Small Business Loans California

There are a number of different ways to secure small business loans in California. For starters, you can choose from banks, credit unions, and online lenders.

Banks and credit unions are known for having the lowest interest rates on lending products. However, these lenders tend to have tight requirements, and you’ll typically need good credit and at least two years of business history to qualify. 

You’ll also need to meet a number of revenue and business plan requirements. 

Online lenders, on the other hand, are more flexible. They tend to offer a wider range of financing solutions for all types of businesses, including newer startups. They’re also renowned for fast funding times, with turnarounds as quick as 24 hours in some cases. 

Alternative Options for California Small Business Loans

Aside from banks and online lenders, there are also a number of non-profit and government-sponsored California small business grants. 

These funding programs feature unique benefits but are best for smaller financing needs.

• Valley Economic Development Center Small Business LoansCalifornia Capital Access Program for Small Business
• California Small Business Loan Guarantee Program
• Accion Opportunity Fund
• Los Angeles Federal Credit Union
• LA Community Development Commission/Housing Authority SMART Funding Program
• Working Solutions Community Development Financial Institution (CDFI)

No two small businesses are alike. The diverse range of small business loans in California can seem overwhelming at first, so it helps to break down each by distinct qualities. 

This way, you can compare based on your business’s specific needs.

Term Loans

Term loans are one of the most common types of small business loans in California. They’re structured as a lump sum deposit broken down into regular payments for the duration of the loan. 

Term loans can make large purchases or investments more manageable by distributing payments over time. In other words, you’ll be able to repay your debt as your business generates income rather than all at once. 

Most equipment, commercial real estate, and even SBA loans are set up as term loans.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate to 6%

Ideal for

One-off purchases or investments, when you know exactly how much a project will cost, long-term financing needs

Business Line of Credit

Business lines of credit work similarly to credit cards. You’ll be granted a maximum credit limit you can borrow from as needs arise, and you’re only charged interest on the amount of money you actually use. 

Business lines of credit are very flexible and can be used for a variety of purposes, such as working capital needs or going after growth opportunities.  

With a business line of credit, you’ll typically be able to access new funds up until your credit limit as you pay down your balance.

Term length

Revolving

Interest rates

Starting at the prime rate to 6%

Ideal for

Ongoing purchases or investments, flexibility, when you don’t know the exact cost of a project, long-term financing

SBA Loans

Small Business Administration (SBA) loans are government-backed loans featuring low-interest rates and high funding amounts. SBA loans can be as small as a couple thousand or as large as $25 million. 

They can be used for almost any type of legitimate business expense, such as working capital needs, real estate purchases, growth investments, and more. 

Veterans and certain minorities can even qualify for special programs and resources. SBA loans are offered through the SBA’s approved participating lenders, typically banks and online lenders.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate 

Ideal for

Borrowers with good credit

Alternative Financing

Some of the best options for small business loans in California are found through alternative financing. Alternative financing is typically offered by online lenders and can be any financing product outside the scope of traditional term loans, lines of credit, or SBA funding.

Alternative financing includes merchant cash advances, accounts receivable financing, purchase order financing, and more. These funding solutions each target a specific niche and are designed to fill the gap where traditional business loans fall short. 

For example, merchant cash advances are a way for retailers to get an advance on their future sales. With no regular payment schedule, this product isn’t exactly a loan. Instead, borrowers automatically have a portion of their daily credit card sales deducted. 

Both accounts receivable financing and purchase order financing are a way to turn outstanding invoices into immediate cash. But, while the former involves selling unpaid invoices entirely for a portion of their value, purchase order financing allows you to use I.O.U.s as collateral for funding.

Term length

Generally short-term – no more than two years

Interest rates

Some products may start at the prime rate, but expect higher rates on average

Ideal for

Borrowers with immediate cash needs, borrowers with limited credit history or time in business

At National Business Capital, we help businesses find the most optimal financing solutions based on their qualifications and needs. We understand that there’s no one-size-fits-all approach when it comes to business loans, which is why we work to bring you personalized options. 

Our expert Business Finance Advisors leverage a 75+ lender marketplace to streamline our client’s search for the right lender. You apply once and receive multiple competitive offers, all while our team helps you select the one that best fits your circumstances. We’re just as invested in your success as you are because we’re entrepreneurs, too.

We know your industry, won’t shackle you with anything you aren’t 100% comfortable with, and can save you the time and frustration of having to apply with lenders one by one. With $2 billion recovered and 2,000+ 5-star reviews on Trustpilot, National Business Capital is the right partner in growth as you grow and win business.