Search
alaska

Top Traditional and Alternative Choices for Alaska Small Business Loans

Current Small Business Administration statistics indicate there are around 73,298 small businesses in Alaska. This makes up 99.2% of all businesses across Alaska. Lending institutions in the Alaska District granted 82 small business loans. This was during the last financial year and totaled $35.9 million.

At a glance Financial analysis shows Alaska as the best state to get a business loan. This state views small businesses as integral to the economy. However, finding the best option for Alaska small business loans can be overwhelming. In this review, we’ll provide you with clarity and the top traditional and alternative loan options. We will also look at the small business loan requirements in Alaska and how to get a small business loan in Alaska.

Top Four Alaska Small Business Loan Options 

First National Bank Alaska 

First National Bank Alaska is the Alaska 504 Loan Lender of 2020 due to their Small Business Administration 504 loan program. This program issued loans totaling approximately $12 million.

They’re well known as a preferred lending partner, which means they can process your application faster than lenders that are not part of the SBA Preferred Lender Program.

Their Small Business Administration 504 loan program provides financing of up to $5 million. Financing may be used to buy fixed assets like real estate, buildings, or machinery. The program offers rates below the market rate and various repayment options.

The loan amount is distributed across three entities. The applicant or owner provides a minimum of 10%. A selected conventional lender like a bank provides 50% and a Certified Development Company, which is a non-profit organization, provides 40%. The owner, therefore, gains more working capital to grow their business.

Wells Fargo Bank 

Wells Fargo Bank NA was the winner of the Alaska Small Business Administrator Lender of the Year award. They issued loans of about $8.4 million and are considered one of the best banks for typical and SBA loans in Alaska. They’re part of the SBA Preferred Lender Program and can therefore process applications faster than other lenders.

They offer long-term financing for businesses with a net worth of less than $15 million and an average net income of less than $5 million. Fixed or variable interest rates apply.

The Wells Fargo SBA 7(a) loan is suitable for acquisitions, buy-outs, expansion, and buying real estate or equipment. All can be combined into a single loan of up to $5 million.

The SBA 504 loan is suitable for business expansion through land or building acquisition, construction, or equipment purchase. Loans go up to $6.5 million for the portion from Wells Fargo and up to just over $5 million for the portion funded by a Certified Development Company.

Alaska USA Federal Credit Union 

This is a not-for-profit, member-owned financial services cooperative. They were founded in 1948 with branches in Alaska and other states in the USA.

Alaska USA offers a full range of financial services and SBA Loan programs:

  • SBA 7(a) loan program for buying real estate, constructing buildings, renovation or expansion of buildings, purchasing machinery, equipment, inventory, and providing working capital. It’s a longer term financing option with a minimum of $50,000.
  • SBA 504 loan program for buying fixed assets, construction, expansion, or renovation of land and buildings, or buying long-life equipment. It’s a longer-term financing option with a minimum of $250 000.
  • Express loan program for loans from $25 000 up to $350,000.

Interest rates and fees may differ based on the loan program selected, borrower credit score, and loan amount and term. Loan eligibility criteria also differ based on the loan program selected.

Alaska Growth Capital BIDCO, Inc.

Alaska Growth Capital BIDCO, Inc. is a non-bank lending company based in Anchorage, Alaska, and has been appointed SBA Community Lender of the Year nine times. It was founded in 1997 to promote economic development and job creation. They offer loans, investments, and managerial assistance to businesses. 

AGC provides a varied range of small business loan offerings. The average loan size is $1.2 million, and a typical loan size ranges from $500,000 to $10 million for companies with $1 million to $100 million in revenue. 

Niche solutions are available for:

  • Borrowers that don’t meet traditional bank requirements
  • Growth companies with limited collateral and adequate cash flow  
  • Businesses in the rural markets

They offer loans for:

  • Long-term working capital to support growth
  • Acquisition or change of control
  • Equipment or real estate purchase
  • Refinancing of debt

They offer terms up to 30 years that are fully amortizing and a typical variable prime rate of plus 2.75%.

 Summary Table

Provider

SBA Offerings

Loan size

Terms and Fees

First National Bank Alaska

SBA 504

Up to $5 million

Various repayment options

Fees below the market rate

Wells Fargo Bank

SBA 7(a)

SBA 504

Up to $5 million

Up to $11.5 million

Long term

Fees varies

Alaska USA Federal Credit Union

SBA 7(a)

SBA 504

Minimum $50,000

Minimum $250,000

Long term

Fees varies

Alaska Growth Capital BIDCO, Inc.

No SBA offering

Loans for:

Non-qualifiers, low collateral

Long-term working capital to support growth

Acquisition or change of control

Equipment or real estate purchase

Refinancing of debt

 

Average $1.2 million

Range $500,000 to $10 million

Up to 30 years

Prime plus 2.75%

 

Top Online Alaska Small Business Loan Options

 

Local small business loan providers typically have nearby branches and understand the local conditions. This seems to make them the preferred choice, but they’re by no means always the best or only option. Small businesses should also consider online business loans that are nationally available alongside local small business loan offerings.

In this section, we look at the top online lenders and their benefits and features:

1. Clearbanc

Founded in 2015, they’ve invested in over 4,000 eCommerce and Consumer SaaS (software as a service) businesses as the biggest eCommerce investor worldwide. They use predictive models that analyze your revenue, performance, and other third-party data. This is used to determine your eligibility and to generate the funding you qualify for between $10,000 and $10 million. Funds can be available in under three days.

