Maybe it’s a coffee shop in Weaverville, a yoga studio in Crescent City, or a hardware store in Eureka—whatever your dream, a small business loan can help bring it to life.
How do you get a small business loan?
An excellent first step for potential small business owners is SCORE, a nonprofit resource partner of the U.S. Small Business Administration (SBA). SCORE offers free education and mentoring for aspiring and current business owners. Check out their guide, The Startup Roadmap: Your Guide to Successfully Starting a Business, which includes helpful information about getting a small business loan.
As you explore the many types of business loans available, make sure to look into SBA loans, which are offered through credit unions, banks, and Certified Development Companies. Because the federal government guarantees a significant portion of each loan, SBA loans are typically easier to qualify for than traditional loans. They also generally require lower down payments and have longer repayment terms, making them a smart option for startups.
How do you qualify for a small business loan?
To improve your chances of loan approval:
- Create a persuasive business plan that clearly outlines your company’s goals, financial projections, and how the loan will be used to drive growth and ensure repayment.
- Prove you have a good credit history. Both business and personal scores matter.
- Compile the documents your lender requires, which may include your business license, financial statements, tax returns, bank records, existing loan documents, and personal financial information.
Is a small business loan secured or unsecured?
Depending on your situation, you can get a secured or unsecured loan for your small business.
Secured loans are backed by collateral—like real estate, equipment, or other valuable assets—which the lender can claim if you fail to repay. Secured loans are easier to qualify for than unsecured loans, but they can take longer to fund because you need to get the collateral appraised. They often come with lower interest rates, higher borrowing limits, and more extended repayment terms.
Unsecured loans don’t require collateral but may require a personal guarantee or a Uniform Commercial Code (UCC) lien. They are more difficult to qualify for than secured loans because they have stricter requirements for your credit score and business history. Unsecured loans will likely have higher interest rates, shorter terms, and lower borrowing limits.
What is a great small business startup loan?
Since startups often struggle to qualify for traditional loans, the SBA 7(a) loan program can be a strong alternative due to its government-backed guarantee and its flexibility. This type of loan can be used for a wide range of startup needs, including purchasing or improving real estate, acquiring equipment, buying furniture and supplies, and securing working capital. Depending on the loan type and the lender, SBA 7(a) loans may be secured or unsecured, with either fixed or variable interest rates. Be sure to explore the different types of SBA 7(a) loans available to find the best fit for your startup.
What about small business loans for women-owned businesses?
If you’re a woman entrepreneur, consider reaching out to one of the SBA’s Women’s Business Centers (WBCs), which assist women in starting and growing new businesses. WBCs offer helpful resources, including business training, counseling, federal contracts, and access to credit and capital.
Where can you get a business loan in Humboldt, Del Norte, or Trinity County?
Coast Central Credit Union can help you get the funding you need to grow your business. We offer a variety of options for small business owners, including:
- SBA 7(a) loan
- SBA 504 financing
- Commercial real estate loans
- Vehicle and equipment loans
- Lines of credit/working capital
- Purchase and refinancing options
With Coast Central, you’ll get personalized service, local decision making, fast approvals, and flexible terms. Contact our Member Business Services team today!
Coast Central – Where YOU are central.