Maryland Small Business Loans
One of the wealthiest states in the nation, Maryland is considered one of the best U.S. states to live and work in. Being one of the 13 original colonies, Maryland is also among the nation’s oldest states; however, that doesn’t mean it rejects the new. Its largest city, Baltimore, was named by Forbes as one of the “Top 10 Rising Cities for Startups” in 2018, and Governor Larry Hogan recently described Maryland as being among “the top states in the country for entrepreneurial business growth,” touting the success of his administration’s “Open For Business” initiative.
Maryland’s proximity to Washington D.C. is an advantage for small businesses that are eligible for federal contracts, and its GDP is well above the national average. Maryland ranks second per capita and fourth overall in Small Business Innovation Research Program (SBIR) awards. Maryland also has a growing and highly educated workforce, meaning there is a great selection of talent available for hire.
While Maryland presents a lot of opportunity for businesses, it is not without its downsides. Maryland can be a costly place to run a business, when you take into account the state’s high rent, high business taxes, and high labor costs. If you’re not one of Maryland’s independently wealthy (though MD does have a disproportionately high number of such residents), it can be a struggle to obtain enough startup capital to open a new business in Maryland, or to keep your existing small business afloat in the face of high operating costs.
For Maryland entrepreneurs who need a business loan, I’ve put together this resource with the best loans for Maryland small business owners. These include the best online loans, bank loans, grants, and other small business resources. I highly encourage you to read on if you are a Maryland entrepreneur in need of business financing.
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Online Business Lenders For Maryland Businesses
Online business loans are the quickest and easiest way Maryland business owners can obtain business financing. Though these loans typically have higher borrowing fees and shorter repayment terms compared to a traditional bank loan, their convenience makes them worth it for some business owners—particularly for business owners who need capital ASAP or who can’t qualify for a loan from a bank or credit union. If you have a newer business or less-than-excellent credit, an online loan is likely your best financing option.
Read this section to learn about some of our favorite online lenders that extend loans to businesses in Maryland.
Exploring various online loan options
Lendio is an online loan aggregator, aka a loan marketplace, where businesses in all 50 states can search for and apply to multiple online loans with a single application. Lendio does not originate loans, but rather, they will connect you to their lending partners that meet your needs. It’s a good place to start if you’re not sure how much financing you might qualify for or which type of financing (bank term loan, short-term loan, line of credit, merchant cash advance, etc.) would best suit your business needs.
Lendio’s borrower qualifications vary since they work with a wide range of lenders, but Lendio recommends applicants meet the following minimum borrower requirements:
- Time in business: 6 months
- Credit score: 550
- Business revenue: $10K/month
We like Lendio for the excellent lenders they work with and the broad range of business financing products they provide access to, from short-term loans to long-term SBA loans, and many others in between. Lendio can connect qualified borrowers with loans as large as $5 million and, the average time to funding is 2–7 days.
Businesses with fair credit and/or unpaid invoices
Breakout Capital, also available to businesses in all 50 states (and D.C.), is a short-term lender that distinguishes itself by being transparent and reputable in a sea largely made up of unscrupulous, predatory lenders. Their terms and rates are clearly disclosed and they have excellent customer service in case you have any questions.
Breakout’s financing products include short-term business loans up to $250,000, and FactorAdvantage invoice factoring loans up to $500,000. FactorAdvantage loans are a combination of invoice factoring and Breakout Capital’s business loans. Breakout loans are flexible in that they act similar to a line of credit, making it easy to borrow more capital after you repay your first loan.
To qualify for a short-term business loan with Breakout Capital, you need:
- Time in business: 1 year
- Credit score: 600
- Business revenue: $10,000/month
Regarding FactorAdvantage, because this loan is designed to be used in conjunction with invoice factoring services, Breakout Capital does not require any specific time in business, revenue, or credit score. Funds are typically received within one business day after the final closing contracts for the loan are signed.
AMEX Business Loans
Established businesses that use or accept American Express
American Express Business Loans are available to businesses in all 50 states. They are not pricey credit card advance loans, but rather, they are actual term loans, including both short-term and medium-term loans. You do, however, need to either have a business AMEX card or accept AMEX cards at your business in order to qualify.
AMEX loans are convenient, fast, and reasonable in terms of their terms and fees. Depending on which loan you apply for, you can qualify for financing up to $50K (medium-term “Business Loans” product), $750K (short-term “Working Capital” loan), or $2 million (short-term “Merchant Financing” loan, similar to cash advance). The time to funding is typically about 2 days.
