Starting a business is certainly not for the faint-hearted. There is a lot of uncertainty and planning that comes into play with any new business venture. Things you’ll need to worry about are location, securing funding, marketing, and ensuring that your business idea is profitable enough and appropriate for the market that you are targeting. Starting a business in Kansas City isn’t going to be easy, but with the right business loan in Kansas City, it can be incredibly lucrative.
Securing New Business Loans in Kansas City
Kansas City has a population of well over 500,000 people, rising up to over 2,000,000 when you consider the entire metropolitan area. Kansas City also frequently welcomes travelers at about 24.5 million per year. Because of its wide appeal and population, starting a business in Kansas City is a great investment.
A business loan in Kansas City can provide essential capital to cover startup costs, such as equipment, inventory, and operational expenses. It helps establish a solid financial foundation, enabling you to focus on growth and development. Securing funding early on can accelerate your business's success and enhance your competitive edge in the market. But knowing which types of businesses are most profitable in your area will ensure your business gets the strongest start possible.
Kansas City’s Thriving Industries
Kansas City is a diverse centralized business hub, which makes it a prime area for a wide variety of business opportunities. Yet, some are a little more commonly found than others.
Bioscience
Bioscience is the largest chunk of the workforce by the numbers in Kansas City. Jobs in this sector include research and drug development.
Technology
Statistics show that 1 in 10 working professionals in the Kansas City metropolitan area are working in the technology industry in one way or another. Nearly 4,000 different businesses operate in the tech industry, ranging from small startups to global corporations. While it may seem saturated, this shouldn’t scare you away. At least you know there’s a market for it.
Tourism
About 1 in 23 jobs in Kansas City are directly or indirectly sustained through tourism. These jobs can be anything from working at a hotel to working in food service and beyond.
Distribution
The Kansas City metro area is the most centrally located major US market, making it a popular hub for distribution centers for large shipping companies.
Food and Beverage
The food and beverage industry in Kansas City is thriving because of the city’s proximity to agriculture, as well as being in a wonderful location for further distribution. In fact, many major food corporations have roots in Kansas City.
If your business doesn’t fit into the above categories, there’s no reason to worry or predict your impending doom. These are just a few of the thriving industries currently in Kansas City. Because Kansas City is so large and diverse, there is certainly not a lack of business types that can be profitable and attractive to potential customers.
Types of Business Loans in Kansas City
No matter what industry your business is in, you’ll have to examine your budget and create a business plan. During this process, you may need to start considering getting a business loan. There are several different types of business loans to choose from in Kansas City.
Commercial Bank Loans
Commercial bank loans are probably the type of loan that would come to mind first in the context of business loans. These loans are between a bank and a business and often require collateral, a personal guarantee, and/or financial statements proving your ability to repay the loan. When going into such an agreement, you may need to provide monthly statements to the bank and make sure that items purchased with the loan are properly insured to be used as collateral.
While commercial bank loans are typically short-term, depending on the needs of your business, they can become long-term or be renewed during busy seasons.
Lines of Credit
Lines of credit typically won’t give you as much buying power as a commercial bank loan, but these may be a great option when you need money in the short term. A line of credit typically doesn’t require collateral and only allows you to borrow a set limit of money, much like a credit card. Getting a line of credit is an excellent option for a business loan in Kansas City when you occasionally need flexibility to buy different things depending on the project you’re working on.
It can be used, repaid, and then used again as much as you would like, just like a credit card. However, a line of credit will likely have a lower interest rate than a credit card, making it a desirable option for occasional expenses in your business or busier seasons.
Credit Cards/Cash Advances
Credit cards are relatively easy to get, which makes them an attractive option for anyone looking for a little extra money to fund their business. If your account is in good standing, you can even get cash from your credit card at an ATM using a PIN.
However, credit cards tend to have relatively low credit limits and high interest rates. However, if you’re avoiding using collateral to fund your business, then credit cards and cash advances might just be the right option for you. Often, business credit cards aren’t used alone and are used in conjunction with a different type of loan, so you don’t necessarily have to choose a credit card as your only form of business loan.
Home Equity Loan
Home equity loans are exactly what they sound like. In these loans, your home is put up as collateral in the case of you defaulting on your payments. While you may get a good interest rate when you choose this option, this is often an unnecessary risk for most business owners. No one wants to lose their home over a failed business venture. Often, this is called a second mortgage.
Equipment Financing
Equipment financing won’t exactly put cash directly into your hands or give you any buying power, but it can certainly help offset any upfront costs. You can lease vehicles, office supplies, manufacturing equipment and much more and pay for these in installments rather than having to buy these tools up front. These loans are relatively easy to get as the equipment itself is used as collateral and can be repossessed should you default on your payments.
On its own, equipment financing might not cover all of your business needs, but it will certainly make business finances easier to manage, especially in the early stages of a business, making equipment financing one of the best options for business loans in Kansas City.
Kansas City Area Loans
There are special programs and organizations in the Kansas City area that can help you secure financing. Eligibility may vary and these lenders may require a detailed business plan, so do your research or ask any questions you have before choosing one of these as your lender.
There are many more types of business loans available for you to peruse, but these are just some of the most popular. Each type of loan and even individual lenders will have their own requirements, so it’s important to ensure your understanding of the requirements before making a commitment.
Application Process
It may be tempting to just walk into a bank and see what they can do for you, but that doesn’t give you the best shot of getting your loan approved. As a business owner, it is your job to explain what you do and how you expect to pay back the loan in a simple and clear way. Remember, you want to get a yes out of them, and so you’ll need to show any potential lenders that you are worth taking a chance on and that there is little risk in doing business with you.
In order to do that, there are some documents and things that you need to get together to help make the lender’s decision as easy as possible.
For one, some lenders require a detailed business plan, especially for new businesses. Even established businesses may need to provide a business plan. A business plan details all business activities, goals, and strategies to achieve these goals. A good and well-written business plan will increase the chances of a lender taking a chance on you.
You’ll also need any applicable information about your business including the financials in the case of your business already being in operation, explain what type of loan you’re looking for, and at least have an estimate of the amount you’re looking to borrow.
If you’re looking to put up any of your personal property, savings accounts, or investments as collateral, now is the time to consider your options and weigh the pros and cons of using your personal assets as collateral.
Choose BusinessLoans.com For Your Kansas City Business Loan
At BusinessLoans.com, we want to take some of the hardship out of finding and securing an appropriate business loan for your Kansas City business. We match business owners with lenders who are best equipped to meet your needs. We know you want to hit the ground running when it comes to your business, and we hope to help you do just that. Start your application today!
