While state-run small business loans can be hard to come by in Arizona, there’s no shortage of available financing. From SBA-backed programs to options from private lenders and non-profit organizations, here’s all you need to know about Arizona small business loans.

SBA loans in Arizona 

The U.S. Small Business Administration (SBA) offers a variety of loan programs to help small business owners in all U.S. states, including Arizona. The following programs are guaranteed by the SBA, however, they are administered by intermediary third-party lenders at the local level.

SBA Microloans

Arizona businesses that are looking for loans up to $50,000 to startup or expand may be able to turn to an SBA-guaranteed microloan. 

The microloans can be used to purchase machinery or equipment, furniture or fixtures, inventory, or supplies. They can also be used for working capital. To qualify, you’ll have to meet the intermediary lender’s eligibility requirements which can include collateral. 

General SBA 7(a) Small Business Loans 

Another option for small business owners in Arizona is an SBA 7(a) loan which provides loans up to $5 million. The funds can be used to purchase furniture, supplies, and fixtures, to refinance business debt, and for short-and long-term working capital. Terms range from seven to 25 years. 

To be eligible you’ll need to operate for profit, fit the SBA’s definition of a small business, and have reasonable invested equity, among other things. If you want to apply, you’ll need to find a local SBA-approved lender. 

SBA Express Loans

Arizonians can also get SBA Express Loans from local SBA lenders which can be used for working capital needs as well as for buying equipment. To qualify, you’ll need to have at least 18 months in business and be a US citizen or green card holder. Loan amounts go up to $350,000 and terms typically range from three to five years. 

SBA 504 Financing

The last of the SBA options offered through local intermediary lenders in Arizona is the CDC/504 loan program. This program provides loans up to $5 million for major fixed assets such as land, buildings, machinery, and equipment. Terms range from 10 to 25 years. 

To qualify, your tangible net worth can’t be more than $15 million and your average net income can’t be more than $5 million. Further, you need to operate for-profit in the U.S. or its possessions. 

To apply, you’ll need to find a local Certified Development Company (CDC) which is a community-based partner that’s certified and regulated by the SBA. 

SBA Coronavirus relief loans in Arizona

In addition to the standard SBA loan options, additional programs were recently implemented in Arizona as many businesses needed assistance due to the Covid-19 pandemic.

Paycheck Protection Program (PPP)

As of May 31, 2021, this program is closed. However, the PPP was backed by the SBA and administered by intermediary lenders like Biz2Credit. It extended private loans with low interest rates to business owners so they could cover payroll and other costs for a set period. The loans can be 100% forgiven if certain conditions are met. 

Economic Injury Disaster Loan (EIDL) 

The EIDL program is still active and provides loans with low interest rates to help business owners who are struggling to meet their financial obligations because of the pandemic. Loans up to $500,000 can cover up to 24 months of economic injury (as of the loan limit increase announced March 24, 2021). The term for repayment is 30 years. 

While the EIDL loan is not currently forgivable, the EIDL Advance was. However, the Advance funds have been fully allocated so are no longer available. You can still apply for the EIDL at sba.gov.

Statewide small business loans in Arizona

While SBA loans can certainly be helpful, they can take a lot of time and paperwork. Plus, the eligibility requirements can be difficult to meet. The good news is, they’re not your only option. In addition to the SBA-backed options, here are a variety of small business financing options from private lenders and non-profit organizations in Arizona.

Arizona small business loans from private lenders

Many private lenders serve the state of Arizona with a variety of small business financing products, including:

Term loans

Business term loans have a set loan amount that is repaid over a defined period of time. For example, at Biz2Credit you can borrow from $25,000 to $250,000 and will typically have a repayment term from five to 10 years.  

In most cases, approval and your interest rate will heavily depend on your personal credit history, business revenue, and time in business. You can often apply online, get an answer in minutes, and get funding within a few days. The process is much more streamlined than an SBA loan. 

Learn about filling out a term loan application online!

Business lines of credit

A small business line of credit is similar to a term loan because you are approved for a specific amount. However, you aren’t awarded the full amount at the outset. Like a credit card, the amount is a maximum limit that you can withdraw from as needed. Often, as you repay your balance, the funds become available again. 

In most cases, you will need to make periodic payments and may have an annual fee. Further, lenders may require you to pay down the balance to zero to demonstrate your ability to do so. 

