Arizona Small Business Loans and Grants

Arizona is one of the largest employers of individuals within small businesses and has more than 590,000 registered small businesses in the state. There are many loan options available to residents of Arizona. Our experts explore options including state grants and the loans that offer value-for-money.

At a glance The average loan amount for small businesses within the state of Arizona is $110,000. Also, there are more than 592,000 small businesses currently registered within the state. Thus, small business make up more than 99% of the privatized workforce. They also employ almost 1.6 million people. Amongst the 50 states within the US, Arizona has been ranked as the seventh-best state to own or start a small business, and a great place to apply for loans and grants.

Top Arizona Small Business Loan Options

Asset-Based Funding

Asset-based funding is a viable option for small business owners as it allows for fast financing that owners usually require for equipment purchases, invoices, and general capital initiatives. In the state of Arizona, asset-based funding is usually provided by Balboa Capital or Crest Capital. 

Another advantage is that of the loan's flexibility and is especially helpful when it comes to outstanding invoices that often are the cause of small businesses' downfall. Outstanding invoices can greatly disrupt working capital, and asset-based funding allows for this problem to be solved based on tangible assets. 

Under usual circumstances, asset-based funding allows the lender to borrow up to 85%, while some businesses may receive 100% of their assets and debt in line with the lender's requirements. The loan is in the form of a lump sum and often has interest rates of between 8% and 13%.

SBA Local Lenders

These loans are submitted by local microlenders looking to help local small businesses and make a profit themselves. The United States Small Business Administration created the loan grant system that intended to issue grants and loans without the intermediate and traditional financial institutions. 

The SBA program allows for loans of close to $50,000. Generally, these loans are financed at rates between 8% and 13% and can last up to six years, if paid correctly and on time. While the amount of $50,000 is on the smaller side, it is much easier to obtain these loans than many other loan types, and the interest rates are relatively low. 

Furthermore, SBA lenders allow for an average or below-average credit score, making it attractive to small business owners who have struggled with financing in the past. SBA lenders typically prioritize minority groups and women, as well as disadvantaged individuals. 

Personal Loans for Business

Personal loans for businesses in the state of Arizona are usually provided by Rocket Loans or any other of the usual financial institutions with which the business has had a prior relationship. 

This loan is generally received for long- or short-term purposes and is provided in line with the individual's credit score. Your business’s credit score is taken into account when you apply for these types of loans. Therefore, it isn’t always the most attractive option for new businesses that don’t have above-average credit ratings or scores. 

The amount of the loan can greatly vary, from a small loan of a few thousand dollars to a large loan of millions of dollars, depending on the individual's prior credit history and the length of time they have been in business. This specific loan is riskier than the ones previously discussed, as if the debt isn't repaid, the financial institution could claim personal items or bank accounts, making it an option that you should generally use as a last resort.

Business Credit Cards

In Arizona, business credit cards are usually supplied by Capital One, American Express, or Chase. These loans are exclusively for small businesses and are most attractive to very new businesses that have been in existence for less than six months. A business credit card's downside is that it usually allows for a small sum of money to be loaned at very high interest rates. 

It’s advantageous for fast financing as it’s easy to apply for and generally it is simple to be approved for these types of loans. Furthermore, collateral isn’t required, as it is with most other loans, and access to the money is almost instantaneous. 

If the loan is paid off promptly each month, the interest rates can be close to zero, however, it can be as high as 15% if it is not paid off on time. In Arizona, you can receive an APR business loan related to an interest-free business loan if paid off correctly and on time, making business credit cards very attractive. 

Small Business Grants

In the state of Arizona, there’s a program specifically aimed toward granting small businesses funding. Along with the government groups, such as SBIR, STTR, or Visa, private financial institutions have been known to help small businesses get on their feet. 

The companies and the government achieve this by offering low interest rates and handing out small or large sums of initial capital. The challenge associated with grants is that you have to meet certain requirements to qualify for a grant. 

There are various programs throughout the United States that focus exclusively upon these grants. In the State of Arizona, the “Small Business Innovation Research Program” has been handing out grants to willing participants for the last two decades. To meet the grant requirements, a business plan is needed and you also need to meet certain criteria which assesses your level of disadvantage. You must also have no criminal history.

Type of Financing

Best For

Where to get it?

SBA Microloans

Affordable, Traditional Loans

SBA Microlenders

Asset-Based Financing

Specific Financing Needs/Invoice Financing

Crest Capital/Balboa Capital

Business Credit Cards

Fast Credit/Startups

Chase/American Express/Capital One

Personal Loans for Business

New Startups/Perfect Credit History

Rocket Loans

Small Business Grants

Capital Access With No Repayment


Top Online Arizona Small Business Loan Options

1. Crowdfunding

In the state of Arizona, crowdfunding is usually provided through Kickstarter or even Indiegogo. Many startup businesses face the challenge of qualifying for funding. This makes crowdfunding an attractive option to individuals who can’t get any other funding any other way. 

Usually, crowdfunding involves raising capital through an online campaign. The goal of crowdfunding is to raise the amount of capital required to get the startup business up and running. Crowdfunding isn’t as popular as more traditional loan methods. However, in the state of Arizona, many successful businesses have used crowdfunding to their advantage and have watched their businesses grow a substantial amount. 

2. American Express

American Express is another institution, which works both online and offline, with amazing options available for small businesses. American Express can help small businesses with their initial credit issues. The best option in terms of American Express credit cards is the Blue Business Plus credit card. This card is an amazing line of credit for a business starting up, especially when the business is on the small side. 

The initial sign-up fee is zero dollars, while the initial 12 months can be completely interest-free when the installments are paid on time and correctly. The minimum credit score of the individual or business should be 700, making it slightly challenging for businesses with low-credit. 

3. Chase

Chase Ink Business Cash credit card is likely the best online option for startup businesses throughout the United States, especially in Arizona. Initially, there is a bonus of $750 for opening up the account, although your business will need to spend $7,500 within three months of opening the account. 

The interest rates are very low, starting at 1% and 5%, depending on how much the individual or business spends and the amount of time it takes for it to be repaid. The individual's credit score has to be about 660, making it a great starting point for any small business. 

How to Prepare for an Arizona State Business Loan

  • Have a business plan.
  • SWOT analysis
  • Find lender working with young businesses
  • Have a good credit rating
  • Poor credit rating; look into options such as crowdfunding or business credit cards
  • Get correct paperwork in order to qualify for specific grants
  • Invoice Financing
  • Operational Financing
  • Market analysis
  • Predictive analysis
  • Try and improve credit rating
  • Explore all funding options including creative alternatives.

The Bottom Line

In the business world, the most challenging aspect is often the initial start-up costs and loans. Many people have great, innovative, and creative ideas for businesses, although most don’t have the funds they require to complete their goal. Therefore, individuals need to explore all available funding options when establishing their business.

In the state of Arizona, you may wish to begin by applying for a grant. However, to meet the requirements for a state grant an individual needs to be disadvantaged, or of a minority background, or have an business idea that will largely benefit the state of Arizona. If you don’t meet these criteria there are alternative funding methods that should be explored, such as business credit cards, invoice financing, collateral financing, and personal loans. 

Each loan option is associated with its benefits and risks profile. Additionally, if all the options for a loan or grant are exhausted without the desired result, crowdfunding or a personal online credit card loan should be examined. These are often last resorts and have no guaranteed outcome; however, anything is possible with enough creativity, desire, and the correct business plan.