The Most Popular Small Business Loans in California

Popular Small Business Loans

No matter the industry, most companies require financial assistance at some point in their existence.

When your company needs money, how do you plan to obtain it? Look to the small business loans California companies rely on for success. Loans can help you start a business, stay afloat and pay for expected and unexpected expenses.

Reasons To Open a Small Business in California

Starting a small business is overwhelming, no matter the state you live in. However, there may be many benefits to keeping the company within the state’s borders for Californians.

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Economic Benefits

From 2016 to 2017, California’s gross domestic product went from $127 billion to $2.7 trillion. Did you know that if California were a country, it would be the fifth-largest in the world? The economy continues to grow and if you own a small business, you can take advantage of the economy and receive a consistent profit.

Talent and Network Opportunities

California has one of the largest populations in the country. Due to its size, it has one of the largest talent pools possible. Many educated and wealthy citizens call California home, so you can count on having a competitive field and qualified candidates.

Additionally, many other companies choose to conduct business in California. While some house themselves in the state, others visit conventions and conferences. Whether your industry is niche or large, you will likely find various networking opportunities.

California Business Incentives

The government of California provides various incentives for entrepreneurs to open businesses in the state. One of the most encouraging benefits is the California Competes Tax Credit. This income tax credit is for anyone who wants to start a business within the state. Additionally, to train your employees and upgrade their skills, you may qualify for funding from the Employment Training Panel.

small business loans in california

Popular Business Loans in California

When your small business requires financial assistance, there are various loan options to take advantage of. Determining the loan best for you depends on your budget, time in business, and other factors. The following are some of the most popular business loans offered to California small businesses.

California’s Loan Guarantee Program

The California Infrastructure and Economic Development Bank or IBank has a small-business loan guarantee program. If your small business has a capital access barrier, the program encourages lenders to provide funds for your business. The idea behind the program was to support small businesses and entrepreneurship. IBank provided $229 million to small businesses in one year alone with over 20,000 loans offered since the early 2000s.

To qualify as a small business, you must have between one and 750 employees. When applying for the loan, you do not apply as the borrower. Instead, your company is the borrower. While you can become the guarantor or co-borrower, your business receives the financing.

SBA Loans

Small Business Administration loans are not only for Californians. The U.S. Small business administration partially guarantees the loan. SBA loans tend to be favorable because they have lower interest rates and flexible terms compared to other loans. Unlike other loans, the SBA loan is competitive and has lower fees and longer terms. However, to receive an SBA guarantee, your company should have a credit score that starts at 690 and strong revenue.

Californians interested in an SBA loan need to go to their preferred financial institution in the state. Business owners apply for a loan through traditional institutions, but it helps to choose an institution that processes SBA loans often. Once approved for an SBA loan, the SBA guarantees part of your loan so the bank does not have to worry about you defaulting. 

California Capital Access Program for Small Businesses

CalCAP is a program for companies seeking small business loans in California. The program offers assistance to financial institutions that provide loans to small businesses. Providing small business loans can be risky for many institutions. CalCAP serves as a reserve that underwrites losses. The proceeds of the loan need to benefit California’s economy.

Businesses can use the money to pay for expansion, equipment, and capital funds. To be eligible for CalCAP, you must own and operate your business independently. Additionally, you must have a positive cash flow and have no more than 100 employees. Of your employees, most need to be located in California. The maximum loan a company can receive is about $2,500,000. 

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Accion Rapid Loan

The Accion Rapid Loan is for California businesses only. When it comes to California small business loans, the Rapid Loan is specifically for those in San Diego, San Bernardino, Riverside, and Imperial counties. The loan amount tends to range from about $300 and $8,000.

The purpose of the rapid loan is to receive the money as quickly as possible. If eligible, you may receive approval in about three days.

SMART Funding Program

The SMART Funding program is run by the Los Angeles County Community Development Commission. The program is available for small to medium-sized businesses and provides amounts from $25,000 to $1.5 million to companies. For businesses to qualify for the SMART Funding program, the company should be a part of the following industries:

When you receive the loan, your company can use it for general expenses, real estate acquisition, job creation, debt refinancing, and any other costs related to running your company.

Alternatives To Traditional Funding

For accessing business loans, equipment financing, revenue advances, and more, Platform Funding reduces the time you spend searching for financial assistance. We offer an easy three-step application process. After you apply, we set you up with a business funding specialist. The specialist determines your borrowing needs and helps design a program tailored to your company and your needs. It fits with your budget, revenue, requested amount, and desired repayment terms.

At Platform Funding, we understand how critical financing is to the success of your small business. We are happy to answer all of your questions and concerns. To get started on quick and flexible funding, contact us as soon as possible!