Small Business and Startup Grants and Loans in Tennessee

– Tennessee Small Business Grants –

Tennessee Small Business Grants: When you decide to start or grow a small business in Tennessee, you may need to acquire some capital. Irrespective of the stage where you might be with your small business, funding is often needed to make sure that you are able to achieve goals both short and long term.

Tennessee Small Business Grants

So, what are the best and possible ways to gain access to working capital? How do you cover the financial needs of your business to ensure it grows?

There are various options available including small business grants, small business loans, and private investors.

The financing option that is right for your business can be dependent on a range of factors including the general economic conditions, your business’ history, and how you plan to use the funds.

Tennessee Small Business Grants

A small business grant provides free money to businesses and organizations for some specific purposes. Unlike small business loans, it doesn’t have to be paid back.

However, just like in other states, most small business grants in Tennessee have strict eligibility requirements, and businesses that receive these grants are responsible for showing their progress and how they used the funding.

Some TN small business grants include the following:

  • FastTrack Infrastructure Program: This grant program is made available for local communities to cover public infrastructure improvements that benefit companies that create jobs or make capital investments. This grant program demands matching funds from local communities.
  • Tennessee Main Street: The Tennessee Main Street program is targeted towards helping communities revitalize neighborhoods and commercial districts. There are different financial resources made available through this program to help small business owners and entrepreneurs. The Main Street Entrepreneur Grant is available in amounts up to $50,000 for the entrepreneurial develop and reuse of commercial buildings in some specific Main Street communities.
  • Façade Improvement Program: As a part of the Tennessee Main Street Program, the Façade Improvement Program offers five grants of up to $100,000 for exterior improvements to commercial businesses.
  • FastTrack Economic Development Program: This program offers various loans and grants to help promote economic development. Grants and loans can be used for buying equipment, building repairs, improvements or other things related to either business expansion or relocation. Eligibility requirements indicate funds need which will be used in a way that will have a great economic impact on a community.
  • Rural Business Development Grants: Rural Business Development Grants are given by the federal government but are administered by the state government. This small business grants in Tennessee is meant to promote either the development or expansion of small private businesses in rural areas. The business must employ (or plan to employ) 50 or fewer employees and have less than $1 million in gross revenue.

Small Business Loans in Tennessee

If you are not able to find a small business grant program that works for your needs, or you are not eligible, another financing option is small business loans in Tennessee.

Surely, loans have to be paid back with interest, but they offer some perks over grant programs including the fact that in many cases the eligibility requirements are not as rigorous.

Here are some small business loans available to Tennessee businesses.

  • Pathway Lending: Pathway Lending is a Tennessee small business loan company that gives lines of credit as well. Their loan amounts range from $5,000 to $5 million and have a really competitive interest rates. Loans are only available to people whose businesses operate in Tennessee, Alabama, or the greater Memphis Region. There are various types of loans available from Pathway, including microloans for businesses at the early stages.
  • Volunteer State Bank: Volunteer State Bank gives variety of business loans including Small Business Administration (SBA) loans, equipment loans, and business term loans. Volunteer State Bank is located in Middle Tennessee and their loans can be utilized for inventory, expansion, renovations, and working capital. Volunteer State Bank does not list their terms, rates, and fees on their site, so interested business owners should contact the bank directly to get more information.
  • First Tennessee Bank: First Tennessee Bank advertises business loans with longer terms than other lenders and they are an SBA-preferred lender. An example of a loan available through First Tennessee is the 7A Loan, which is an SBA loan. The max loan amount is $5 million and the max term is usually 10 years.
  • LiftFund: This is a not-for-profit organization that works with business owners and entrepreneurs in Memphis and all of Tennessee who otherwise would not have access to capital. Small business loans are usually available up to $1 million and startup loans are available up to $50,000.

Small Business Investors in Tennessee

Small Business Investors in Tennessee

Tennessee businesses can also raise money through private investors, but there are some downsides to consider.

Angel investors, for instance, are people who invest in startups or small businesses to provide capital to launch them or grow them from their birth.

Angel investors are majorly looking for a higher rate of return than what they would earn by investing in other places. They often want to put money into businesses that are going to provide returns of at least 25% subsequently.

In exchange for the investment, you give up equity in your company which means you give up partial control of it.

Another is a venture capitalist. Venture capitalists is similar to angel investors, but instead of using their own money, it is usually a pool of money that comes from different sources such as pension funds or investment companies.

A few examples of small business investors in Tennessee include:

  • Launch Tennessee: Launch Tennessee is a partnership between the public and private sectors in Tennessee. The organization aims at making Tennessee one of the most startup-friendly destinations in the country. Based in Knoxville, there are various investment and funding resources available through Launch Tennessee.
  • TNInvestCo: TNInvestCo was developed by the State of Tennessee and they provide investment funding to businesses that are independently owned and operated and have not more than 100 employees. The business has to have its headquartered in Tennessee, and at least 60% of employees have to be in Tennessee. The business has to be able to show high-growth potential for eligibility. The Tennessee Angel Fund is part of this initiative.
  • Nashville Capital Network: The Nashville Capital Network is a group of about 100 investors that manage investment funds including the Tennessee Angel Fund, the NCN Angel Fund I, and the NCN Partners Fund. They work mainly with high-growth potential businesses trying to raise anywhere from $1 to $3 million in Series A financing. In a few cases, they will also work with pre-revenue companies.

Banks in Tennessee That Offer Small Business Loans

Here are the best banks for small business loans in Tennessee:

The First National Bank of Manchester

Established in 1900 in Manchester, The First national bank of Manchester has helped small businesses in Tennessee with loans amounting to $38 million in just one year.

Bank of Perry County

Formerly known as the Bank of Lobelville, its name was changed in 1975. The bank gives a variety of loan products to individuals and businesses such as auto, home improvement, and small business loans.

First Volunteer Bank

Operating in Tennessee and Northwest Virginia, the First Volunteer Bank is very diverse since it accommodates the biggest chunk of the market possible through extensive banking products and services.

First Bank of Tennessee

The First Bank of Tennessee was founded in 1890 in Spring City. While it only originally the Rhea County, it has since grown to offer its services to the rest of the state as well.

First Citizens National Bank

First Citizens National Bank is based in Dyers, Tennessee. Presently, it is headed by its President and CEO, Jeffrey Agee.

First Commerce Bank

Founded in 2006, the First Commerce Bank has already managed to top SBA’s list of best banks for small business loans. In 2013, it loaned a total of $66 million to small businesses.

If you are looking at how to start a small business in Tennessee, carefully explore and evaluate all of your financing and funding options to determine the right one or maybe the right combination for your current and long-term needs.

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