These are often a short-term solution. Some lines have a maturity date (when the balance becomes due) while others are “demand” credit lines where the lender can request it be paid at any time. When the balance becomes due, lenders may require balloon payments or some will enable you to convert your balance into a term loan.

Working capital 

Working capital is a Future Receivables Sales Agreement (FRSA) without an interest rate, term, or annual percentage rate (APR). Instead, you can opt for daily, weekly, or monthly repayments from your cash flow/business receipts. These often enable you to borrow more money than term loans and have more lenient approval requirements. 

For example, at Biz2Credit, we offer working capital loans from $25,000 to $2 million. To qualify, applicants typically have a minimum credit score of 575, at least six months in business, and annual revenue of $250,000. 

The working capital route can be a great way to hire staff, pay down operational costs, purchase inventory, and meet other business needs. 

Find out if you’re prequalified for working capital within a few seconds. 

Secured loans

If you’re looking for commercial real estate (CRE) or equipment financing, secured loans can help you borrow larger amounts at competitive interest rates. By offering valuable collateral in exchange for the loan, you lower the risk for the lender which can help you borrow more. At Biz2Credit, we offer CRE loans up to $6 million with terms up to 36 months. Learn about applying online with Biz2Credit for a CRE loan online today. 

Merchants have many financing options from private small business lenders in Arizona. If you want to learn more about the many different types of small business financing available, check out our definitive guide.

Arizona small business loans from non-profit organizations

In addition to private lenders, there are a few statewide loan programs offered by non-profit organizations. You may want to consider these programs if you have trouble finding a financing solution elsewhere. 

Arizona Small Business Success Loan

Growth Partners Arizona launched the Small Business Success Loan program which helps Arizona business owners by providing them with loans from $10,000 to $75,000. Terms range up to five years and the fees and interest rates are affordable. 

To qualify, you’ll need two years in business and at least $50,000 in annual revenue. The funds can be used to consolidate business debt, grow your business, purchase equipment, or function as long-term working capital. 

Kiva Tucson Crowdfunding Loans

Kiva Tucson is a non-profit focused on helping financially excluded small business owners in Arizona access capital. It offers loans from $1,000 up to $15,000 with terms of up to three years. 

To qualify, you must be 18 years old with a U.S.-based business, a debt-to-income ratio of less than 80%, and you can’t currently be in a bankruptcy or foreclosure proceeding. Amid the Covid-19 crisis, Kiva is also offering a six-month deferment of payments. 

Local small business loans in Arizona

Lastly, some small business loans are available to Arizona residents who live in a specific county or city. Here are a few of the current offerings. 

Graham & Greenlee County Micro-Loan Fund

The Graham & Greenlee County Micro-Loan Fund is a program offering loans to local businesses and startups in the Graham and Greenlee counties. It’s run by Freeport McMoRan, Local First Arizona, and the Graham and Greenlee County Micro-Loan Program. Loan amounts range from $5,000 to $25,000 and you’ll need an LLC or EIN to qualify. 

The Phoenix Community Development & Investment Corporation (PCDIC)

The PCDIC specializes in providing funds for projects that will benefit underserved areas of Maricopa County. Recipients can include nonprofits, small businesses, students, and community-focused organizations. 

Tucson Industrial Development Authority (IDA)

Tuscon IDA provides business resources and community loans (ranging from $35,000 to $500,000) to nonprofits and small businesses in the Tucson area. To qualify, your business needs to help improve the community and meet a current need. 

Verde Valley Regional Economic Organization (VVREO)

VVREO provides business loans for the Verde Valley in central Arizona. One of the primary benefits of this program is that it’s available to startups as well as established businesses.

Loans start at $25,000 and typically have terms of five years. However, to qualify you must be helping to retain or create jobs in the valley. 

The loan proceeds can be used for a wide variety of purposes from working capital and equipment to business acquisitions or renovations. Further, interest rates are competitive based on the market risk and loan term. 

Find the right business lending solution for you in Arizona

If you are a business owner in Arizona looking for capital, there is no shortage of options. However, the right solution for you is going to depend on your unique situation. Factors such as your stage of business development, time in business, personal credit score, annual revenue, plan for the funds, and deadline will all come into play. 

If you’re an established business with at least six months in business, Biz2Credit may be able to provide you with the funds you need. Plus, we can get them to you fast. Find out if you’re prequalified in seconds with our online application. Get pre-qualified with Biz2Credit today!

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