Want the best business loans in the Golden State? From Chico to San Diego, we looked at small business loans in California to find you the best choices out there.
Whether you are starting a business in California or financing a preexisting one, there is financing for your business out there.
Top Small Business Loan Providers In California
Your top California small business loan might not necessarily be a loan. Financing is regulated by the California Department of Business Oversight. Check out our choices.
The California Rebuilding Fund
This fund helps mitigate the impact of COVID-19 health and safety restrictions on small businesses. The fund has a specific focus on historically under-resourced communities.
Loans awarded to small businesses through the California Rebuilding Fund are secured by the equity interest of the fund’s special purpose vehicle (SPV).
Small business applicants submit a pre-application online. Often these loans are via a small business development center.
Once the application has been vetted for eligibility, the applicant is matched with a lender in the network who will manage the client relationship and assist the small business owner through the underwriting and loan award process.
Loans go to $100,000 with three-year and five-year terms.
Pacific Community Ventures
Pacific provides loans up to $250,000 to any California small business. There are no minimum FICO requirements. However, you need to have been in business for at least 12 months.
They particularly specialize in entrepreneurs who may have had trouble getting funding before, like women, immigrants, people of color, and anyone who has been turned down for an SBA loan or traditional bank loan, or credit union loan.
Interest rates range from 7% – 13% fixed per year (this is depending on the loan amount and other credit factors).
Pay 1 – 5% loan fees at the time of closing.
Loan terms range from 1 – 5 years. There are no penalties for early repayment of loans. All loans are fully amortized. Automatic withdrawal (ACH) is required for all payments.
California Infrastructure and Economic Development Bank
IBank is a part of the California state government. Their mission is to reduce unemployment by supporting entrepreneurship and small businesses.
Their Finance Center promotes statewide economic development. They do so by increasing opportunities for entrepreneurs, the self-employed, micro business, and small business owners.
IBank helps all these business people have better access to capital and other technical resources.
You can use this financing for start-up costs, construction, inventory, business expansion, agriculture, lines of credit, and more.
They do not consider citizenship or immigration status when determining eligibility.
Nonprofit corporations can also get a business loan through the Infrastructure State Revolving Fund to fix city streets, parks, and other aspects of infrastructure.
City of Fresno Revolving Loan Fund
Small businesses within the city limits of Fresno, can get up to $100,000 for inventory, equipment purchases, leasehold improvements, and real estate (owner-user).
A business must be unable to get other forms of business financing.
Also, a small business has to commit to job creation before it can get money from this fund. There is generally a job creation or retention requirement of 1 job for every $35,000 loaned.
Fresno is also committed to providing incentives to small businesses. The city’s staff will troubleshoot across several areas for small businesses to help them, such as with parking, permits, and business taxes.
Disaster Relief Loan Guarantee Program
Provided by the same lenders as the infrastructure and rebuilding fund loans, these loans are for small business owners that have been negatively impacted or experienced disruption by COVID-19, wildfires or other officially declared disasters.
Passive commercial real estate businesses (rental income) are not eligible for an economic injury disaster loan.
The state provides a guarantee, working a lot like the Small Business Administration works on a national level. This guarantee is for up to 95% of the loan amount.
Essentially, the state is telling a lender that, if small business defaults on its business loan, it won’t be out more than maybe 5% of the entire loan amount.
This guarantee significantly mitigates a lender’s risk, thereby making a lender more likely to want to loan to a small business.
The Pivot Microloan
Only small businesses located in San Bernardino, Riverside, and East Los Angeles Counties are eligible. Get up to $25,000 with 7-8% APR based on qualified credit applicants.
The borrower must have a minimum FICO score of 620. But alternative credit is allowed if there are compensating factors. If you have negative factors in your credit report or credit inquiries in the past 90 days, you will need to explain to them when applying.
A small business can use the loan for:
- Equipment and fixtures
- Building improvements
- To maximize inventory, and more
Gambling facilities and construction businesses are not eligible.
California Capital Access Program (CalCAP) for Small Businesses
Much like disaster relief loans, CalCAP guarantees a portion of small business loans.
CalCAP provides a safety net of matching contributions to loan loss reserve accounts for participating financial institutions.
When a small business applies to a participating financial institution, the lender determines the enrolled amount and contribution of 2 – 3.5%. The lender and the small business each contribute the chosen percentage to the lender’s CalCAP small business loan reserve account.
For certain disadvantaged communities, CalCAP contributes additional funding. Otherwise, CalCAP matches the lender’s contribution.
Loans go up to $5 million but only $2.5 million of such a large loan may be enrolled in the program.
AmPac Business Capital Best Loan Match Option
AmPac only serves the Inland Empire (the Ontario, Riverside, Apple Valley, and Moreno Valley areas). So, they are not funding Southern California.
