How to Get a Small Business Loan in Philadelphia

You don’t have to be a financial guru to get a small business loan in Philadelphia, but you do need to be organized.

Getting a loan requires a lot of administrative work over weeks and months, including preparing documents, talking to lenders, and filling out applications. It can be overwhelming to say the least. Especially if you’ve never done this before.

First, you need a lender. From your own bank to a Philadelphia non-profit financial institution, you’ll have a list of options to secure funding to start, grow, or improve your business. And many lenders will try to guide you through the process and help you reach your goals.

What is a business loan

A business loan is when a for-profit business owner borrows money from a financial institution or lender to start, expand, or improve their business. These loans require an understanding of how much money is required, what it is used for, and how the business can repay the lender.

” read more: How to Start a Nonprofit in Pennsylvania

there is private business loan, which are often loans from traditional banks or financial institutions and are not backed by government funds, can be considered “loans without collateral.” This is risky for lenders and can be difficult for business owners to secure due to eligibility requirements.

next, public works loan, supported by government money. These loans are provided through the Federal Small Business Administration (SBA) or a network of financial institutions that work with state and local governments. General public business loans SBA Guaranteed LoanSBA undertakes to pay a portion (typically 50-90%) for loans, the SBA will cover the portion promised to the lender if the business owner is unable to repay.

there is Loans from nonprofit lenders, leverages private and public partnerships to provide loans to small businesses in the region. Many are SBA-approved lenders.

there is also online loan lenderbut the experts we spoke to encouraged finding a lender you can meet in person and not have to pay a premium for the loan. ,In many cases high interest rate When Offer little guidance or personal interaction.

Interest rates are calculated based on a number of factors, including the amount of the loan, financial history, and personal qualifications. According to the 2022, the interest rate for SBA loans will be between 7.75% and 13.5%, while the interest rate for traditional business loans will be between 3% and 7%. lending tree.

” read more: Entrepreneurship? Here’s how to get a business license in Pennsylvania.

A bunch of paperwork outlining how much money your business has, the assets you own, and other financial statements. Different lenders may have different requirements, so it’s a good idea to check with your lender first.

Here’s what you generally need:

  • Money needed and what to do with it (project budget)

  • How the business operates and generates revenue (business plan)

  • how much business experience do you have

  • Standard business tax returns and internal financial statements

  • List of commercial obligations of the business (if any)

  • Personal financial statements and credit history

  • List of personal or investment properties (if any)

  • Collateral or property (if any) that you can pledge to surrender if you are unable to repay the loan

Check with your bank about the loan before startingIt’s best to try an agency you already have a relationship with. Either how to get the loan, how to get the loan rejected, or how to see if the bank agrees to work with his SBA to provide the loan.

If a bank approves a loan or agrees to work with SBA to provide a loan, the process has begun. well done!

However, if your bank declines your loan, ask why they declined.under Equal Credit Opportunity Act, the lender must provide reasons for denying the loan if requested within 60 days of the loan being denied. Understand why your loan was declined and know what you need to improve. Whether it’s your debt-to-income ratio or your credit score.

With this in mind, be prepared to look for other lenders. Find lenders using our verified search tool, go directly to your local business resource center, or connect with community-based organizations near you.

These tools are provided by the SBA, Philadelphia’s public-private partnerships, and a national network of Community Development Finance Institutions (CDFIs). Applying with these tools doesn’t guarantee you a loan, but it does connect you to potential lenders.

  • SBA Render Match Connect business owners with SBA-approved lenders. After you apply for information about your loan needs, you will be connected to an interested lender within two days. Compare interest rates, terms and fees from each lender and choose the loan you want to apply for. You can also find more resources online.

  • Philadelphia Business Lending Network provides a common application for business owners to connect with over 30 approved lenders in the area. Once you have applied for information about your loan needs, you will be connected to an interested lender within 10 business days. Compare the interest rates, terms, and fees of each lender, then choose the loan you want to apply for (any lender on this list is a good place to start). For help, call 215-683-2100 or email loan.info@phila.gov.

  • CDFI Locator is a search tool that provides business owners with a list of local community-based financial institutions. CDFIs provide financing to small businesses through loans, grants, and some provide business counseling. Find a CDFI near you and reach out to find out about their loan opportunities.

These centers provide referrals to lenders and assist with wraparound services such as business planning, administrative tasks, workshops and training.

Small Business Development Center (SBDC) is a statewide resource center for business owners seeking help with many business needs, including help finding a loan. SBDC doesn’t always provide loans or loans, but it can help you develop your business strategy and find lenders in your area. in the Philly region, temple university When Widener College There are SBDCs. You can apply for free business counseling online.

Town development corporation (CDC) is a non-profit organization that provides housing, employment, business and other services to the community. You can learn more about business loans or find referrals to other places that can help. Here is a list of CDC small business resources:.

The Philadelphia Inquirer is one of over 20 news outlets producing Broke in Philly. Broke in Philly is a collaborative reporting project on poverty solutions and the city’s commitment to economic justice. See all reports at broken in Philly.org.

Leave a Comment