There are more than 550,000 small business owners in Arizona, from Phoenix to Tucson to Sedona, and all of them have one thing in common: They need capital to grow.
Sometimes they have that capital in reserve in their bank accounts. Sometimes they need to find it elsewhere. That’s where small business lending can be helpful.
How a Small Business Loan Can Help Your Arizona Business
Arizona small business loans can be used for so many things. They can provide working capital when you’re waiting for clients to pay invoices. If yours is a seasonal Arizona business, that money can help you make it through to your busy season.
You can use a business loan to fund marketing, hire employees, or buy equipment. And if business acquisitions are on your list, business financing can help there too.
Types of Small Business Loans to Choose From
Business financing comes in many shapes and sizes. Whether you’re looking for a microloan of $5,000 or a large real estate loan of $1 million, there are lenders in Arizona that can help.
The U.S. Small Business Administration guarantees loans through several loan programs, including SBA 7(a) loans, SBA 504 loans, and microloans. These loans have low interest rates and long repayment periods. Learn more at SBA.gov.
Banks, credit unions, and online lenders offer long-term loans with low interest rates to those with excellent credit.
If you don’t have great credit, you may qualify for short-term loans. These may have higher interest rates but be easier to get.
Lines of Credit
Rather than getting all the money at once, a line of credit lets you borrow what you need from that line and pay it back, then borrow again.
Commercial Real Estate Loans
Just like you’d take out a mortgage for a home, you can also take out a commercial mortgage to buy investment property, retail space, warehouses, and office space.
Business Credit Cards
Having a business credit card lets you make purchases for your business at stores and online. Get a card with rewards, and it can pay for itself.
Small Business Loans Available in Arizona
Here are a few of the lenders who can help you get any type of loan in Arizona.
Newtek offers loans between $1,000 and $15 million, so no matter what your financing needs, the lender can help. The loans, which have terms of 7-25 years, can be used for business acquisition, refinancing, or commercial real estate.
Arizona Bank & Trust
Arizona Bank & Trust is an SBA lender, and also offers business lines of credit, term loans, and leasing solutions. Additionally, you can get a business credit card, high-yield savings, and treasury management services.
American Express® Business Line of Credit
Alliance Bank of Arizona
Alliance Bank of Arizona is an SBA lender and offers 504, 7(a), and SBA Express loans at low interest rates. The bank also has a variety of other business banking services, from checking and savings to business credit cards and term loans.
What it Takes to Get Approved for a Small Business Loan
Each lender has slightly different eligibility requirements for the approval of a loan application. Generally, they want to see you have at least two years in business, so startups may have trouble getting loans from banks and the SBA.
You may need to provide collateral for a loan, so make sure you have fixed assets of high value you can use. Some lenders, like SBA or banks, may require you to provide certain documents like a business plan and/or financial statements and tax returns.
Also, take a look at your business credit scores to make sure they’re established and you’re actively building them.
Are SBA Loans Still Available for Arizona Businesses?
Yes. The SBA provides funding, business counseling, certifications, and disaster assistance in the state of Arizona. There are three SBA offices in Arizona: in Tucson, Show Low, and the main office in Phoenix. Here’s a useful guide on doing business in Arizona with local resources provided by the Small Business Administration.
What Is the Easiest SBA Loan Arizona Businesses Can Get?
The easiest Arizona SBA loans to qualify for are SBA Express Loans. Borrowers can take out up to $350,000 as a term loan or line of credit. You can use the funding for a variety of business purposes. Turnaround time is much faster with these loans than other SBA loans — you’ll get approved or denied within 36 hours. Then you’ll have access to funds within 90 days.
What Are the Minimum Requirements for a SBA Loan in Arizona?
To get an SBA Express Loan in Arizona, you’ll need to meet the following requirements. Your business must:
- Operate a US-based, for-profit business.
- Be a small business by SBA standards for size.
- Have been in business for at least two years.
- Have a demonstrated financial need that cannot be filled elsewhere.
- Have financed the business through other methods.
- Have zero delinquencies on other government debts.
- Demonstrate the ability to repay the loan.
- Not be a member of any ineligible industry.
What Credit Score Is Needed for an SBA Loan in Arizona?
You’ll need a personal credit score of at least 600 to qualify for an SBA Express Loan, although you’ll be more limited in how much you can borrow. A score between 600 and 650 can enable you to borrow between $30,000 and $150,000. If your score is over 650, you may qualify for a larger loan than that. If you want to maximize your loan potential with an SBA Express Loan, you’ll want to build up your credit score so it’s over 680.
How to Choose the Right Loan for Your Arizona Small Business
The right loan depends on your business needs. Are you looking for $5,000 to buy equipment or $1 million to buy real estate? How much can you afford to borrow? Keep in mind, whatever loan amount you agree to borrow must be repaid, so make sure you budget in that monthly repayment cost.
Also, consider what you’re eligible for. If you have great credit, you have lots of options at low rates. If your credit isn’t great, you’ll have fewer options and you’ll pay more in interest. Is it worth that cost to get the financing your Arizona business needs?
Small Business Grant Options for Arizona
Small business loans aren’t your only option for getting working capital in Arizona. There are also grant programs that can provide funds you don’t have to pay back.
The EmergeAZ grant is a partnership between the Governor’s Office, invisionAZ, and StartupAZ, and aims to help startups involved in solving problems caused by the COVID-19 pandemic. To qualify, your startup must have a product in the market, be in operation for at least a year, and have five or more employees.
Nav’s Small Business Grant
Nav is doing its part to help Arizona businesses (and those in other states) find the funds they need to grow. Nav’s Small Business Grant provides $10,000 to one lucky business each quarter and $5,000 to the runner-up.
In Phoenix, PHXbizGrants provide grants of up to $15,000 to help micro and small businesses cover business expenses during the pandemic. To qualify, you must have a Phoenix business at least one year old, 25 or fewer employees, and gross sales of $3 million or less. Additionally, your gross sales must have declined at least 25% because of COVID-19 after March 1, 2021.
Additional Resources for Arizona Small Businesses
Check out some of the business resources available to you as an Arizona business.
The Arizona Small Business Development Center has 10 district offices around the state and provides free training, events, and counseling.
The AZSTEP Program helps small businesses interested in entering export markets for the first time or to expand into new markets. The program provides compliance training, trade shows, go-to-market initiatives, and education.
Arizona Small Business Boot Camp & Collective
Don’t let the term boot camp scare you. This endeavor, put on by the Arizona Commerce Authority and Local First Arizona, provides a series of webinars and resources to help entrepreneurs recover from the pandemic.
With so many financing options and small business resources available, it’s no wonder there are so many great Arizona businesses. How will you grow yours?
This article was originally written on January 28, 2022 and updated on March 23, 2023.