Find the Best Business Loan Companies in Buffalo, NY

Types of business loans in Buffalo

Buffalo residents looking to start, expand, or relocate their businesses in the city often turn to business loans to help them purchase property, materials, office supplies and equipment and to use as working capital. The most common business loans available to Buffalo residents are the following:

• Commercial mortgage loans: Whether you’re building property or buying property, a commercial mortgage loan can help finance the physical space you need to conduct business. Commercial mortgage loans have terms from five to 20 years and higher interest rates than residential mortgages.
• Business lines of credit: A business line of credit allows borrowers to pull out cash to use toward business expenses. This helps in situations where you need to buy something that can’t be put on a card. Business credit cards are another option for Buffalo residents. Credit cards are easier to apply for than lines of credit and allow business owners to spend only what they need.
• Equipment financing loans: Some companies specialize in equipment financing. They offer loans designed specifically to pay for industry equipment and machinery. Business vehicle loans can be used to buy commercial vehicles that you use to transport goods and services around the Buffalo area.
• Merchant cash advances: A merchant cash advance is a way for business owners to get a large lump sum in a short amount of time. It is relatively easy to qualify for, and repayment terms are based on future credit card sales. When credit card sales are up, you’ll pay more toward your repayment plan. Interest rates are higher on merchant cash advances than on other forms of business borrowing.
• Startup business loans: If you’re starting your first business, you may qualify for a startup business loan. There are many specialized loans and programs designed to help entrepreneurs fund their dream business.
• SBA loans: The Small Business Administration is a federal government agency that guarantees loans to small businesses. It sets guidelines for loans that are made by partnering lenders in Buffalo. Loans can range from as little as $500 to as much as $5.5 million and can be used toward working capital or fixed assets.
• Business term loans: There are two different types of term loans: short-term and long-term. Short-term loans allow business owners to get quick funds and pay them back over three to 18 months. Long-term loans have lower monthly payments, come in higher amounts and can be paid off in two to 10 years.

How to get a business loan in Buffalo

Getting a loan in Buffalo can look different for business owners depending on how much they’re asking for, their industry, their credit history, their work experience and their financial status. However, there are a few things that stay consistent across the board when it comes to applying for a business loan in Buffalo:

• Credit score: The type of loan you qualify for will depend on your credit score. Different loans have different credit score minimums. For example, you usually need a score of 620 or higher to qualify for an SBA loan, but business owners with a score of 550 or higher may qualify for other forms of borrowing. The higher your credit score, the more flexibility you have with down payments, interest rates and repayment terms.
• Documentation: Lenders will need insight into your business plan and financial situation to determine what you qualify for. To do this, they will require specific documentation. You can expect to have to provide your bank statements, business plan, tax returns and current balance sheet.
• Collateral and fees: Before you sign for a business loan, it is important to understand what the collateral requirements are. Some loans require collateral against the loan, such as real estate, vehicles, cash savings or other valuables. Also, ask about fees such as origination fees, late payment fees and prepayment penalties.

Buffalo business loan FAQ

Do Buffalo banks give loans to start a business?

Yes, many financial institutions, including banks and credit unions, offer loans for Buffalo business owners.

What is a good business loan interest rate?

Interest rates depend on how much you are borrowing, your payment terms, your credit score and other factors. The average interest rate for an SBA loan is between 6% and 10%. Traditional bank loans can carry an annual percentage rate between 4% and 14%.

What qualifies you for a small business loan?

Different lenders have different requirements to qualify for a small business loan. Most lenders look at credit scores, the age of the business, cash flow and income, your amount of debt, what you can offer as collateral and the type of business it is.

What business development resources exist in Buffalo?

For resources in starting and running a business, check out SCORE Buffalo Niagara and the New York Small Business Development Center. Both organizations provide informational resources for local business owners.