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Pennsylvania Small Business Loans

If you wondered which state would be the best to get a small business loan, then look no further than Pennsylvania. Just last month, Pennsylvania secured one billion dollars. If you are strapped for cash and want to start a business, you know where to move to.

At a glance There are several local small business loan options around for entrepreneurs in Pennsylvania. You should also look into the benefits you may qualify for if you have a unique situation. Many institutions are keen to help people with a good backstory. So if you're a woman struggling to make ends meet and your entrepreneurial spirit lifted yourself and your family out of poverty, it will be worth mentioning. So do some research on the possible benefits you can get.

 

Pennsylvania, the Best State to Get a Business Loan 

Small businesses loan amounts in Pennsylvania range from as little as $1,200 to as much as $250,000. Pennsylvania boasts over one million small business entrepreneurs, which means the state makes up more than 3% of small business owners in the country. Its small businesses form a staggering 99% of Pennsylvania’s business economy. In other words, Pennsylvania is known for treating its entrepreneurs with the utmost respect and value. As you can see, small businesses are key to Pennsylvania’s economic well-being. 

Top Pennsylvania Small Business Loan Options 

Here’s a list of each local loan provider in some of the states with the benefits of each loan, the loan amounts, rates, and any other useful features. These include banks, NGOs, and government institutions.

1. Pennsylvania Industrial Development Authority

PIDA offers low-interest business loans that are less expensive than bank loans. PIDA’s terms and loan amount ranges from less than $100,000 for capital purposes, and the loan amounts get bigger if the purpose is for machinery (up to $1.5 million) or construction (up to $2.25 million). The repayment period goes from three years to 15 years for the respective fields. PIDA can be a bit strict when it comes to giving out loans, so you’ll need sufficient collateral to qualify. PIDA has a 2% fixed interest rate for fifteen years or a 1% fixed rate for seven years.

2. Community First Fund

Community First Fund is another NGO. It’ll be highly beneficial for you if you're from a certain previously disadvantaged group since most of their loans are given to finance these groups. If you’re investing in your community, there are also programs you can use. Loan amounts are less than $50,000 for startups. The interest rate is merely 1%, and there are no payments necessary for the first 10 months. This renowned NGO also provides training for entrepreneurs.

3. Small Diverse Business Capital Access Program

The Small Diverse Business Capital Access Program (SDBCA) target market is entrepreneurs from minority groups. You can have less than 100 employees to qualify. 

The maximum loan amount depends on what loan you're applying for. If you're applying for a line of credit, the amount will be up to $100,000, whereas if you're applying for a term loan, the amount will be up to $200,000. To start, you’ll have to get certified via the Pennsylvania Department of General Services as a minority group. SDBCA’s interest rate is 2% for the duration of the loan of small business owners.

4. Freedom Credit Union

Freedom Credit Union has been around for quite a while. Credit unions offer better rates, fees, and extra services than banks do. The catch is that you’ll have to be a member of the Freedom Credit Union.

Freedom Credit Union gives you three options, including term loans, business credit cards, lines of credit, real estate, as well as business vehicle loans. Freedom Credit Unions are easy since they don’t reject your application so sternly as many banks would. Credit cards for business purposes hold a high value so that you can make the kind of purchases that your business needs to succeed.

5. Mid Penn Bank

Mid Penn Bank is great at working with smaller businesses to accompany their needs.

Mid Penn Bank specializes in agricultural loans, which means that if you're a farmer in Pennsylvania, you're in luck! The maximum loan is $2 million, and the interest rate is 3.75% for business owners or 2.79% for NGOs. The repayment is for two years, and no collateral is needed for PPP members.

6. FINANTA

Some of the benefits of FINANTA include that interest rates are fixed, and there are no penalty fees or minimum credit score needed. While rates are only 3.75% for small business owners the loan amount ranges from $1,200 to $250,000. A very useful feature includes the training that FINANTA provides to run your business more efficiently.

Summary of Best Business Loan Options in Pennsylvania

Loan

Features

Pennsylvania Industrial Development Authority

You can get up to15 years for construction projects, and interest rates depend on the ever-changing market.

Community First Fund

CFF and FINANTA have been recently working together, and they’re changing some methods to increase the impact they make on communities. Many newer features will come out of this collaboration.

Small Diverse Business Capital Access Program

CEDO or

Certified Economic Development Organizations will help you step-by-step through the application process and give you useful tips on how to proceed.

Freedom Credit Union

Unions like these have higher approval rates than bigger banks. They’re also more geared for the local market.

Mid Penn Bank

Mid Penn Bank makes credit available for businesses that can’t attain traditional financing. You have the option to receive this loan in a lump sum or arrears.

FINANTA

FINANTA is excellent for aspiring entrepreneurs since they give you different services and products at each development stage, for example, IT and different training services.

Top Online Pennsylvania Small Business Loan Options 

Online business loans have become more popular over the last decade as banks have receded from giving out loans to small businesses. The lenders online often provide easier and faster access to small business loans than banks do but at higher rates. Businesses should consider online loans if they get stuck at the bank. Here are the top providers of online business loans and why: 

1. Fundbox

This online lender needs no guarantees and gives you quick and flexible credit up to $150,000. They have low minimum credit score requirements and they have no hidden fees, so it’s easy to see why this one is recommended above other online lending options.

2. Fundera

This site is a PPP hub that not only connects you to the most affordable loans from banks across the country online but is also fast and convenient. They also make it easy to get personal advice, so if you aren’t sure about how to undertake your small business loan then they can advise you on the best course of action.

3. Ondeck

This one provides a discount for prepayment, so you’ll be able to lower your rates if you pay sooner than expected. They provide short term loans if you’re looking to start small and pay quickly.  

Additional Pennsylvania Small Business Financial Resources

Beyond the commercial loan programs and the online lenders mentioned above, Pennsylvania also provides additional financial resources such as government offers or small business grants. The grants listed below include state grants, local grants, as well as national grants.

 

Other Resources for Pennsylvania Small Businesses

Beyond financial assistance, Pennsylvania also provides resources like access to coaching, mentorship, and networking with other business owners. The resources have been listed below:

How to Prepare for a Pennsylvania Small Business Loan

Here are the steps that you need to take to ensure that you’re in the best position to qualify for an affordable loan in Pennsylvania:

  • Register your business. This is the first important step. Registering your business means that you can buy or sell your services or products legally.
  • Consult a lawyer, accountant, and insurance agent. They’ll help you with the legal side of things.
  • You need to turn your idea into a well-thought-out business plan. This is where you will have to strategize and figure out the logistics, do your market research, and figure out all the costs involved in operating your business, as well as how you’ll advertise your business and what you’ll pay employees.
  • You need to name your business. You’ll have to make sure that you’re not stealing any other business name, and you’ll have to trademark it.

You can also improve your credit score. Improving your credit score helps when applying for a loan so that you’ll be accepted more easily.

The Bottom Line

The best small business loan depends on what your needs are. If you have bad credit, you’ll want an option that is more lenient with this. If you want to have a bigger loan, or you want a longer repayment package or a lower interest rate, then you’ll have to look for the things that are most important to you as a business owner and choose a loan that suits you.

If you’re a previously disadvantaged person, then you’ll have better luck in institutions that give discounts to your affected group. I would also strongly recommend that you also look for online loaning options since you might not always find what you’re looking for in your state. For example, the online lender ‘’Lendio’’ is seen as the best one overall and would be a great place to start looking.