makes the application process faster by providing the company with direct access to all the information necessary to make the funding decision.

If you can pay off the loan early, you won’t encounter any penalties. Fundbox also does not charge an origination fee. 

The Bottom Line

The process of obtaining a loan or line of credit with Fundbox is easy. With lower loan and credit amounts, this lender may be best for Illinois small businesses looking to finance a one-time purchase, such as a piece of new equipment.

Try Fundbox

Learn more about Fundbox in our comprehensive review.

4. OnDeck - Best for Commercial Mortgages

Banner Ondeck

OnDeck offers term loans from $5,0000 to $250,000. APR begins at 35%. However, the maximum maturity period is only 18 months, which can be discouraging for businesses who wish to spread their loan repayment over a lengthier period of time. OnDeck has daily or weekly repayment periods for its term loans. 

This lender also offers business lines of credit ranging from $6,000 to $100,000 with APR starting at 35.9%. The term length for OnDeck lines of credit is 12 months with automatic weekly payments. 

Pros
Easy application process
Fast funding
Low credit score requirements
Helps businesses build credit
Cons
Requires a personal guarantee
Interest rates can be high

OnDeck might be a good fit for a young company without a lengthy track record. The lender isn’t required to report your account’s good standing to financial agencies, but it still does. This can prove beneficial for your new company in the long-run, especially if you need to establish a good credit history.

The Bottom Line

OnDeck may have higher interest rates than other lenders, but it does offer opportunities for small businesses looking to get funding without a high credit score or high annual revenues. Plus, the lender has an easy application process and a quick turnaround time for funding.

Try Ondeck

Learn more about Ondeck in our comprehensive review.

Additional Financial Resources for Small Businesses in Illinois

When looking for a small business loan in Illinois, you can explore alternative resources in addition to conventional lenders. 

1. Illinois Venture Capital Association

A venture capital syndicate presents a great unconventional financing option available to Illinois residents. Such syndicates typically comprise a group of investors who seek to help new businesses in various fields. As with other financing options, there is no guarantee that you will, indeed, find funding, but it is definitely worth trying! You can start by learning more about the Illinois Venture Capital Association and their requirements.

One of the unique benefits of venture capital funding is the expertise and experience that comes along with it. Investors will provide valuable insight and guidance for your company because their profit depends directly on your company’s success.

Third-party involvement in your business is one potential drawback of venture capital funding. Many times, small business owners are self-reliant and independent, and outside opinions on how the company should operate can become an issue. Make sure to consider all the pros and cons of this funding option.

2. Advantage Illinois 

Advantage Illinois is a participation loan program (PLP) funded by the State Small Business Credit Initiative, which is a part of the Small Business Jobs Act signed into law in 2010. The program is designed to help small businesses launch, grow, and create new jobs. 

You can apply for an Advantage Illinois loan with a number of different participating lending institutions. Businesses can access PLP term loans or revolving lines of credit through the Advantage Illinois program. Businesses approved through the Advantage Illinois program are able to use the funds for start-up costs, equipment, inventory, working capital, business procurement, and more. 

Other Resources for Illinois Small Businesses

Beyond financial assistance, starting and growing a small business comes with a lot of challenges. The resources below provide valuable information and guidance on various aspects of running your own business.

Opening a Business

Contract Opportunities

Accessing Financing


 

How to Get a Small Business Loan in Illinois: Step-by-Step

Getting a small business loan in Illinois is not as difficult as it might seem. Below are some general steps you need to follow to apply for a small business loan in Illinois:

  • Develop a business plan
  • Perform a strengths, weaknesses, opportunities, and threats (SWOT) analysis
  • Find lenders working with startups and young businesses
  • Improve your credit score
  • Examine alternative options like business credit cards or crowdfunding
  • Prepare the paperwork to qualify for specific grants or loans
  • Collect detailed invoice/operational financials
  • Perform a market analysis
  • Organize a predictive analysis
  • Research funding alternatives

Final Words

Among the most common difficulties faced by young businesses are the initial costs. Many individuals with ambitious business plans simply lack the resources necessary to implement their ideas.

Luckily, the state of Illinois has multiple business loan and grant options available to support entrepreneurs. When considering available Illinois small business loans, make sure to carefully weigh the advantages and risk profile of each one. If you fail to find a suitable grant or loan through a traditional avenue, there are also numerous online financing options waiting to be explored.

About the Author

 Tetiana Sitiugina-Babiuk

Written by: Tetiana Sitiugina-Babiuk

Financial Sector Specialist and Content Strategist

Independent writer, content strategist, and financial sector specialist. Tatiana has an extensive experience in working with financial institutions such as Bank of Canada and Risk Management unit at FinDev Canada. She holds an MA in Financial Risk Management from the University of Toronto.

More about me
Carrie Pallardy

Reviewed by: Carrie Pallardy

Freelance Writer and Editor

Carrie Pallardy has six years of experienceas as a dedicated freelance writer and editor. She covers a wide variety of topics, including personal finance, insurance, and cybersecurity. Carrie has written for Investopedia, Policygenius, and more.

More about me

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