Florida is a popular place to start a new business. In 2020, it registered more new businesses than any other state. There are several loan options available for new Florida businesses as well as many other types of small business resources.
This article will cover:
- How much it costs to start a small business in Florida and what licenses you need
- How to get a small business loan in Florida
- How to write a business plan that supports your business loan application
- What to do next for your small business
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How Much Does It Cost to Start a Small Business in Florida?
The fees for starting a Florida business vary depending on the type of business you want to start. The first step to starting your small business is registering with the Florida Department of State office.
To do this, you must first choose the proper structure for your new company. The business structure determines the cost of your filing fees.
How to Register Your Business in Florida
Before registering your business, be sure to check the availability of the name you want for your limited liability company (LLC), corporation, or partnership.
Below are four of the most common types of business structures, but there are several others. If you’re unsure which structure is best for your business, you can hire a financial advisor to help you determine which one is right for you.
1. Sole Proprietorship
A sole proprietorship has a single owner. It’s an unincorporated business, and there’s no distinction between the business and the owner. This is the easiest type of business to start because it doesn’t require any registration. However, if you’re doing business under a name other than your own, you’ll need to pay $50 to apply for a fictitious name.
An LLC limits an owner’s personal liability in the same way a corporation does, but an LLC isn’t held to the same formalities. An LLC can be owned by multiple people or a single person, and these owners are called members.
To form an LLC in Florida, you have to file for Articles of Organization, designate a registered agent, and pay a $160 fee.
A corporation is considered a legal entity that’s separate from its owners. This means that owners have limited liability. Corporations are required to follow certain rules, such as holding regular stakeholder meetings.
To register a corporation in Florida, you must file for Articles of Incorporation, designate a registered agent, and pay a $70 fee.
4. Limited Partnership
A limited partnership is owned by two or more individuals, who invest in the business and share its profits and losses. Owners of a partnership have limited liability for debt and aren’t responsible for directly managing the business.
To register a limited partnership in Florida, you must file for a Certificate of Limited Partnership, designate a registered agent, and pay a $1,000 fee.
What Business Licenses and Permits Do You Need in Florida?
Most businesses in Florida need either an occupational license or professional license and a sales and use tax permit. The other types of licenses and permits your business needs depend on your industry. We’ve included some common ones in the list below:
- Occupational license or professional license: The type of license you need depends on what kind of business you have. For an occupational license, you must register with the clerk of court in the county where your business operates. For a professional license, register with the Department of Business and Professional Regulation (DBPR).
- Sales and use tax permit: If your business conducts activities that are taxable like selling products, you must get a sales and use tax permit. The Department of Revenue has an interactive tax registration feature to help determine the requirements for your business.
- Building and zoning permits:Contact your city or county to determine your permit requirements for a brick-and-mortar business.
- Health permits: If your business is in an industry such as lodging or public food service, you must have a health permit. The Hotels and Restaurants category of the DBPR can help you find the correct license.
Once you’ve registered your company and applied for your licenses and permits, it’s time to look for small business loans to help you get your business off the ground.
What Small Business Loans Are Available in Florida?
It’s difficult for new businesses to get traditional bank loans. Luckily, Florida offers robust options for small businesses loans.
Microfinance Guarantee Program
Enterprise Florida, Inc. (EFI) is an organization that promotes economic development across Florida. In support of that mission, it offers the Microfinance Guarantee Program to help small businesses get microloans by guaranteeing a portion of the loan.
A loan guarantee makes it much easier for small businesses to get credit because lenders don’t have to worry about you not paying them back. If you get a loan from the Microfinance Guarantee Program and can’t pay it back, EFI pays the lender the portion of the loan it guarantees. EFI guarantees up to 50% of loans of $250,000 or less.
Some of the requirements for the Microfinance Guarantee Program:
- Have a small business located in Florida
- Have fewer than 25 employees
- Have an annual gross revenue of less than $1.5 million for the last two years
504 Loan Program
The Small Business Administration (SBA) offers the 504 Loan Program through Florida First Capital/First Capital Finance for small businesses to use to purchase real estate, machinery, and equipment. Financing through this program is offered at below-market, fixed interest rates. It provides 40% of your project financing needs and requires only a 10% down payment.
Some of the requirements for the 504 Loan Program:
- Owners must be United States citizens or have a green card
- Have a net worth of less than $15 million
- Cannot be engaged in speculation or rental property investment
7(a) Loan Program
This is another loan option from the SBA that provides funding of up to $5 million. The funds can be used to buy real estate and equipment or for working capital.
Some of the requirements for the 7(a) Loan Program:
- Have a demonstrable financial need
- Not be delinquent on federal debt
- Have reasonable invested equity
- Have tried alternative funding options such as personal assets before applying
Why You Need a Business Plan Before Applying for a Small Business Loan in Florida
Many small business owners shy away from creating a business plan because it seems too complicated and time-consuming. You already know your business plan, so why put it on paper?
A business plan is helpful for you to get a clear understanding of every facet of your business, but more importantly, it’s an essential tool for successful business loan applications. Lenders want to see concrete evidence that you have a viable business plan.
Presenting a well-researched plan also makes a great first impression. Lenders will see that you’re competent, professional, and determined, and this goes a long way toward getting a loan approved.
What To Include in Your Business Plan
- Executive summary: The executive summary provides an overview of the important points of your business plan. This can be difficult because everything in the plan is important; however, focus on condensing the information to highlight how your business serves its target market and why it’ll be successful.
- Company description: Create an engaging description that helps lenders understand your company’s unique selling proposition.
- Market analysis: Your market research should cover your industry, target market, and competition. You can conduct effective market research with the Census Business Builder tool.
- Organization and management: Cover your business structure and highlight your personal business strengths as well as those of your management team.
- Service or product line: Explain the product or service you sell and how it benefits consumers.
- Marketing and sales: Outline your plan to build brand awareness, get website or foot traffic, and generate sales.
- Funding requests: Explain your funding needs. What will the loan be used for?
- Financial projections: Provide an overview of your projected revenue and expenses.
- Appendix: You can provide documentation to support your business plan such as your credit history, business licenses, key research, letters of recommendation.
What To Do Next
- Apply for a federal employer identification number (EIN)
- Open a business bank account
- Research your business insurance options
- Learn more about federal and state labor laws
Florida is an excellent location to start a business because it offers many small business loan options. The tips in this article can help determine the cost of starting your business in Florida and how to improve your chances of getting a small business loan.