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Mississippi Small Business Loans

More than 250,000 small businesses were in operation in Mississippi in the 2018 fiscal year. The state has seen steady economic growth over the last few years, with an annual growth rate of 2.7%. However, this rate of growth remains slower than the U.S. average of 3.4%.

Mississippi
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist
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Mississippi has a flourishing economy, with a diverse buying market. The state hosts some attractive business loan options and grant schemes. According to Small Business Administration statistics, more than $602.2 million in loans (valued at under $100,000) was issued in Mississippi in 2019 alone. The following guide looks at some of the best loan options currently available for small businesses in Mississippi.

Best Options for Mississippi Small Business Loans, According to a Recent Analysis

Revolving Loan Fund Program

Business owners in Mississippi who have been struggling to receive financial aid or loans from traditional banking schemes can turn to the Economic Adjustment Assistance Revolving Loan Fund Program. Under the program, EDA issues grants to eligible recipients to enable small businesses to expand and generate new employment opportunities.

The program has a combined investment of $560 million and has to date delivered more than 500 RLFs to businesses across the U.S. and in Mississippi as well. To date, RLF loans have leveraged over $17 billion in additional investment, allowing for the creation or retention of 690,000 jobs.

Mississippi Minority Business Enterprise Program

Mississippi strives to retain its diverse economy and minority-owned businesses. As such, the state has introduced the MS Minority Business Enterprise, which assists a wide range of businesses from various industries in Mississippi.

The MS Minority Business Enterprise program offers funding for minority-owned businesses, including women:

  • Loan amounts can reach 50% of the total project cost or $250,000, whichever is less
  • Funds can be used for fixed assets, inventory, or staff
  • The loans can have a maximum of 7-year term for working capital, 10 years for equipment and machinery, and 15 years for buildings and land
  • The interest rate can range from 2% below to 2% above the Federal Reserve Discount Rate

The Rural Business Enterprise Grant Program (RBEG)

RBEG is a subdivision of the U.S. Department of Agriculture. Its aim is to assist small businesses in rural and remote areas. RBEG has a solid standing reputation for helping thousands of businesses across Mississippi. Here are some features of the program:

  • There’s no maximum grant amount - the grant amount you are eligible for will vary according to your risk factor and the type of business you're looking to open.
  • People can apply from any rural area.
  • Loans aren't limited to larger towns, state agencies, nonprofits, etc.
  • Funds are directed to businesses that find themselves in areas with less than 50,000 residents
  • Incentives and extra grants are available for businesses in more populated areas.

U.S. Small Business Administration 504 Loan Program

The SBA 504 loans are some of the most trusted loans available for small businesses across America. With affordable interest rates and a focus on assisting small businesses in debt, liquidity, or simply with startup capital, 504 loans are an initiative that has helped thousands of small businesses expand in smaller and slow-growing states such as Mississippi.

Key features of the 504 loan include:

  • 504 loans have a maximum loan amount of $5,000,000.
  • Eligibility to apply is based on:
  • Owning and operating a for-profit U.S. business
  • The business has a net worth of less than $15 million
  • Applicants should have a net income of less than $1 million after federal tax
  • The loan can not be used for:
  • Repaying debt, paying for working capital, or investment in rental real estate. These might limit some business owners, but the 504 loan scheme is still a reliable option.

Small Business Loan Guaranty Program or SBLGP

This program is another federal government initiative aimed to help businesses under the 2010 Small Business Jobs Act. Mississippi received $13,168,350 from this program (of the $1.5 billion federal capital) to get small businesses off the ground and operational.

The Loan Guaranty Program made available in Mississippi provides the following eligibility criteria for small businesses:

  • Employ less than 250 full-time employees and make fewer than $7,000,000 gross revenue or $1,000,000 in profit after taxes
  • Minimum loan amount of $50,000
  • Maximum loan amount of $500,000
  • Maturity rate of 15 years
  • Interest rates negotiated between Mississippi-approved financial institutions and the small business.

Additionally, the loan program clearly specifies how business owners are allowed to spend their money. Yet, in most cases, applicants can receive a loan guarantee of 50% for working capital and 80% for credit and finance fixed assets.

Summary Table

Loan ProgramProsCons
Revolving Loan Fund Program
  • Federally and state-supported
The funds must be used strictly for economic development purposes
Mississippi Minority Business Enterprise Program
  • Great incentives


 

  • Funds can be used for working capital, equipment and machinery, and building and land acquisition
More formal loan providers and can sometimes charge higher interest rates
There are only a select few target industries that funds are available to
RBEG Program
  • No maximum grant requirements


 

  • A great option for startup owners
Only available to more rurally located small businesses
SBA 504 Loan Program
  • Trustworthy


 

  • Federally supported.
The maximum amount is $5 million
Limitations on profits and net income to remain compliant
SBLGP
  • Great for small to medium-sized businesses


 

  • No minimum amount
A maturity rate of 15 years can have lasting effects on small business owners

Top Online Mississippi Small Business Loan Options

Although the loans, mentioned above, are widely available for many Mississippi-based businesses, there are several online loan options that are worth looking into.

