Small Business Loans in Indiana for 2025 Now

Small Business Loans in Indiana: Complete 2025 Guide for Entrepreneurs

Indiana’s vibrant economy and expanding entrepreneurial landscape in 2025 make it a prime location for new and established small businesses. From Indianapolis tech firms to Evansville manufacturers, accessing working capital is essential for sustaining growth and innovation. This guide provides Indiana entrepreneurs with everything they need to know about small business loan options this year, focusing on working capital solutions to help Hoosier businesses thrive.

2025 Market Outlook for Indiana Small Businesses

Indiana ranked among the top Midwest states for business growth in the first quarter of 2025, with sectors like logistics, life sciences, agri-business, and advanced manufacturing making significant gains. Five distinct regions stand out for their entrepreneurial ecosystems:

• Indianapolis Metro: Home to a thriving tech and logistics industry, with established organizations like the Indiana Economic Development Corporation (IEDC) supporting new ventures.
• Fort Wayne: A growing hub for healthcare startups and advanced manufacturing.
• Evansville: Focused on healthcare, energy, and agri-business, benefiting from cross-state commerce with Kentucky and Illinois.
• South Bend-Elkhart: Linked to Notre Dame University and known for innovation in mobility and engineering.
• Bloomington: University-driven business community, fostering technology and creative businesses.

Types of Small Business Loans Available in Indiana (2025)

Indiana business owners have access to a range of loan products. For many, working capital loans are crucial to bridge cash flow gaps, finance payroll, or cover seasonal expenses. Here’s a breakdown of major financing types and their best uses:

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Page 1 of 5

Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

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Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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1. Working Capital Loans

• Purpose: Manage day-to-day expenses, inventory, or payroll.
• Features: Fast funding (as little as 48 hours), flexible terms (6-36 months), and moderate documentation.
• Best For: Retailers, service providers, seasonal businesses, or any entrepreneur facing temporary cash flow gaps.

In 2025, Indiana lenders offer working capital loans ranging from $10,000 to $500,000, with typical APRs between 8.5% and 24.9% depending on credit and revenue history.

2. SBA Loans

• Purpose: Long-term projects, large capital investments, and startup expansion.
• Features: Backed by the U.S. Small Business Administration with competitive interest rates and long repayment terms (up to 25 years for real estate).

3. Equipment Financing

• Purpose: Purchase or lease new machinery, vehicles, or technology needed for growth.
• Features: Equipment itself often serves as collateral; terms tailored to expected equipment lifespan.

4. Business Lines of Credit

• Purpose: Flexible, revolving credit to meet ongoing operating needs.
• Features: Only pay interest on what you use; limits typically between $20,000 and $250,000.

Top Indiana Small Business Lenders in 2025

Choosing the right lender makes all the difference in securing funds quickly and affordably. Here are leading providers serving Indiana small businesses in 2025:

• Old National Bank: Indiana’s largest locally headquartered bank, specializing in working capital, SBA, and equipment financing.
• First Merchants Bank: Active statewide business lender with a strong focus on personalized service and local decision-making.
• ReadyCap Lending: Leading SBA 7(a) lender serving Hoosier startups and established businesses alike.
• Elevate Ventures: Indiana’s foremost venture capital and microloan provider, with special programs for women- and minority-owned businesses.
• Fifth Third Bank: Regional powerhouse offering lines of credit and flexible working capital products.
• Kabbage (American Express): National online lender with a major Indiana footprint, specializing in quick working capital loans for small businesses.

Common Uses for Working Capital Loans in Indiana

• Inventory Purchases: Stocking up for summer tourism in South Bend or retail surges in Indianapolis.
• Covering Payroll: Ensuring timely pay during expansion phases in Fort Wayne or seasonal hiring in Bloomington.
• Paying Suppliers: Managing supply chain costs for Evansville manufacturers or logistics firms.
• Marketing & Technology: Launching ad campaigns or upgrading POS systems for local restaurants and retailers.

How to Apply for a Small Business Loan in Indiana: Step-by-Step (2025)

1. Assess Your Funding Needs: Determine the amount and type of loan needed—e.g., $50,000 for inventory, $150,000 for equipment, etc.
2. Organize Required Documents: Prepare your business plan, tax returns (last 2 years), recent financial statements, and articles of incorporation.
3. Compare Lenders and Loan Options: Review offers from banks, credit unions, and online lenders for the best rates and terms.
4. Complete Application: Most lenders offer digital applications—expect to provide ownership info, revenue history, and details about your business.
5. Approval Process: Banks may take 1-2 weeks (longer for SBA), while online lenders like Kabbage may fund within 24-48 hours.
6. Receive Funds: Upon approval, funds are typically deposited directly into your business bank account.

Success Stories: Indiana Businesses Powered by Working Capital Loans

Case Study 1: Fort Wayne Microbrewery Expansion

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Amount: $85,000
Lender: Old National Bank
Term: 24 months
Result: A growing microbrewery in Fort Wayne secured a working capital loan to purchase seasonal inventory and expand outdoor patio space for summer 2025. Increased revenue by 18% year-over-year.

Case Study 2: Indianapolis Retail Digital Upgrade

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Amount: $40,000
Lender: Kabbage (American Express)
Term: 12 months
Result: A tech-forward apparel boutique used their funds to launch an e-commerce shop, integrating modern POS systems and tripling their online sales within 6 months.

Case Study 3: Evansville Agri-Business Payroll Support

Amount: $120,000
Lender: First Merchants Bank
Term: 18 months
Result: Temporary payroll financing for a locally owned produce distributor during peak harvest season, ensuring continuity and retaining their workforce.

Small Business Loan Application Tips for Indiana Entrepreneurs in 2025

• Check for State-Specific Programs: The Indiana Small Business Development Center (ISBDC) and IEDC offer grants and technical assistance to complement loans.
• Build Your Business Credit: Positive relationships with local banks and timely repayment can unlock higher funding tiers and lower rates.
• Use Loan Funds Strategically: Focus on investments with clear ROI, such as upgrading tech for efficiency or expanding into new markets.
• Document Your Impact: Many lenders value impact—track how working capital improves sales, employment, or outreach.

Frequently Asked Questions

What credit score is required for Indiana small business working capital loans in 2025?

Most lenders look for scores of 620+, though better rates are available for FICO scores above 680. Non-traditional lenders may accept lower scores for solid business performance.

Are collateral or personal guarantees required?

Many working capital loans are unsecured, but key owners may need to provide a personal guarantee, especially for larger amounts.

Can startups access working capital loans?

Yes—several Indiana-based lenders offer microloans and lines of credit for businesses with 6-12 months of operating history, particularly those with strong cash flow or collateral.

Conclusion: Empowering Indiana Businesses in 2025

Whether you are a Main Street retailer in Bloomington, a tech startup in Indianapolis, or a family farm in Evansville, Indiana’s 2025 working capital loan market offers flexible, accessible funding to drive your business forward. Smart use of financing can unlock new opportunities, strengthen your financial foundation, and ensure long-term success amid competitive local markets. Compare your options, prepare your documentation, and take your business to the next level with the right working capital partner.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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