Small Businesses Starting Up Can Focus on Fundamentals to Access Capital

Entrepreneurship has boomed in the wake of the COVID-19 pandemic. Now, many of these newly formed small businesses are expanding, creating jobs and contributing to Utah’s economy. Even as entrepreneurs innovate and launch exciting new ventures, it makes sense to remember fundamental steps for accessing capital to start on a path to success.

New Businesses on the Rise in Utah and the U.S.

A silver lining of the pandemic is that entrepreneurship has flourished as a shifting economic and social landscape prompted people to start new businesses at record rates. Between March 2020 and March 2021, 14,873 small businesses were established in Utah, up 18 percent from the 12 months prior. And from March 2021 to March 2022, new small businesses jumped another 10 percent, to 16,505 openings in the state, according to the U.S. Small Business Administration (SBA) data.

That trend has only accelerated, with a record 5.5 million new business applications filed in the U.S. in 2023, according to the U.S. Chamber of Commerce. New business applications grew 21.5 percent in Utah from December 2022 to December 2023.

Nationally, entrepreneurs have filed more than 21 million new business applications in the past four years — 440,000 new applications every month — according to a January 2025 SBA report.

The SBA’s 7(a) loan program is the primary program for providing financial assistance to small businesses and offers guarantees on loans to small businesses of up to $5 million on reasonable terms and conditions. These loans are commonly used for acquiring land, purchasing equipment or working capital.

Of the SBA 7(a) loans approved by Zions Bank in the Utah district during fiscal year 2024, nearly 42 percent were made to businesses that were established after March 2020 when the pandemic began. These small businesses are borrowing modestly, as reflected by an average loan size of $241,856 of the bank’s loan approvals in Utah.

The State is Fertile Ground for Startups

A report released in March 2025 places the Beehive State near the top for startups. Booking.com for Business used data from the U.S. Bureau of Labor Statistics and the U.S. Census Bureau to look at which states were the best fits for startups. The study’s researchers developed a “startup opportunity score” out of 10 for each state, based on startups and population density as well as the 10-year survival rate of businesses. In Utah, there were 13,384 startups, or 382 startups per 100,000 residents in the state. The 10-year survival rate of Utah startups was 35 percent, pushing the startup opportunity score to 7.15. The report listed Utah No. 4, behind Nevada, Oregon and top-ranked Montana.

As new small businesses launch, grow, and seek access to capital, they should build a foundation based on five fundamentals:

Fundamental No. 1: Seek support.

Consulting with someone who knows a particular industry or sector can be invaluable in preparing to launch or expand a business. Support is also critical for entrepreneurs as they juggle duties, from bookkeeping to marketing. Identify knowledge gaps and seek out advice and training, if needed. It’s also helpful to get general advice from a business incubator. Look for free consultations and virtual classes on a variety of topics to help scale a business, including those offered by the Zions Bank Business Resource Center.

Fundamental No. 2: Focus on building credit.

Establishing a good credit history is critical to applying for funding to grow a business. It’s important to remember that lenders make decisions based on the “Five C’s of Credit,” which include character, capacity, capital, collateral and conditions. Character refers to industry experience and personal credit history, including a demonstrated willingness and ability to repay debts. Capacity is the business’s ability to generate positive cash flow and profit to cover business operations, including any debt service. Capital is the owner’s cash or equity contribution to the business, which can vary depending on the loan type. For example, an SBA 7(a) loan typically requires a minimum of 10 percent down payment of the total project cost. Collateral refers to tangible assets pledged to secure the loan amount. Finally, lenders consider the local economic climate, competition, supplier relationships, and industry trends that could impact the business. Conditions also describe the intended purpose of the loan, such as whether the funds be used for working capital, additional equipment or inventory.

Fundamental No. 3: Consider different financing options.

Growing a business takes capital, and there may be alternative routes to explore. A good lender can help find the right loan product to match a borrower’s goals and time frame. A few options to consider include the SBA 7(a) loan program mentioned above, as well as business lines of creditor business credit cards.

Fundamental No. 4: Come prepared.

Arrive prepared to meet with a lender with a complete loan package and a compelling pitch articulating the strengths and weaknesses of the proposal. It’s important to be able to explain the assumptions behind the numbers in a startup’s financial projections.

Fundamental No. 5: Don’t give up.

The time it takes to process a loan request depends on a variety of factors, including how quickly documents are provided to a bank. It’s a good idea to discuss expectations and deadlines early on when meeting with a banker. Remember to stay in contact with the bank and don’t give up if challenges or delays arise. Finally, bankers can help serve as advocates with loan underwriters. As bankers learn more about a business, they can help entrepreneurs meet credit requirements and successfully apply for capital.

Grant Dahl is senior vice president and SBA small-business manager at Zions Bank. He has nearly two decades of experience in SBA and small-business loan underwriting.