In this section, we outline the top online Mississippi small business loan options:

1. Fora Financial

 Fora Financial

Even though ForaFinancial was only founded in 2008, the lender has quickly earned an excellent reputation as an alternative fintech lender providing quick and easy small business funding. The lender offers two main types of loans to Mississippi-based small businesses: short-term business loans and merchant cash advances. With both types of financing, you can expect to receive the funds as quickly as in 24 hours.

Pros
Funding available in 24-72 hours
Loans available to a wide range of industries
Credit score isn’t important for approval
Cons
Interest rates can be high
Other fees in addition to interest rates

With a small business loan from ForaFinancial, you are welcome to use the funds as you see fit. Both merchant cash advances and short-term business loans can range between $5,000 and $500,000 in value, with a factor interest rate ranging between 1.1 and 1.3.

Short-term loans must be rapid over 4 to 15 months, which might be too short for some applicants. The good news is that merchant cash advances are a lot more flexible and don’t come with a predefined term length.

2. FundBox

banner Fundbox

Since 2013, Fundbox has been providing fast business funding to small business owners throughout the United States. The lender offers two main financing options: business lines of credit and term loans. Short-term lines of credit offer on-demand funding that scales according to your business need. Term loans, on the other hand, present a single lump sum of money to be repaid over a specified time period. This form of funding is ideal for large one-time purchases or business upgrades.

Pros
Fast turn-around
Simple application process
Low minimum credit score
No monthly minimums
No fees aside from interest rate
Payments can be debited automatically
Cons
Relatively small maximum loan amount
High interest rates

Overall, Fundbox term loans and lines of credit come with shorter terms and lower borrowing limits as compared to other similar products on the market. With both options, the loan amount can range between $1,000 and $150,000, to be repaid on a weekly basis. The APR reaches 18% in case of a term loan and 20% with a line of credit.

With a business term loan, you would have an option to choose between 24- and 52-week repayment terms. Lines of credit are shorter-term, with repayment terms varying between 12 and 24 weeks.

The Bottom Line

If you are looking for an online lender with a fast, automated application process with minimum supporting documentation requirements, Fundbox is the ideal option for you. While the loan terms and limits offered by Fundbox are rather rigid, you can expect higher loan amounts at more affordable interest rates if you become their repeat client.

3. OnDeck

banner OnDeck

With more than $13 billion in loans provided to small businesses, OnDeck is a digital financial platform that makes it easier and faster to receive approval and initial loan payouts. The platform provides only two types of loans: business lines of credit and term loans. OnDeck is known for its very clear loan terms and few associated restrictions. This means that you can use their small business loans for virtually any business purpose you want, from covering equipment purchase or new premises, to paying your tax bill and employee salaries.

Pros
Easy online application
Fast approval decisions
Funding available as quickly as in 24 hours
Discounts for repeat customers
Bad-credit applicants are welcome
Personalized approach
Commitment to a partnership approach
Cons
Daily repayment structure
Hard to find information on interest rates
Slow response times in some cases

With a business line of credit from OnDeck, you can draw a specified amount of funding as needed. The credit limits range between $6,000 and $100,000, with a term length of anywhere between 3 and 18 months. While this loan option is attractive due to its flexibility, it comes with somewhat high interest rates and maintenance fees. As such, you can expect to pay an APR of anywhere between 10.99% and 35.2%.

With a term loan, on the other hand, you can receive a one-time amount of $5,000 - $250,000, to be repaid over 3 to 18 months. The APR can vary depending on how soon you pay off the loan, ranging between 11.98% and 46.06%.

The Bottom Line

Of course, OnDeck small business loans aren’t the cheapest out there. However, somewhat high APR is offset with a fast and easy application process, quick fund disbursement, and excellent customer service along the way.

4. Credibly

banner Credibly

Working capital loans, merchant cash advances, lines of credit, long-term business expansion loans, equipment financing loans, SBA loans, and invoice factoring loans are among the seven types of small business loans offered by Credibly. Without a doubt, the most popular option is a working capital loan. Operating in a slightly different manner than a traditional term loan, working capital loans are easier to budget for and can be used to fund short-term business needs. Here, rather than paying an interest rate, you will be charged a lump sum calculated as a percentage of the loan.