To qualify for AMEX business financing, you’ll need the following requirements:
- Time in business: 2 years
- Credit score: N/A
- Business revenue: $50K/year
You’ll also need to be an American Express business credit card holder for Working Capital and Business Loans. For Merchant Financing, you’ll need to accept American Express cards. Depending on the product, you may also need to do at least $12,000 in card-based sales annually.
Semi-established businesses with fair credit
OnDeck is the largest and probably the most well-known online small business lender, offering short-term loans and revolving lines of credit to eligible businesses in all 50 states. OnDeck is a hugely prolific, publicly traded company that has relatively few negative complaints considering their enormous footprint. Like the other online lenders on this list, OnDeck has the advantages of being fast, convenient, and willing to lend to businesses that cannot qualify for a bank loan. OnDeck offers short-term loans up to $500K and lines of credit up to $100K.
Here’s what you need to qualify for an STL or LOC from OnDeck:
- Time in business: 1 year
- Credit score: 600
- Business revenue: $100K/year
Average time-to-funding with OnDeck is 1-2 days.
Newer businesses with bad credit
LoanBuilder is actually part of PayPal’s business loan arm, but unlike PayPal Working Capital loans, you do not need to be a PayPal business in order to qualify for a LoanBuilder loan. In fact, you need very little in terms of qualifications to qualify for a LoanBuilder loan—businesses with less than a year in business and sub-600 credit scores can qualify.
LoanBuilder offers short-term loans up to $500K, with no origination fee.
An interesting benefit of LoanBuilder is that you can tinker with your loan amount and repayment term to “build” your own perfect loan before accepting the loan offer.
Here’s what you need to qualify for a LoanBuilder loan:
- Time in business: 9 months
- Credit score: 550
- Business revenue: $42K/year
Funding can be as fast as the next business day after you turn in all your documents and sign the contract. As with the other lenders on our list, LoanBuilder serves all 50 states.
Small startup loans
Prosper is a personal loan option available to borrowers in Maryland (and all other US states, except Iowa and West Virginia). Because these are personal loans, you can use them for almost any purpose you like, including to fund a business. You also don’t need any business qualifications in order to qualify for a Prosper loan, making this option suitable for startups, even if your business is only in the idea stage. You will, however, need to have at least fair personal credit.
Prosper sells term loans from $2K–$40K with monthly repayments. Though you can’t get a large loan through Prosper, the monthly repayments are a refreshing attribute, as most other online loans require daily or weekly repayments.
To qualify for a Prosper loan you’ll need:
- Time in business: N/A
- Credit score: 640
- Business revenue: N/A
Usually, the time it takes from application to funding is a week or less. However, because Prosper has a peer-to-peer model wherein investors choose which loans they want to fund, it can take up to 14 days for investors to decide if they will fund your loan.
Long-term, low-interest SBA loans online
SmartBiz, available in all 50 states, combines the best of both worlds when it comes to business loans: the convenience of an online application, and the low-cost and comfortable repayment schedule of a long-term loan. Specifically, SmartBiz offers SBA loans up to $5 million, including general business loans and commercial real estate loans. SmartBiz also partners with banks to sell non-SBA bank term loans up to $200K.
SmartBiz’s main benefit is its efficient, simplified SBA (Small Business Administration) loan application process. If you can qualify for a bank or SBA loan, SmartBiz offers a quicker application as well as a speedier time-to-funding. Also, while SmartBiz isn’t as easy to qualify for as some online loans, you may still qualify even if you have fair personal credit, and there is no specific revenue requirement.
Borrower qualifications vary somewhat depending on which type of loan you apply for:
- Time in business: 2–3 years
- Personal credit score: 650–675
- Business credit score (on certain loans): 150
- Business revenue: N/A (but sufficient to support repayments)
Time-to-funding can take from one to several weeks, depending on how fast you submit all the necessary documents. Still, this is faster than applying for a bank/SBA loan through traditional channels.
Banks & Credit Unions In Maryland
Whereas online loans are ideal for Maryland businesses that have subprime credit or not much time in business, bank loans are more appropriate for established businesses with excellent credentials. If you apply for financing through a bank or credit union, you might qualify for a longer-term loan with low interest, especially if your bank is an SBA (Small Business Administration) loan partner. As mentioned, some reputable online lending companies such as Lendio and SmartBiz have the option of connecting you with bank loans, including SBA loans—a type of government-backed business loan offered by certain banks.
The following are some popular Maryland business bank loan options. We don’t have too much information about local Maryland banks, as we don’t typically review local banks in depth. Nevertheless, choosing a local bank versus a large national bank can have its advantages in terms of more responsive and personalized customer service, so it’s definitely worth checking out these options on your own.
Howard Bank, Baltimore’s largest independent bank, is an SBA-preferred lender and also offers non-SBA business loans. Howard Bank offers business loans for a variety of business purposes, such as working capital and equipment financing, as well as commercial real estate loans.
