Home Merchant cash advance California Small Business Loan Options

California Small Business Loan Options



Golden State, California is home to more than 4 million small businesses extending from San Diego and Los Angeles north to San Francisco and Sacramento. The state relies on these companies to support its economy. Keep reading to learn more about small business loans in California.

It’s just that there are resources to support these small businesses in return! There are many types of California small business loans that can help businesses like yours thrive.

How a Loan Can Help Your California Small Business

Access to working capital has many advantages for small businesses. While cash flow is sometimes an issue, perhaps because your clients take several months to pay their bills, having money in your bank account allows you to still pay your own business expenses.

Loans can be used for anything your business needs, from purchasing supplies to make products to purchasing real estate to grow your business.

California Small Business Loan Options

When it comes to business financing, you are spoiled for choice in California.

COVID-19 loans

California has been hit hard by the coronavirus pandemic, and state and federal governments have stepped up to help. At the federal level, there were economic aid programs, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL).

In California, the California Small Business COVID-19 Relief Grants Program provided much needed help.

Note that these programs may not currently accept new requests.

Bank loans

Financial institutions like banks, credit unions, and online lenders offer long-term business loans with low interest rates. Note: they are known to be the hardest to qualify at times, so make sure your credit is strong.

SBA loans

Loans guaranteed by the Small Business Administration may be a little easier to obtain, and they also offer long repayment terms and low rates.

There are a variety of SBA loans, from 7 (a) to SBA 504 loans. Some are to be used for specific purposes, such as economic development and community development. Others can be used to cover business expenses, equipment, and real estate.

Credit lines

If you don’t want all of your financing at once, a line of credit gives you access to cash when you need it. If your application is approved, say $ 10,000, you can borrow $ 7,000 now and pay it back, then borrow $ 10,000 and pay it back. It will continue to be available while you pay off what you have borrowed.

Short term loan

Not all business owners in California have outstanding credit, but there are still financing options, such as a short-term loan. Keep in mind that these loans have short repayment periods (sometimes just a few months) and higher interest rates.


Another good option if your credit is not good, microloans provide smaller amounts, usually up to $ 50,000.

How to choose the right loan for your California small business

With so many financing options, it’s important to take the time to think about your financing needs. Are you looking to buy real estate to build a factory there? You may want to consider an SBA or bank loan with a 25 year repayment term so that you can take your time paying off that larger loan.

If you don’t have good credit, you will need to weigh the cost of borrowing higher against the return you would get by reinvesting the money in your business.

How To Qualify For A Small Business Loan In California

Eligibility requirements may vary from lender to lender, but in general, you can expect lenders to consider a few criteria:

  • Your credit rating
  • How long have you been in business
  • Your annual income

Your personal and professional credit scores can be taken into account. Therefore, if you don’t have a business credit score, learn how to establish business credit. The higher your scores, the better the offers you will qualify for.

If you are running a start-up you may not be eligible for bank or SBA loans, so look at the qualifications for microloans and short-term loans.

How to get a small business loan in California

Small business owners should provide information about their business and themselves during the application process, regardless of the type of financing they choose.

Some apps, such as those with online lenders, may only request information about your business and its annual income. Others, like the SBA and bank loans, will want more details, including tax returns and financial statements.

You may also be asked for your business plan. If you don’t have one, you can get free assistance setting up one through an organization in the state of California, such as a Small Business Development Center.

Once you are approved for a loan, you will be presented with your loan terms and the loan amount that you are eligible to borrow. If you agree, sign the documents and your funds will be deposited into your business bank account in just one business day.

Alternatives to Business Loans in California

You are not limited to the financing options we discussed above. Here are some alternatives to consider, especially if you are struggling to qualify for bank or SBA loans.

Credit card

Some California businesses find it easier to qualify for business credit cards and appreciate the versatility of being able to make purchases when they need to.

Some cards offer 0% APR in the first year, as well as rewards for purchases.

Merchant cash advance

Especially for businesses with poor credit, a cash advance from a merchant could be a good way to access funds. This is an advance on future credit card sales and is repaid daily or weekly through automatic refunds.

Small business grants

While not loans, small business grants can provide the capital you need and they don’t have to be repaid. There are grants for businesses in certain industries, as well as for women, veterans, and minority-run businesses.

The financing your California business needs

With so many financing options there is no reason for your business to be in trouble. Nav can help you find the best financing solution for your needs.

This article was originally written on July 8, 2021.

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