Clearbanc is a leading provider of small business loans to women, and funds eight times more women business owners than the competition. They charge a small flat fee on the capital provided, ranging from 6% to 12%, depending on how you spend the funds and a fixed percentage of your daily sales until the capital and flat fee are repaid.

Their minimum eligibility criteria include an average monthly revenue of at least $10K for at least six months, and the business must be incorporated in North America or the United Kingdom.

 Advantages:

  • Simple pricing
  • One flat fee and flexible repayment options
  • Unique revenue share model allows repayments only while making revenue 
  • Military-grade data encryption when handling your information
  • Backed by trusted investors

2. Fundera

Fundera doesn’t offer loans themselves but acts as a matchmaker between lenders, loan providers, and other financial institutions. It has been in business since 2013.

Each lender is matched with an experienced lending specialist who will familiarize themselves with your business needs and ensure that the loan solution is tailored to your business requirements. As a lender you simply need to complete one application, and the technology will match you with various products and will also determine your eligibility.

Fundera facilitates SBA loans, of which 85% can be SBA guaranteed for equipment financing and merchant cash advances. Fundera compares SBA 7(a) loans and other options for free - up to the value of $1 million. Funds are available quickly with variable fees as low as 6%.

Fundera can also be used for invoice factoring, low-interest credit cards, and loans for bad credit. 

  Advantages:

  • Wide range of products
  • Services such as introductions to credit card and checking account providers
  • Startup company friendly
  • Negotiate best deals on behalf of lenders
  • Offers transparency in dealings
  • Easy to tailor and get personal advice
  • Comprehensive updated information and advice

3. BlueVine

Founded in 2013, BlueVine offers high levels of customer service and loan access to businesses who may have a low chance of qualifying for other loans in Alaska.

BlueVine business loans are short-term business loans that span for between 6 and 12 months. A fixed interest rate from 4.8% upwards is offered, depending on factors such as the repayment period. Loan repayments are due weekly. They handle business loan reviews, loan agreements, and payments in a flexible and speedy manner. They also offer a line of credit of up to $250,000.  

 Advantages:

  • Loans arranged and approved very quickly
  • Funds available in days
  • Competitive interest rates
  • Online service
  • Excellent person-to-person customer support

4. National Funding

Founded in 1999, National Funding has provided funds of over $2.5 billion to more than 40,000 businesses across the USA. They offer a wide variety of loans and include loans for bad credit scoring businesses and the National Funding Edge Credit Card. Small business loans range from $5,000 to $50,000. Businesses can use them to cover the costs of anything from inventory and marketing to payroll and taxes across a wide range of sectors such as beauty and wellness, construction, commercial mortgage, retail, agriculture, restaurant industry, etc.

National funding has dedicated loan specialists to fully unpack your business needs and to provide you with guidance regarding your loan choice.

Repayments can be made either daily or weekly. National Funding also provides equipment financing and leasing up to $150,000. Merchant cash advance and credit card processing services are additional business solutions also on offer.

 Advantages:

  • Easy application process
  • Fast funding decisions
  • Funding in 24 hours from approval
  • Bad credit rate friendly
  • Partnership approach
  • Personalized approach

Additional Alaska Small Business Financial Resources

Within the state of Alaska, there are several governmental and other institutions that offer additional financial resources for small businesses. These include: 

  • State of Alaska Loan Program
  • Spruce Root's Loan Program
  • Alaska Commercial Fishing and Agriculture Bank
  • Juneau Economic Development Council

Other Resources for Alaska Small Businesses

The state of Alaska also provides non-financial resources like mentoring, advice, workshops, tools, etc., to small businesses to help them grow and create measurable economic impact throughout Alaska. These include the Alaska Small Business Development Center and the Department of Commerce, Community, and Economic Development.

How to Prepare for an Alaska Small Business Loan

There are also a few key steps you need to take to ensure that you’re in the best position to qualify for Alaska small business loans. These steps include:

  • Obtain the required business license and zoning regulations
  • Register the business name
  • Open your business bank account
  • Improve your credit score as it’s difficult to qualify for a small business loan with a credit score lower than 700
  • Prepare an impressive business plan
  • Show strong business financials with ample collateral with accounts receivable and accounts payable
  • Improve your business credit report
  • Ensure tax compliance, know your federal tax responsibilities, and obtain federal and state tax IDs
  • Prepare and clean your background
  • Prepare your resume as evidence of management or business experience
  • Prepare legal documents such as copies of contracts, franchise agreements, and commercial leases

The Bottom Line

Business owners may require a small business loan for many reasons, including a short-term boost to cash flow, buying pricey equipment, and expanding their business. Business loans are commonly used to pursue growth and to consolidate high-interest debt to ensure the survival of the business.

All variables of a loan have to be carefully considered to ensure that you can afford to pay back the loan and to make sure that you’re getting the best deal in Alaska small business loans. Failure to repay your loan will reflect poorly on your personal and business credit score and might end up costing you your business.

Variables include terms, fees, rates, application processing times, and loan flexibility. The offerings from banks and credit unions are well established and offer great value, but don’t hesitate to consider partnering in the online lending marketplace. Their flexibility sometimes offers superior funding options and can be less risky for borrowers.