Indiana is a national leader in business and industry, and the state’s economic landscape reflects the growth and resilience of many sectors, including manufacturing, construction, technology, agriculture, healthcare and others. A driving force of that economic progress has been small business development, which contributes significantly to the state’s entrepreneurial activity.
According to the U.S. Small Business Administration (SBA), over 99 percent of all businesses in Indiana are small businesses, playing a vital role in the state’s economy. A large part of the potential for small business advancement is in the availability of funding, whether for starting from the ground up, expanding an existing venture or recovering from a disaster.
“The SBA is pleased to partner with Indiana small business owners wherever they are on their entrepreneurial journey,” said the agency’s Indiana District Director Stacey Poynter.
A Network of Support
The appeal of SBA-backed loans is that it reduces the risk to lenders and increases possibilities for borrowers. Government-supported funding allows for more flexibility, often providing lower down payments, longer repayment terms, and increased approval rates, even for those who may not have strong credit histories and struggle to get traditional loans.
One of the biggest draws to SBA loans for borrowers is the counseling, mentorship and resources available to help them navigate unfamiliar territory – from learning about various funding options to developing resilient business plans and growth strategies. The SBA resource partners available in Indiana include Indiana Small Business Development Centers (Indiana SBDCs), SCORE Chapters, the Central Indiana Women's Business Center, and the WEOC WBC.
“SBA Resource Partners are SBA’s ‘boots on the ground’ connection for entrepreneurs to help them find resources they need when and where they need them. Through free and low-cost counseling services, SBA Resource Partners can be a small business owner’s best friend – offering them business advice and mentorship during all phases of their small business journeys,” said Poynter.
Poynter noted the resource partners are knowledgeable about SBA-backed loan programs and can help potential borrowers explore other state and local agency funding avenues, including Indiana-specific initiatives like the IN-STEP program run by the state, the Manufacturing Readiness Grants, opportunities from the private sector and other organizations.
”SBA Resource Partners are business building experts that help entrepreneurs put together strong business plans, financial projections and perfect pitches which are just three of the critical elements they need when successfully securing funding from any source,” she said. “This way, entrepreneurs know what they’re getting into and are truly lender-ready when it’s time to buy big-ticket items and access higher dollar loans.”
Finding the Right Fit
When entrepreneurs are ready to start the loan process, SBA provides a Lender Match tool that small business owners can leverage to review SBA’s network of lenders, which currently includes over 130 in Indiana. Lenders include traditional banks, big banks, community banks, credit unions, non-banks and others.
“The SBA Lender Match tool gives Indiana small business owners an opportunity to comparison shop to find a lender that will work with them with the right loan at the best rates, terms, and fees before applying for an SBA-backed small business loan,” Poynter said. While the SBA helps secure the funding, borrowers work with the lender, from the time they begin the application, through the processing phase and into repayment.
The SBA offers three signature loans. The primary business loan program is the 7(a) loan, which can provide funding of up to $5 million for eligible borrowers for working capital, purchasing supplies, acquiring a location, and other business needs. The SBA also offers 504 loans through the agency’s Community Development Companies partnerships. These loans are structured to help promote advancement and employment growth. With a maximum loan amount of $5.5 million, borrowers must be a for-profit company and meet other eligibility guidelines. A third option for borrowers is the SBA Microloan, which is offered primarily for start-up or expansion funding needs. These smaller loans, up to $50,000, can be used for operational needs and are provided through SBA-approved intermediaries. The SBA also provides a disaster assistance program for small businesses.
Record-breaking Year
In Indiana, Poynter said small business Hoosiers are taking advantage of the options. She said there has been a significant increase in the use of SBA loans in 2024, especially with the Microloan program. Approvals for Microloans doubled from 2023, setting a record for the most approvals and dollar volume for that program since it began in 1992.
In 2024, SBA approved 1,425 loans supporting $871 million for Indiana-based businesses. Of that, 1,321 totaling $587.9 million were 7(a) loans. The 504 loan program delivered 104 fixed-rate loans for long-term assets and real estate worth more than $112.9 million while supporting an additional $143 million to small businesses from lenders. An additional $4.4 million was provided in Microloan funding through 170 loans.
