California has nearly 4 million small businesses within its borders. The golden state depends on these companies to improve its economy. As a small business owner in the state, acquiring working capital can prove beneficial to your business. With sufficient cash flow, you can pay for invoices and other business expenses.
Loans can be used to meet a variety of needs, including the purchase of consumables and the purchase of real estate, to expand the business. This guide provides detailed information on the variousCalifornia Small Business Loans.
Accion quick loans
Although Accion offers loans to small businesses across the country, only small California businesses have access to quick loans. Especially in the counties of San Bernardino, San Diego, Riverside and Imperial.
Companies in these counties can access loans ranging from $ 300 to $ 8,000 with a three-year repayment plan. Initially, the interest rate ranges from 14% to 18% with an additional 1% discount for veterans, on active duty and their spouses.
Quick loans are available three days after approval. Some of the requirements for applying for an Accion quick loan include:
Tax declarations for companies for the previous year
At least 550 credit points
Small Business Loan Guarantee
The Californian government is working with various FDCs (Financial Development Corporations) to allow small businesses access to the loan guarantee program. The program provides 80% to 95% of small business loans from the FDC.
Eligible entrepreneurs under this program must run a small business in California with a maximum of 750 employees. Small business loans are available up to $ 20 million, although the guaranteed maximum is $ 2.5 million. The average maturity of these loans is at least seven years. Finally, depending on the direct lender offering the loan, the interest rate may vary.
VEDC (Valley Economic Development Center)
This nonprofit organization offers three types of small business loans. Standard business loans can range from $ 50,000 to $ 500,000 with repayment terms of six months to five years. Generally speaking, the original charge is between 2% and 3% with a minimum interest rate of 8%.
VEDC microloans are usually of small value and range from $ 2,500 to $ 50,000. Like standard business loans, VEDC microloans take six months to five years to pay off. VEDC microloan interest rates range from 5% to 7.7%. You can expect an original commission of 3% to 5% on VEDC microloans.
Micro business loans are the smallest loan plan ranging from $ 500 to $ 2,500. The interest rate on these loans is 8.5%, payable from six months to two years.
SMART financing program
The Los Angeles County Housing Authority / Community Development Commission offers this program to extend financial aid to small and medium-sized businesses. Companies in industries such as transportation, engineering, and medicine can apply for these loans. The SMART Funding program offers loans ranging from $ 25,000 to $ 1.5 million.
These loans can be used for various purposes such as purchasing real estate, purchasing infrastructure, renovating leases, and developing products. You can also use the funds for:debt refinancing, retain workers and create jobs.
CalCAP (California Capital Access Program)
CalCAP has a loan loss provisioning program that covers 100% of loans made by qualifying lenders to small California businesses. Under this program, business owners could apply for a maximum loan of $ 5 million.
Nevertheless, some borrowers seeking loans under this scheme can only get up to $ 2.5 million in share capital over three years. Only California companies can qualify for a loan under the CalCAP program. At least 51% of your employees, payroll, profits, or company revenues should be based in the State of California.
Is my business eligible for a California loan?
Different lenders may have different eligibility requirements. However, most lenders consider the following:
Annual revenue of the company
How long have you been in business
You may need to establish a business loan that will be separate from your personal credit score. Your chances of qualifying for a loan are higher if your business has high creditworthiness. For start-ups, your business may not be eligible for SBA and banking loans. Therefore, you should apply for short-term financing and micro-loans.
If your business is not eligible for the above loans, you can apply for online loans. Nevertheless, seeking community foundations and online funds are not mutually exclusive. Before making a decision, consider the resources available at the local, state, and national levels.