Howard is a strong option to consider if you want to choose a local Maryland bank for your business financing needs. Howard Bank also participates in Baltimore County’s Small Business Loan Fund, discussed in more detail below.
In addition to Baltimore County, Howard Bank also has numerous other branch locations throughout central Maryland.
T.D. Bank, N.A. is the American branch of Canadian bank Toronto-Dominion Bank. This New Jersey-based bank division operates in 15 states, including Maryland, as well as Washington D.C.
Maryland small businesses with good credit may find T.D. Bank to be an excellent smaller alternative to the “Big 4” banks, as they offer low interest rates to qualified borrowers. T.D. bank also participates in Baltimore County’s Business Small Loan Fund, discussed in more detail below.
In 2018, J.P Morgan & Chase unveiled plans to open more than 70 locations in Maryland, D.C., and Virginia. Chase already has locations in the Capitol but will open its first Baltimore-area branch in 2019 (in Hunt Valley).
For businesses looking for the convenience of a large, national bank, Chase offers excellent business financing solutions to small and large businesses (including startups), with low interest rates. However, you will need good credit to qualify for Chase’s financing products, which include business term loans, SBA loans, and lines of credit. Chase also offers its customers some excellent business credit cards.
See our Chase Business Loans review for more information on Chase’s business loan requirements.
Baltimore County Small Business Loan Fund
Baltimore’s Small Business Loan Fund is a partnership between the County of Baltimore and some of the area’s leading banks, including T.D. Bank, Howard Bank, Wells Fargo, Bank of America, PNC Bank, and others. These are real estate and fixed-asset loans with a maximum amount of $1 million, or 40 percent of the project cost, whichever is lower. To qualify, applicants must obtain a loan commitment for at least half of the project cost from a participating Baltimore bank. You can find a full list of participating banks on Baltimore County’s website.
Nonprofit Lenders In Maryland
Nonprofit lenders may be able to offer low-interest loans to qualified small businesses. While not all Maryland businesses will be eligible, the good news is that Maryland has at least several nonprofit organizations that offer low-interest small business loans to businesses that don’t qualify for bank financing. There are also government-funded loans specifically for nonprofit organizations in the state of Maryland.
Baltimore Community Lending, Inc.
Baltimore Community Lending, Inc. is a certified nonprofit Community Development Financial Institution. This enterprise’s wholly owned subsidiary Baltimore Business Lending, LLC provides capital to startup and emerging small businesses in the city of Baltimore that have good credit but lack the equity or collateral to obtain traditional financing. Loans are made via partnerships with approved microlenders and technical assistance providers.
Nonprofit, Interest-Free, Micro Bridge Loan Account (NIMBL)
NIMBL is a loan from the state of Maryland available to nonprofit organizations only. Specifically, this program is for nonprofits that have been approved for other government grants or contracts but have not received the funds yet (hence the “bridge” loan designation). This program provides interest-free loan up to $25K to qualified nonprofits in the state of Maryland. You can find more information about this program on the Maryland Department of Commerce website.
Rockville Economic Development, Inc.
Rockville Economic Development, Inc. (REDI) was founded in 1997 as a nonprofit entity to support existing small businesses as well as to attract new businesses to the city of Rockville, MD. REDI offers several different loans and grants to Rockville businesses; Rockville businesses should check REDI’s website to see which financing programs they might be eligible for.
In addition to these nonprofit loans for businesses in the city of Rockville, other cities and counties in Maryland, including Frederick, Montgomery, and Baltimore, have similar low-interest or interest-free loan programs for businesses in those areas.
Small Business Grants In Maryland
Generally, grants for for-profit businesses are hard to come by and even harder to get approved for. However, Maryland seems to have an exceptional number of government-funded grant programs designed to promote economic development in the state. I’ve highlighted some of the most relevant programs below, and you can find a full list of all state business grant programs on Maryland’s Department of Commerce website.
Video Lottery Terminal Fund
Maryland’s Video Lottery Terminal Fund (VLT) uses proceeds from the state’s video slot machines to assist small, minority, and women-owned businesses located throughout the state of Maryland (and especially in the areas surrounding Maryland casinos). You can find more information on this grant on Maryland’s Department of Commerce website.
Rockville Small Business Impact Fund
The Rockville Small Business Impact Fund is a new program that will offer financial assistance to qualified, small- and medium-sized businesses in Rockville’s performance districts, particularly start-ups and businesses lacking access to the capital they need to sustain growth.
Per the program’s website:
During the Impact Fund’s pilot year, it will support private-sector solutions to community challenges through a grant focused on fostering economic vitality and community engagement in Rockville Town Center.
