Fund your Kentucky business

When your own money isn’t enough, start with an advisor, then ask which program actually lends. The Kentucky Economic Development Finance Authority⁴ can make a fixed-rate loan itself. The regular SBA loans come from a lender. The named state grants are narrow, and one of them is closed.

What’s different in Kentucky

• Coaching is no-cost. The Kentucky Small Business Development Center³ says its coaching is no-cost and confidential¹. Make an appointment.
• KEDFA can be the lender. The loan can be used for up to 100 percent of the project cost, or be used alongside other lenders⁴. It is not a loan for every kind of business.
• The named grants are not opening-day cash. One matches a federal research award. One matches a federal grant for a city, a county, or a nonprofit, and it is not accepting applications.
• One SBA office covers the whole state. Louisville serves all 120 counties⁹.

Do this

1. Write down what you need and what it’s for. Equipment, inventory, and rent are different asks. KEDFA’s loan is for businesses in manufacturing, agribusiness, or services and technology⁴. It is not a general startup loan.
2. Book the coaching. The Kentucky SBDC says its coaching is no-cost and confidential. The SBDC does not administer loans, grants, or investment capital¹. The state counseling page says these resources are provided free of charge³. The SBDC offers workshops and online courses for writing a business plan. That FAQ does not print a price for a workshop or a class.* Ask the center what a class costs before you sign up. The SBDC says to expect to put in 20 to 30 percent yourself, because 100 percent financing is not available². That is the SBDC’s expectation, not a legal minimum.
3. Use the SBA office for your address. The Kentucky District Office in Louisville offers funding programs, counseling, federal contracting certifications, and disaster recovery for all 120 counties⁹. There is not a second district office to sort out.
4. Understand who lends the regular SBA loans. The Kentucky SBDC’s capital page says the SBA does not lend that money directly. The SBA loans guide explains who makes each kind. The SBDC can help you get the package ready for a lender.
5. Read the KEDFA page before you assume a bank has to be involved. The loan page says KEDFA can offer the loan. Amounts are $15,000 to $100,000. The loan can be used for up to 100 percent of the project cost, or be used alongside other lenders. The term is 3 to 10 years, depending on the project. You qualify only if the business has 50 or fewer employees, works in manufacturing, agribusiness, or services and technology, and creates one new full-time job within one year of closing⁴. Call the Cabinet at (800) 626-2930 before you apply. The page does not print an interest rate or an application fee.* Ask for both.
6. Read the grant pages the same way. The SBIR/STTR page describes a competitive, non-dilutive, reimbursable grant. It is for a for-profit company that already has a federal SBIR or STTR award, and is based in Kentucky or willing to move here. The Cabinet’s financial incentives listing confirms a Phase I match of up to $100,000⁶ and a Phase II match of up to $150,000. Its separate SBIR/STTR program page instead prints $100,00⁵ for Phase I, an improperly formatted amount.* Confirm the current limit with KY Innovation before relying on it. The GRANT program is the Government Resources Accelerating Needed Transformation (GRANT) Program. An eligible applicant is a county or city governing body, certain Kentucky public-service entities, or a 501(c)(3), as a match for a federal grant⁸. Funding is obligated and the program is not accepting applications⁷. It is not a grant to a new for-profit business. The SBDC says grants to start a business are extremely rare². Be wary of anyone selling access to a guaranteed grant.
7. Keep your paperwork ready. Lenders, KEDFA, and coaches ask for your formation documents and EIN. Register your business and Get your tax IDs are the Kentucky steps for those.
8. After a declared disaster, the SBA can lend directly. Disaster assistance covers several kinds of loan, including physical damage, economic injury, and military reservist economic injury, for a declared disaster, and only if you qualify¹⁰. A disaster by itself does not qualify you. Check the declaration and the loan type before you apply.

What you get back

An appointment with a coach, and help preparing what a lender or KEDFA asks for. A loan decision comes only if you qualify, from KEDFA on its loan or from a lender on the others. These pages do not promise a finished plan or an approval.