A new North Carolina LLC can apply for business funding, but forming the LLC doesn't create the revenue history most partners review, so options are narrower at first and owners' finances weigh more. Ivyview Lenders, a small-business funding broker in Greenville, North Carolina, explains the NC setup steps, what to prepare and where pre-revenue businesses can find free help.
| Entity filing | NC Secretary of State, Business Registration Division |
|---|---|
| Tax accounts | NC Department of Revenue, where the business's activity requires them |
| Pitt County | Business personal property listed January 1 to January 31 each year |
| Free local help | Pitt Community College Small Business Center; NC SBTDC Greenville office |
| Who decides | The lending partner, after reviewing the business and its owners |
Can a new LLC get a business loan?
It can apply, and some partners consider newer businesses. But the LLC itself isn't what gets reviewed. An LLC is a legal structure: it separates the business from its owners for liability and tax purposes. It doesn't come with credit history, revenue or a record of paying bills. Those build up only as the business operates.
So a partner looking at a young LLC usually leans harder on what else is available: the owners' personal credit and finances, their experience in the industry, early bank statements, signed contracts, and collateral such as equipment being bought. Expect more questions, and possibly less favorable terms, than a business with years of statements behind it. Ivyview Lenders won't promise otherwise.
Do you need an LLC at all?
Not necessarily. Sole proprietors and partnerships can and do seek business funding, and some partners work with them. An entity can still help in practical ways: it keeps business money in a business account under a business name, which produces the clean statements partners read. Which structure suits you is a legal and tax question; the Secretary of State's Business Registration Division says it “cannot give legal advice,” so ask an attorney or accountant.
If you are converting a sole proprietorship to an LLC, keep the old account's statements. They are still part of the business's history, and a partner may ask to see both.
North Carolina setup, in order
- Form the entity with the NC Secretary of State, if you are using one. The division posts its current processing times on its site.
- Get an EIN from the IRS for the business.
- Open a business bank account in the exact legal name on the state record, and run all business money through it from day one.
- Register with the NC Department of Revenue for the tax accounts your activity requires, such as sales and use tax or withholding.
- Check local and licensing requirements with your city or town, and with any state board that licenses your trade.
- List business personal property in January. Pitt County says all businesses, sole proprietors included, list it between January 1 and January 31; see its business personal property page.
- Keep the entity current by filing annual reports with the Secretary of State.
Our North Carolina loan checklist explains what a partner checks at each office.
Before revenue: where funding usually comes from
Nearly every funding type Ivyview Lenders arranges assumes the business is already taking in money that a partner can see on its statements. Before the doors open, owners more often draw on their own savings, investors or family, and on lenders with a development mission. The Carolina Small Business Development Fund, a statewide nonprofit CDFI, lists financing for startups as well as existing businesses. SBA-backed programs are another route, made through participating lenders. Eastern North Carolina funding resources covers each.
After opening: what may come into view
Once the business is operating and money is moving through its account, more options can open up, depending on the partner:
- Equipment financing, where the equipment usually secures the financing and a detailed vendor quote anchors the request.
- Working capital and lines of credit, which depend on cash flow, so partners generally want several months of deposits first.
- A merchant cash advance. It is not a loan, and it only works when sales are already coming in. Its fixed total cost can weigh heavily on a young business's cash flow.
What to prepare as a new business
- A short business plan that says what the money pays for and how repayment happens
- Realistic monthly projections, with the assumptions written down
- Each owner's personal financial statement and a summary of industry experience
- Every bank statement since the account opened
- Signed contracts, purchase orders or letters of intent, if you have them
- Vendor quotes for any equipment or build-out
- A debt schedule, even a short one, including any personal debt used for the business
Free help for new businesses in Pitt County
- Pitt Community College Small Business Center: free resources and guidance to help entrepreneurs “launch, grow, and thrive in Pitt County,” (252) 493-7541.
- NC SBTDC, Greenville office: 300 East First Street, (252) 737-1385, by appointment.
- Pitt County Economic Development: 111 S Washington St, 252-902-2079, for businesses locating or expanding in the county.
Ivyview Lenders is not affiliated with any of them.
Questions to ask yourself first
- If sales come in slower than projected for a few months, can the business still make the payment?
- Am I prepared to sign a personal guarantee, and do I understand what it puts at risk?
- Would a smaller amount, or waiting a few more months of operating history, change the options?
- If the business closed, what would I still owe personally, and to whom?
- Have I looked at how the cost adds up in dollars? The loan payment calculator helps.
Where Ivyview Lenders fits
For a new business, our first job is often an honest conversation about timing. See how the process works.
By Ivyview Lenders · Updated