Pros
Low credit score requirements
Numerous loan options available.
Attentive customer service representatives
Easy online application process
Borrowing limits are high
Available to high-risk industries
Cons
Daily or weekly repayment terms
Interest rates can get expensive
Loans come with origination fees

Credibly believes that small business loans should be available to a diverse range of customers. As a result, the company has lax eligibility criteria, requiring only a 500 credit score to apply.

The specific loan features vary according to the type of loan issued. Working capital loans, for example, can be worth up to $400,000, while business expansion loans range from $150,000 to $5 million. The repayment terms also vary significantly; for example, short-term working capital loans must be repaid over 6 to 18 months, whereas longer-term business expansion financing can have a repayment period ranging from 3 to 10 years.

The Bottom Line

If you are looking for a trusted and reliable alternative lending source in Mississippi, loan options from Credibly are worth taking a look at. When working with Credibly, you will enjoy their applicant-friendly eligibility requirements, quick and simple online application process, and friendly and supportive customer service.

Other Resources for Mississippi Small Businesses

There are additional resources small businesses in Mississippi can make use of to help them in areas that are not necessary all about finances. For example, your business may want to learn more about how to retain well-trained staff and how to network with business owners in their local area.

Mississippi Small Business Development Center

The Mississippi Small Business Development Center is an accredited member of America’s Small Business Development Center, aiding businesses in need of assistance in the state of Mississippi.

The development center has assisted small businesses affected by natural disasters, pandemics, and similar issues. In 2019 alone, the development center managed to start 207 new small businesses and created an additional 709 new jobs.

These efforts accumulated nearly $77 million in capital formation and contributed $14 million to new sales growth for the state.

Mississippi Procurement Technical Assistance Program (MPTAP)

As an integral part of the Mississippi Development Authority, Mississippi Procurement Technical Assistance Program serves as the chief economic development agency within the state of Mississippi.

MTAP’s primary mission is to enhance economic development and national defence of the state by helping local businesses in obtaining local, state, or federal commercial and government contracts. The organization provides its services free of charge to local businesses.

Mississippi Enterprise for Technology (MSET)

Mississippi Enterprise for Technology is a private, non-profit organization that works to stimulate the state’s industrial growth, support new business start-ups, and attract more companies to Mississippi. Formed through a joint effort of NASA, the Mississippi Development Authority, and Mississippi’s universities, the MSET aims to create more high-skill, high-wage jobs within the state.

Some of the services offered by the Mississippi Enterprise for Technology include assistance in identification of relevant technologies suitable for your business, finding potential markets for new technologies, and support through the licensing/agreement process. The MSET also assists small business owners in finding potential buyers and other small business resource partners.

Hancock Chamber Business Resource Center

As a business partner with many organizations, the Hancock Chamber of Commerce offers a thorough list of federal, state, and local resources to help Mississippi small businesses.

One of them, the Hancock Chamber Business Resource Center provides useful information and resources for creating business plans and obtaining a small business loan in Mississippi. The Resource Center also lists relevant referrals for important information necessary to help start and expand local businesses.

How to Prepare for a Mississippi Small Business Loan

Once you review your Mississippi small business loan options and find the one that best fits your financial needs, it’s time to prepare your application.

Here's how you can prepare for a Mississippi small business loan:

Create a Business Plan

Banks and other financial institutions want to see your idea on paper, well-detailed and clearly explained.

Sell your business idea in the best way possible by including financial budgets, service and product offerings, and business's financial statements. You would also need to explain how you would allocate the funds you receive in the development phases of your business.

Your business plan is one of the most crucial aspects of your loan application, as it allows those who are willing to give you money to understand why and how you’ll be operating your new business.

Know Your Loan

Know what type of loan you're applying for and why. Read the fine print of each loan option. This will help ensure you're aware of the ins and outs of each loan plan. You should be able to repay your loan, without struggling financially.

Check Your Credit Score

Check the credit score of your business. The credit score qualification requirements can vary based on the type of loan you apply for, the type of lender you choose to work with, and the location of your business.

Have Options

Make sure to have more than one option. Look for loan plans that give you peace of mind and offer the best repayment options.

Mississippi Business Loans: The Bottom Line

From federal- and state-funded loan programs to alternative online lenders, the state of Mississippi has a lot to offer to support local small business owners. With a variety of loan options available, Mississippi entrepreneurs will need to conduct thorough research to find a loan plan that works best for their business.

The process of finding and applying for a loan can be daunting, but knowing how much you need to borrow and how much you can afford to pay back can make it a whole lot easier. So, to ensure the ultimate success of your business venture, start by defining your goals, evaluating your financial situation, and carefully researching your loan options.

About the Author

Tetiana Sitiugina-Babiuk

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

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