Find the Best Small Business Loans in Phoenix, AZ

How to get a business loan in Phoenix

Small businesses are a driving force in Phoenix and the rest of Arizona. More than 1 million people, or 44.5 percent of the private workforce, work for small businesses in Arizona, according to the U.S. Small Business Administration.

Small businesses need funding to grow, and business loans are a common way to secure funding for new equipment purchases, marketing or day-to-day expenses.

Whether you’ve owned a business for years or are planning a start-up company, you’ll benefit from the extra funding provided by a business loan. Different business loans are available in Phoenix to fit specific company needs, including:

• Term loans: A term loan is the most common form of business financing. These loans give businesses funding upfront and are paid back over a predetermined period of time.
• Business lines of credit: A business line of credit is ideal for short-term financing needs. It works similarly to a credit card, has a predetermined limit and only accrues interest on the funds you use.
• Equipment financing: Equipment loans are used to purchase equipment for your business. The loan term is equivalent to the expected lifespan of the equipment, which serves as collateral for the loan.
• Invoice financing: Invoice financing is ideal for businesses with unpaid invoices that need fast cash. The unpaid invoices serve as collateral for the loan.
• Merchant cash advances: A merchant cash advance provides a lump sum of money. Businesses make payments on the loan by withholding a percentage of its daily sales or by fixed daily or weekly withdrawals from your bank account.
• U.S. Small Business Administration (SBA) loans: SBA loans are ideal for business owners with profitable businesses and strong credit. This type of loan is typically used to expand or refinance existing debts.
• Microloans: Microloans are short-term loans that are generally less than $100,000. These are often available from online and alternative lenders.

Short-term loans provide you with the funds you need quickly, sometimes in as little as 24 hours. Long-term loans typically include larger funding amounts and lower interest rates compared to short-term loans, but have a much more rigorous application process.

Lenders in Phoenix will look at a variety of factors when deciding whether a company qualifies for a business loan. These might include how long the company has been in business, the business model, annual revenue and the personal credit history of the borrower.

It is possible to get a loan with bad credit with some lenders in Phoenix. These companies focus on the strength of your company and business model.

Depending on the type of loan, you may also need to provide collateral to secure the loan. Collateral is an asset, like inventory or equipment, that can be seized and sold by the lender if you fail to make your payments. A down payment, usually ranging from 10 to 20 percent, may also be required for certain types of loans in Phoenix.

Most lenders in Phoenix will charge several fees in addition to interest on a loan. The major types of fees associated with business loans include:

• Origination fee: A fee to cover the cost of processing the loan
• Prepayment penalty: A fee charged for paying off the balance of your loan before the completion of the agreed term
• Referral fee: A fee charged by loan brokers for referring you to a lender
• Packaging fee: A fee used to cover the cost of preparing a loan application to present to a lender

Make sure you understand all the fees and penalties that may apply when you’re comparing loans. By choosing the right lender for your company, you can build a relationship that helps your company grow and expand for years to come.