Small Business Loans in Philadelphia: How To Get Funding

Do you have a business in the city of Philadelphia? Congratulations on choosing a great location to build your company!

Philadelphia’s placement in the tri-state area makes it easily accessible to people in New York, southern New Jersey, and Delaware. This means you have a large customer base and a better chance of finding people who want your product or service.

But to start and grow a business, you need capital. Fortunately, there’s a plethora of small business loan options available. Keep reading to find out more.

How To Get a Small Business Loan in Philadelphia

A business loan can help you build a successful company or saddle you with payments you can’t afford. That’s why you need to be strategic with your approach. Here are some steps to help you get the funding you need.

Step 1: Prepare and Do Your Research

If you’re new to business lending, the terms, process, and types of loans available can be overwhelming. That’s why research and preparation are critical.

Business owners typically take out loans to fund an expansion, cover operating expenses, or refinance existing debt. So, before you look for loans, know why you’re borrowing money and calculate how much you need.

Next, you should understand the factors that impact your ability to borrow. Eligibility requirements depend on the lender and the type of loan you’re applying for. But most loan providers consider your credit score, how long you’ve been in business, and your annual revenue to assess your creditworthiness.

Step 2: Gather All Necessary Documentation

The documents you’ll need to provide also depend on the lender and the type of loan you’re applying for, but it often starts with the following documents:

  • Personal identification documents (such as your driver’s license, passport, tax ID, and Social Security number)
  • Business licenses and certificates (including business permits, Articles of Organization, or Articles of Incorporation)
  • Any personal and business tax returns
  • Business financial statements (think balance sheets, cash flow statements, profit or loss statements)
  • Collateral documentation (any real estate certificates and titles)

Step 3: Have Your Business Plan Ready

You won’t need to submit a business plan for every loan you apply for, but creating one is still a great idea. The first part of your business plan is the introduction. Talk about your mission, your products or services, and your team.

In addition, describe how you make money and put in your long- and short-term goals and plans for your company. Include the result of your market analysis that shows the demand for your product or service. A detailed business plan is useful — not just to the lender but also to help you get to know your company inside out.

If you’re crafting a business plan as part of your loan application, discuss how you will use the loan and plan to pay for it. Check out if you don’t know where to start.

Step 4: Choose the Right Lender

When choosing a lender, consider the types of loans they offer. Then, compare interest rates, fees, and repayment terms. You should also look into how fast you can get funding with each lender.

Traditional lenders like banks and credit unions typically offer lower interest rates but have stricter requirements. For instance, most banks require a credit score of 700 or higher. And you can get approved for business loans easily if you have an excellent credit score and an established company with solid cash flow.

However, you might not meet those requirements if you’re a new business. The same is true if you have poor credit. So, choosing a lender that offers the loan you’re looking for with requirements you can meet is important.

At Clarify Capital, we strive to get you the capital you need, whether you have good or bad credit. When you apply, you’ll get partnered with a Clarify adviser who will walk you through the process. You get personalized advice so you can choose the best financing option based on your business needs.

Step 5: Submit Loan Application for Approval

You get our expertise when you apply for a loan with Clarify Capital, and you’ll get matched with an adviser who will work with you every step of the way. Have your documents ready, and you can get approved the same day. Then, you can expect money in your bank account in as little as 24 hours.

Types of Business Loans Available in Philadelphia

Now that you know how much you want to borrow and why, it’s time to get acquainted with the different types of loans in the market. Each form of business loan has its advantages that could be the right solution for your financing needs.

Here are a few small business loan options we offer at Clarify Capital.

Working Capital Loan

Working capital loans provide businesses with financing for operating expenses. Companies can experience cash flow gaps for many reasons, such as delayed customer payments or a slow sales season. Working capital loans help pay for business expenses like rent, utilities, and wages and salaries.

Check out the top business working capital loans.

SBA Loan

The U.S. Small Business Administration is a government agency designed to strengthen economic development by assisting small business owners. In this regard, the SBA offers free business counseling and loans to foster business development. They also aid in community development and partner with nonprofits to provide grants.

The funding you can get through the SBA loan programs has low interest rates and longer repayment terms typically. In addition, some loans have lower credit score requirements than banks. You can borrow SBA loans to fund a startup, purchase commercial real estate, or cover working capital.

Merchant Cash Advance

A merchant cash advance (MCA) is technically not a loan but an advance against your future sales. With this type of financing, you receive cash upfront that you pay back through your merchant account. A percentage of your sales pays the loan amount plus the factor rate.

Cash advance agreements provide financing options to small business owners who can’t get approved for other forms of funding. Are you looking for a way to get capital quickly? Apply for a merchant cash advance in Pennsylvania today!

Business Line of Credit

A business line of credit provides entrepreneurs with a revolving loan they can use to cover immediate business needs. Revolving credit means borrowers can draw, repay, and withdraw from the account as needed. It’s a flexible business funding option for owners who may not need cash now but want access to capital when they need it.

Short-Term Business Loan

A short-term business loan provides business owners funding quickly and easily, with some lenders even offering same-day approval. Although some loans are secured, most term loans have no collateral requirements.

Once approved, you receive a lump sum amount you repay with interest over a short-term period. Your payments are in fixed installments divided over a term length ranging from six months to two years.

Philadelphia Business Loan FAQ

You want to be prepared when applying for a loan in Philly. Here’s more information about what you’ll need to know.

What Type of Credit Score Do I Need To Get a Business Loan

At Clarify Capital, we recommend a minimum credit score of 550 to get approved for loans. Lenders use your credit score to assess your creditworthiness. So, a higher score can get you more favorable rates and terms. However, there are loans for business owners with poor credit, so talk to a Clarify adviser and explore your financing options.

Is It Hard To Get a Loan to Start a Philadelphia Small Business?

No, it’s not difficult to get a business loan in Philadelphia. You have many options — you just need to find the best loan and lender that suits your needs.

How Much Income Do I Need To Get a Business Loan?

The income requirement varies for each loan and lender. For example, some traditional lenders require a minimum annual revenue of $250,000 for small business loans. With Clarify, you can qualify for business loans as long as you generate at least $10,000 per month in revenue.

Grow Your Philadelphia Business With Help From Clarify Capital

Get the funding you need to grow a profitable business in Philadelphia with Clarify Capital. The application process is quick and easy.

You can get approved for loans with flexible payment terms and no collateral requirements. Apply today and receive funding in one to two business days!

Ready To Grow Your Business?

Get approved today and have money in your account within as little as 24 hours. No obligation -- prequalify without affecting your credit!