Small-Business Loans in Arizona: How to Get Funding

A business needs working capital to keep operating, and even established businesses may need extra cash at times. Let’s say you want to open a second location, but your profits alone can’t fund the expansion — you’ll need a backup plan. In fact, one of the main reasons small businesses fail is a lack of funding.

Luckily, small-business owners have options when it comes to financing. Arizona is fast becoming a draw for entrepreneurs, from the state’s lower tax rates to its competitive business incentives. Learn about loan options available for your Arizona business.

How Do You Choose the Right Loan for Your Arizona Business?

To choose the right loan for your Arizona business, you need to know your business goals.

What do you need to fund? Are you a startup with a new venture? Are you an entrepreneur considering a new location, or do you need additional working capital to keep operations going?

You should have a good understanding of your company’s financial health, as well. Can your cash flow handle the additional payments? This information can help you find a suitable financing option for your business, whether you’re in Tempe, Tucson, or Phoenix.

Common Types of Arizona Business Loans

There are several types of business loans. That’s why it’s important to do your research or work with professionals like Clarify Capital to navigate the loan process.

We can help you with the following small-business loan options:

SBA Loans

The U.S. Small Business Administration ( oversees SBA loan programs like SBA 7(a), SBA 504 loans, and microloans (where the borrower receives funding from an SBA lender, such as a bank, credit union, or nonprofit organization).

SBA loans typically offer the lowest interest rates because the loans are guaranteed by the SBA. If a borrower defaults on the loan, the government pays up to 85% of the unpaid balance to the lender.

SBA loans cater to all financing needs, including commercial real estate loans, refinancing current debts, and equipment purchases.

Short-Term Loans

A short-term loan is a type of financing that allows business owners to borrow a fixed loan amount with a set interest rate and repayment terms. Then, the loan is repaid through regular payments based on the term length, which ranges from six months to two years.

Most short-term loans don’t require collateral, and lenders don’t typically put conditions on how businesses can use them. That’s why they’re one of the most popular loan options for businesses.

Business Line of Credit

A business line of credit (LOC) provides entrepreneurs with a revolving credit limit that works like a business credit card. You have access to cash that you can withdraw as needed.

The main advantage of a line of credit is that you only pay interest on the amount you use. This is why it’s an excellent financing option for businesses needing quick access to working capital.

Equipment Financing

An equipment loan is designed to fund businesses needing necessary machinery and assets to run their day-to-day operations. Borrowers use equipment financing for a wide array of purchases, such as medical equipment, farm vehicles, or computer hardware.

You can apply for equipment loans through traditional banks and online lenders. The equipment serves as collateral for the loan, so this type of financing is easier to qualify for than some other options.

Invoice Factoring

Invoice factoring lets business owners borrow money using accounts receivables as collateral. Factoring companies typically offer up to 100% of the total invoice value for a fee.

With this type of financing, you receive cash upfront based on your agreement. You also negotiate a factoring with the lender. Then, when your unpaid invoices come due, the lender collects from your customers. The factoring company takes their fee, and any remaining amount is paid to you.

Merchant Cash Advance

Similar to invoice factoring, a merchant cash advance (MCA) isn’t technically a loan. It’s an alternative funding option for business owners who can’t qualify for traditional business loans.

With a merchant cash advance, you can get funding without collateral or personal credit requirements. With this type of financing, you receive an advance in exchange for a percentage of your future sales. So, the amount you repay on the loan depends on your daily or weekly sales.

How to Get a Small-Business Loan in Arizona in 5 Steps

Getting a loan is a decision that could impact your business’s growth. It’s important to take the time to assess your company’s needs before you start applying for a business loan.

Check out the steps below to assist in your decision-making.

Step 1: Determine How Much You Need to Borrow

Before submitting loan applications, you should know why you need the capital. Plan how you’re going to spend the money. Are you buying new equipment, stocking up on inventory, or adding new products?

Next, estimate what your project will cost. For example, if you’re renovating a storefront, assess the cost of labor, materials, and other expenses. Once you have all this information, you can begin looking for the best suitable loan for your needs.

Step 2: Determine Your Business Loan Eligibility

When looking at different types of financing, take time to learn the qualifications lenders require from borrowers. You should know the eligibility requirements, such as your personal credit score, your company’s annual revenue, and how long you’ve been in operation.

Check your credit score and assess your company’s current financial standing. This gives you a realistic view of the loan amount, interest rates, and terms you can afford to borrow.

Step 3: Gather the Required Business Information

The qualifications and documents you need to submit depend on the lender, but you’ll typically need:

  • Business financial statements (e.g., profit and loss statements, balance sheets, projected financial statements)
  • Business certificate or license
  • Income tax returns
  • Your business plan

Step 4: Apply for an Arizona Small-Business Loan With Clarify Capital

When you partner with Clarify Capital, you are in full control of the process, but we do the work. Call us to apply, or fill out the online application. It only takes two minutes!

Your Clarify advisor will help you choose the best business financing solution based on your needs and qualifications. In addition, we have a wide selection of lenders in our marketplace, so you can get the best rates.

Step 5: Get the Funding You Need for Your Arizona Small Business

Have your documentation ready to go. Depending on the type of loan you apply for, you can get approved the same day.

Once approved, you can receive funding in your bank account in as little as 24 hours!

Arizona Small-Business Loan FAQs

If you’re ready to seize new opportunities by starting or growing your business, get the basic information on small-business loans in this FAQ section.

What’s the Best Loan Option for Arizona Small Businesses?

The best loan option for your Arizona small business is one that applies to your situation and provides a solution for your business needs. For instance, if you need new equipment, you might consider SBA loans, short-term loans, or equipment financing.

Then, consider the requirements you need to meet, how much you can afford to repay, and what term length is best for you. SBA loans have strict credit requirements. Meanwhile, the monthly payments for a short-term loan may affect your cash flow. So, if you have a bad credit score and are looking for lower monthly payments, the best solution might be to take out an equipment loan.

How Long Do You Have to Be in Business to Get a Business Loan?

Generally, you have a better chance of getting approved for a loan the longer you’ve been in business. Banks usually require companies to be operational for at least two years.

When you apply with Clarify Capital, we recommend you be in business for at least six months.

What Credit Score Do You Need to Get a Business Loan in Arizona?

Credit score requirements depend on the lender. Banks and credit unions may require personal credit scores as high as 670, which is generally considered good. At Clarify, we recommend you have a minimum credit score of 550.

If you’re worried about your credit score, call and speak to a Clarify advisor to explore how we can help you get the funding you need.

Find the Best Arizona Small-Business Loan for You With Clarify Capital

Entrepreneurship isn’t for the faint of heart, that’s for sure. Running a business is a huge responsibility, whether you’re starting a new business or taking over an established company.

On average, small-business owners spend $40,000 in their first full year. That’s why having access to capital is crucial to entrepreneurs.

If you’re running a business in the Grand Canyon State, let Clarify Capital help you get the funding you need to realize your goals and develop your company to its full potential. Apply for funding today.

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