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Small Business Loans in Connecticut (2020 Update)
There are almost 350,000 small businesses in the state of Connecticut. Connecticut is one of the most progressive states in the country for entrepreneurship. Roughly one in every other company owner established in Connecticut will need to take out a business loan at some point in their career. Working capital loans are necessary when a company needs a certain level of financial backing to support their services.
Why Connecticut Business Owners Take Out Loans
Connecticut business owners require small business loans because they need a large lump sum of cash to either keep their company going or to expand their business to increase client flow. As long as the business loan is being used for company needs, there is no reason to forgo getting the cash you require. The issue comes when an entrepreneur takes out a loan and doesn’t pay it back on time or uses the money for non-business-related expenses. This has been the ruin for many Connecticut companies in the past.
Applications for a Business Loan
To apply for a loan, you’ll need a lender or bank that works with corporations. Not all banks offer small business loans, so consider this before making a trip to your local banking branch. The lender offering the loan will have an interest rate attached that can range from five to eight percent. The higher the interest rate, the more expensive your loan payments will be and the longer the loan will take to pay off. Don’t be afraid to interview the lender to determine if they’re the right fit for you. After all, you’re the one who’ll be paying for the loan for years to come, so you need to know you’re getting the best rate.
During the application process, expect the lender to scrutinize your business assets and future financial plans. The bank wants to know why you need a loan and where the money will be used. They also need to know that your company will be a success and has a small chance of failure. Unlike personal loans, the owner’s credit score isn’t as important as the business’s capital.
How to Repay a Business Loan
Repayment of your business loan will begin immediately upon receiving the money. You should have an idea of how much your loan payments will be when applying for the loan. Interest is integrated into your loan payments, and you can choose to have automatic deductions taken from your account to pay the lender. Depending on your term length, you’ll have the loan paid off in just a few years. If you should ever be late on payments, you’ll accumulate late fees and delinquencies that go against your company’s credit report.
Banks in Connecticut That Offer Small Business Loans
Below are the most highly rated banks for small business loans in Connecticut:
Once Called Naugatuck Savings Bank, Ion Bank has been in the banking business for nearly 150 years. It was founded and remains headquartered in Naugatuck where it was first named after.
Thomaston Savings Bank
Established in Thomaston, Connecticut in 1874, Thomaston Savings Bank has a wide array of services especially made for businesses to make the financial side of it more smooth-sailing.
Connecticut Community Bank National Association
The Connecticut Community Bank NA was founded in 1998 in Norwalk. In its 20 years, it has grown its assets, even assisting small businesses through loans summing up to $103 million in just a year.
Fairfield County Bank
Founded in 1871, Fairfield County Bank has since expanded. Today, it has 16 branches across Fairfield County and many others in other counties of the state.
Quinnipiac Bank and Trust
Quinnipiac Bank and Trust was founded in 2008 but has been acquired by Bankwell Bank in 2014. However, it still offers the same persona and commercial banking products and services in its branch.
The First National Bank of Suffield
Headquartered in Suffield where its first branch opened, The First National Bank of Suffield was established in 1864. Today, it has branches all over the state, bringing the same brand of local service it has brought for more than 150 years.
Top Cities in Connecticut and Their Lenders
Connecticut is on the smaller end of states in terms of population, but it doesn’t mean the local business culture isn’t thriving. This beautiful New England state attracts people from around the country because of its scenic coastline and beautiful winters. The state is one of the best examples of Northeastern architecture and success – the standard of living in Connecticut is quite high when compare to much of the rest of the country.
If you’re planning on starting a business in state, it’s important that you have a firm understanding of which cities to live in. Connecticut doesn’t have many large cities, so your options are quite limited. This shouldn’t deter you, as each of the major cities in Connecticut has more than enough infrastructure to ensure that you’re able to start a successful small business. This portion of the article is dedicated to outlining the top cities in Connecticut, as well as their small business lenders. Check them out below!
Bridgeport was traditionally an industrial powerhouse. But the decline in American manufacturing led Bridgeport to start diversifying its economy. The city now largely consists of different services industries. As the largest city in the state of Connecticut, much of the industry in Bridgeport services the surrounding regions. If you’re thinking of starting a business in Bridgeport, the lenders below are you best options in the area:
CEDF is a small, local lender that helps people throughout the state obtain funding. They’re our top pick in Bridgeport because of the variety of different funding options they have available. If you’re looking for term loans, startup loans, SBA loans, or any other form of small business loan, this should be your first port of call in Bridgeport.
Aspen Finance is an alternative form of small business financing that pairs borrowers with lenders who are investors. This allows you to be approved for a small business loan with less requirements than normal. The company also helps businesses improve their credit scores.
New Haven, Connecticut
New Haven is the second largest city in the state of Connecticut. Like Bridgeport, New Haven also has a large services sector which takes up the majority of the local economy. Other common industries include transportation and mining. If you’re thinking of starting a business in New Haven, you’ll have everything you need right at your fingertips. Below are the top lenders in the New Haven region:
Start Community Bank
Start Community Bank is our top pick in the New Haven region because of its expertise on the local economy. This bank has been working with individuals in the area for years – they’re well aware of what you need to succeed. They also provide other banking services.
Crefcoa is a lender in the Northeast that provides commercial loans to companies throughout various states. They have a local presence in the New Haven region – they’re a great team to partner with if you want a lender with serious financial power.
Hartford might not be the largest city Connecticut, but it does happen to be the capital of the state. The city traces its origins back to colonial times – it’s one of the oldest urban areas in the region. Hartford has a long tradition in the insurance industry – plenty of insurance companies have large offices in the area, and have done so for decades. Much of the local economy is also driven by the government jobs in the area. If you’re thinking of starting a business in Hartford, check out the lenders we recommend below:
Farmington Bank is our top choice in Hartford – they have the reputation to take your business to the next level. They’ve worked with countless business owners in Hartford to provide a range of different financial solutions.
Again, Crefcoa is an extremely popular lender with many of the borrowers in Hartford as well. They’re one of your best options in Hartford or New Haven.
Stamford is one of the most scenic area in the state. It also happens to be a business epicenter. The area is well-known for having several high-profile businesses headquartered in the area. If you’re looking to start a business in an area that understands commerce, Stamford is a good place to start. Our favorite lender in Stamford is listed below:
Siena Lending is highly reputable lender that provides finance to businesses in the city and surrounding regions. The only downside with Siena Lending is that they often prefer to work with businesses with decent cash flow. You’ll need to speak with them about eligibility.
Waterbury is a small city in Connecticut that’s only about an hour drive from New York City. The region benefits from its proximity to the nation’s largest city. If you’re thinking of starting a business in Waterbury, you should consider the lender listed below:
Waterbury Financial LLC
Waterbury Financial LLC is a commercial lender that specializes in providing finance to small business owners. They’re located right in the middle of town – you can speak to their on-site staff anytime you need!
Remember, some of these companies or banks are very specialized and may only handle SBA loans or a business line of credit. Ask them about any special programs for minorities or women. Also ask for information about business grants for startups if that interest you. If you bad credit don’t worry as there still may be other alternative lenders willing to work with you.
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