To qualify for a program to get SBA loans, businesses must have a strong business plan for pivoting in the pandemic, two years of business history, and business financial statements that are showing positive trends.
AmPac will help businesses within San Bernardino County get Microbusiness Relief Grants. To qualify for funding, a business must have 5 or fewer employees and gross revenues of under $50,000 during the 2019 and 2020 tax years.
Industries not eligible for Microbusiness Relief Grants as a loan option include the cannabis industry and short-term rental businesses.
Get small business loans for up to $500,000. Or get equipment financing and leasing for up to $150,000.
National also has working capital loans on offer to small businesses. This is a fast business loan, with funding available in as little as 24 hours. This loan is intended to bridge gaps between cash on hand and expected receivables.
They also offer short-term business loans with daily loan repayment terms. Terms run from six to eighteen months.
They have short-term loans for business owners with bad credit. This small business loan can help a business owner build credit.
Online Loan Options
NOTE: there are more online business loan providers, such as Funding Circle. The following is just a sample.
Credit Line Hybrid from Credit Suite
If you have good personal credit, you can get up to $150,000 via our Credit Line Hybrid program. Get 24 hour preapproval and 0% financing for 6 – 18 months—vital during times of inflation! Our Credit Line Hybrid is true ‘no doc’ financing, and even startups can get it.
Don’t have good personal credit? That’s okay. Just bring in a guarantor who does.
Contact us today to learn more about this great way to get business credit cards for your California small business.
CDC Small Business Finance
CDC Finance offers San Francisco, Oakland, Bay Area, and San Jose Small Business Loans. They are an SBA lender. Get up to $250,000.
They also offer working capital loans for up to $350,000. Get five to ten-year terms. Fixed and variable rates, with monthly payments. They will finance startups but a 20% down payment is required, and industry experience is preferred.
Collateral is not necessary. However, a business must be able to prove cash flow sufficient to make payments.
They will waive some requirements for businesses in low-moderate income communities, start-up businesses, and veteran-owned small business ventures.
Business Access Online Loans from California Bank & Trust
They provide small business loans for under $175,000. These are term loans with terms of up to 60 months (5 years). You will have to have owned the business for at least 24 months. You should currently have under $250,000 in loans with this bank.
Get up to 100% financing with a fixed rate. You must provide your EIN, revenue, and income information on your business, among other documents.
This bank also provides lines of credit for up to $50,000. Terms are for up to 36 months. Their lines of credit have a variable interest rate.
OnDeck Business Loans Online
Get a term loan with a term of up to 24 months. Borrow up to $250,000.
They also offer a business line of credit for up to $100,000. Their lines of credit have a 12-month repayment term.
For both types of business funding, OnDeck requires that you be in business for at least one year. Your personal FICO score must be at least 600. The business must have a business checking account.
Also, your business must be grossing at least $100,000 per year.
NOTE: OnDeck does not lend in Nevada, North Dakota, or South Dakota.
Elevate Funding for Merchant Cash Advances
For a California small business with a merchant account and steady revenue, a merchant cash advance might be the best option. It is a different form of funding from a business loan.
Elevate will not pull your personal credit. They do not require collateral.
You can get fast financing, with cash in your business bank account in 24 hours.
They do not require a Confession of Judgment. You will not need to supply a personal guarantee. They will not put a UCC lien on your small business.
In addition, Elevate only deals with first-position MCAs, meaning they do not stack one merchant cash advance atop another for the same borrower, at the same time.
How to Qualify for a Business Loan in California
Small Business Majority can help you get loan-ready—and so can Credit Suite. A Fundability™ Foundation will be crucial.
Have a Good Credit Score
A good personal credit score helps you get financing anywhere. Business lenders and credit issuers want to see objective proof you pay back credit cards and other debts on time.
Since your FICO score comprises some of your Experian and FICO SBSS scores, it always helps to keep this score high.
Have a Proper Business Plan
Don’t skimp on your business plan! Here is where, if you do not have experience creating such a plan, it makes sense to call in a professional. A good business plan helps you get funding.
A business plan is just that—a roadmap of how you want your company to go from startup to success.
Proven business revenues always help you get business funding. This also means you have been in business for at least 6 months. Both metrics, together, assure lenders and credit issuers that your business is on the right track.
Past results are no guarantee of future success. Still, they show you can do this.
Finding the Right Lender
Do you need help finding the right lender for your Golden State business? There are a lot of choices, which can be a bit much.
Let us work with you to find the best lender, with the most money to offer and the best terms—where you can qualify!
Hollywood, sandy beaches, and business financing? Your California business loan is out there. Take your pick from government-subsidized loans to microloans to merchant cash advances. Your small business can even get disaster relief funding.
Or consider an Opportunity Fund business loan if these choices do not appeal.
Contact us today for more information and to explore your options.