Montgomery County MOVE Program
MOVE is a one-time grant for businesses that are new to Montgomery County and lease up to 10,000 square feet of office space for a minimum of three years, excluding retail and restaurant industries. (Rockville, MD has a comparable program.) Eligible businesses may receive a grant of $8.00 per square foot for Class A or B space, and up to $4.00 per square foot for Class C space. You can contact the Montgomery County Economic Development Corporation for more information on this grant.
Advantage Maryland (also known as MEDAAF) is a broad, state-funded program that funds grants, loans, and investments to support economic development initiatives in the state of Maryland. Only businesses in eligible industries and priority funding areas will qualify. Contact the Maryland Department of Commerce for more information.
Export MD Program
The Export MD grant is designed to reimburse Maryland businesses for international marketing expenses. Funded in part through a cooperative agreement with the SBA, Export MD awards eligible Maryland businesses with up to $5,000 in reimbursement for expenses associated with an international marketing project—for example, trade show fees, airfare, translation of brochures, and website development. Maryland DOC accepts applications for this grant on a monthly basis.
Loans & Resources For Startups In Maryland
Brand-new companies have special hurdles when it comes to obtaining startup capital and other startup necessities. Fortunately, there are both state-funded and private nonprofit organizations in Maryland to help you find startup capital, register your business, and get your business off the ground!
Maryland Business Express
Hosted on the Maryland Department of Commerce website, Maryland Business Express is an online resource that provides a comprehensive set of resources for individuals who want to start a business in Maryland. You can do everything from register your business, to establish tax accounts for your business, to obtain Maryland business licenses online.
In other areas of the same website (Maryland DOC), you can also find loan and financing resources for Maryland business startups.
Maryland Capital Enterprises, Inc.
Maryland Capital Enterprises, Inc. (MCE) is a nonprofit lender providing small business loans to startups in Maryland. These loans of up to $50K are for for-profit startup businesses that have tried to obtain capital from a bank but were unable to. Visit the program’s website for more info.
Frederick County Small Business Loan Guarantee
The Frederick County Small Business Loan Guarantee program provides funds for the purchase of real estate, machinery, equipment, inventory, working capital, and renovation of real estate to startup businesses located in a Frederick County priority funding area (priority funding areas cover most municipalities and major transportation corridors in the county). The loan guarantee is for up to 80% of the loan with a maximum of $50,000.
Baltimore County Boost Fund
The Baltimore County Boost Fund provides loans of up to $250K to small businesses (classified by SBA standards) in Baltimore County and can be used for startup funds, as well as other business expenses. Baltimore-area small businesses are eligible, as are minority-owned businesses, woman-owned businesses, and veteran-owned businesses in Baltimore. Baltimore County also has a few other loan programs startups in the area may qualify for.
What To Consider When Choosing A Lender
There’s a lot to consider when choosing a small business lender. Among the most important factors are :
- How much you’ll pay for the loan (in interest and other fees)
- Repayment schedule
- Lender reputation
- Ease of application
- Do you qualify?
Generally, you want to choose the lowest-interest loan you qualify for, but you’ll also want to consider the lender’s overall reputation and whether you can comfortably afford the loan repayments. If you are time-pressed (and who isn’t?) you should also take into account how fast the loan will come through, and how convenient the application process is.
Different types of loans have different pros and cons you’ll need to weigh—for instance, an online loan you qualify for today might be easy to apply for and will hit your account within a couple of days, but carry a high interest rate or factor rate, with a short repayment term. You may have to wait a couple of years before you can qualify for a bank or SBA loan, but it will have a lower interest rate and more comfortable repayment schedule.
In order to choose the best loan you qualify for, you’ll need to consider multiple offers from different lenders. As mentioned, using a loan aggregator service like Lendio one good way to compare different business loans at the same time.
Of course, you’ll also want to make sure you even qualify for a loan before you start seriously considering them, or you’ll just be wasting your time. Be sure to check your credit score and also check that you meet a lender’s borrower requirements—which are almost always clearly stated on their website—before applying.
It’s safe to say that Maryland is indeed “open for business,” as its business-forward mayor states. While Maryland does have a relatively high cost of doing business compared to many other states, there are numerous loans and even grants available to Maryland businesses.
The D.C.-adjacent state has a lot going for it when it comes to attracting small businesses, including a wealthy populace, potential for government contracts, access to a major seaport, and many government programs to promote economic development, particularly for businesses owners who struggle to qualify for traditional means of capital. Whether you choose to go the bank loan route, apply with an online lender, or try to qualify for government-backed financing, you have many financing options at your disposal as a business owner (or aspiring business owner) in the Old Line State.