Small Business Financing
Guide to Financing Your Small Business in Portland
Everything you need to know get funding for your business in Portland
Creating a business plan is just the first step to launching your brand new Portland business. Once you have your action plan in place, the next step is to secure financing. Fortunately, Portland offers a plethora of options for financing your business.
Some factors will determine how much financing you can get, like personal credit score, collateral, and forecasted profits. You can choose the best business financing based on your startup timeline as well as your customer payment structure.
To help you get started, we’ve outlined some Portland financing options below.
Small Business Bank Loans
Small business loans are a great way for a company to use its assets and obtain working capital. Loans are available through commercial banks, local savings and loans, private lenders, and the government.
The SBA offers a partnership with Portland banks and lenders with their 7(a) loan. You can apply for a loan between $5,000 and $5 million with a bank or lender that partners with the Portland SBA.
You can see what you need to qualify for a 7(a) loan here.
You can also seek out a standard bank loan or business line of credit if you have an existing account with a lender that does not partner with the Portland SBA. If you don’t have an existing account and are searching for banking options, here’s a list of the top small business banks in Portland:
Small business bank loans typically have low APRs, contingent on the size of the loan and the size of the lender. With most small business banks in Portland, you can choose short or long term loans to adjust the size of your monthly payments.
In addition to banking options, there are nonprofit organizations that exist to develop the Portland small business community. One of these organizations is the Evergreen Community Development Association, who offer loan programs to get small businesses get started in the city.
Commercial Real Estate Loans
Having a front-facing store in Portland means needing additional funding for rent, insurance and upkeep. A commercial real estate loan can be taken out through a bank or an SBA fund, but you’ll want to consult with a commercial real estate agent or company in Portland so you know where to buy and how much of a loan you will need.
You can search for Portland commercial real estate online with Showcase, or you can find an agent at one of the following Portland real estate agencies:
The options for commercial real estate loans are similar to bank business loans, with short and long-term options and typically low APRs.
If you’re starting a small business (less than 10 employees) or a lower-capital startup, a business credit card is a convenient way to begin financing your company. Using two or more cards can help you obtain a higher credit line, and they can be combined for a lower overall interest rate. In addition to this advantage, using business credit cards can help avoid using collateral or down payments for small business loans.
For a business credit card, banks like the OnPoint Credit Union offer business cards for new companies and ongoing financing. You can also apply for a business credit line at Umpqua Bank or Trailhead Credit Union.
Peer Lending Loans
Peer lending loans are a great resource if you’re in a booming business community like Portland. Connecting with investors both locally and nationwide can help you find loans from industry peers who are looking to keep the small business community alive.
As a new business in Portland, the key to finding the perfect investor is having a solid business plan and financial projections that show strong earnings and present a sound investment.
Some small businesses rely on invoicing as their primary income source. If your new business adopts this profit model, you might be looking at a longer turnaround time to record revenue. With a factoring company, you can turn invoices into working capital while they are still processing.
You have many options for Portland factoring companies, like Paragon Financial, or you can use a service like CapitalPlus. Invoice factoring has the benefit of quick turnaround for capital, but keep in mind it has a higher APR than other financing options.
Home Equity Credit
If you own a home in Portland, this can be a good source of collateral capital for financing your business. It’s a less expensive option, typically with low or no interest rates, but you run the risk of losing your home if you default.
For a home equity line of credit, you will work with both a bank as well as a mortgage company. If you don’t have an existing mortgage broker, you can find many in Portland, like PDX Home Loan.
There are additional sources of financing that can be used to supplement the funding options explained above:
These options will typically enhance any kind of financing that you find in Portland, instead of being used as your primary source of funding.
Once your financing is secured, you’ll want to start looking for commercial space as well as starting to market your business with a website. Check out our guides for Portland real estate and our how-to on website creation!