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Small Business Loans in Arizona (2021 Update)
Arizona has an astounding 400,000 small businesses, with almost 300,000 of those working alone with no employees or staff. Thousands of people open up their own businesses in Arizona each year and hundreds of those individuals are seeking out business loans to make the transition into entrepreneurship easier. Small business loans can be provided by banks, private lenders and even government agencies supplied by grants.
Why You Might Need a Small Business Loan
If you're planning on opening a small business anywhere in Arizona, you might need the help of a business loan. Applying for a loan will provide you with the money you need to make ends meet or have the funds needed for heavy expansion. Keep in mind that most lenders will not approve loans for brand new businesses that are less than a year old. Eight in every ten businesses will fail within their first year, and lenders see this is a risk factor they need to avoid. Don't be surprised if you cannot obtain a bank loan for your company until it is one or two years old.
How to Take Out a Loan
Taking out a business loan is different from personal borrowed money because you'll need to provide proof of capital in accordance with your company. Banks and lenders want to know that your business is successful and is bringing in routine revenue. If they see your company as high-risk, you might not receive the loan you need to keep the business afloat. High-risk assessments are made according to the number of sales, clients and contracts you've obtained within the past year of business. Companies that do not have a successful growth rate will be denied a loan. Likewise, owners who have poor credit scores can be denied business loans.
The process of taking out a business loan requires quite a bit of paperwork. You'll need proof of sales, receipts and expenditure bills that correlate to your company. The bank will run a thorough credit report on both you and your business, which means that if any collections have been put against your company, the lender will see these items and incorporate them into your application. Not everyone gets approved for business loans, as only one in every three people can obtain the money they need for their Arizona company.
Repayment of the Loan
Repaying the loan is totally dependent upon the term agreement and interest rate you've consented to pay. Interest rates for business loans can range from a mere 4 percent to an astounding 20 percent. Most small business loans are approved for five to ten years, with loan extension available for those struggling to make payments.
Lenders in Arizona
Below are the most trusted banks in the state of Arizona that lend out small business loans to entrepreneurs.
Located in Yuma, the Foothills Bank has lent money to over 90,000 small business owners over the past several years. They have a customer satisfaction rating of 87.5 percent.
Commerce Bank of Arizona
This lending firm is located in the heart of Tucson and is one of the most popular lenders for entrepreneurs state-wide. They've approved over 70,000 loans and have a satisfaction rating of 82.5 percent.
Sunrise Bank of Arizona
In northern Phoenix, you'll find the Sunrise Bank of Arizona. To date, they've lent out over 70,000 loans and work closely with small business owners throughout the state. Their customer approval rating is 80 percent.
Top Arizona Cities and Their Lenders
Most Americans think of Arizona as the scenic home of the Grand Canyon. And while tourism to the region thrives because of the natural landscapes, Arizona also plays home to millions of full-time residents. If you do decide to open a business in the region, you’ll be pleased to know you have a range of great options at your fingertips. Below we will explore the top cities for small business owners in the state of Arizona – we’ll also explore the top lenders in each of those cities!
Phoenix is the capital and largest city in the state of Arizona. The area provides access to some of the most scenic parts of the state. The city also plays home to the state’s professional sports teams and services industries. If you’re going to start a business in the area, consider the lenders below:
Mountain America Credit Union
Mountain America Credit Union is actually based in Utah, but they also have a presence in Phoenix. We recommend this lender because of their outstanding reputation with their client base. They provide unsecured loans, secured loans, equipment loans, and a range of other business lending services.
Sprout Financial is another top lender that partners with businesses in the Phoenix, Arizona region. This lender is well known for providing large unsecured lines of credit for business owners.
Tucson is the second largest city in the state of Arizona, it’s also home to the University of Arizona. The city’s economy is largely driven by the college campus in the area. If you’re planning on starting a business in Tucson, consider the following lenders:
Vantage West Credit Union
Vantage West Credit Union is a large credit union that has been helping business owners in the Tucson region for decades – they’re a great choice for someone who wants the strength of a large lender behind their business.
Alliance Bank of Arizona
Alliance Bank of Arizona is another large lender that also works with businesses in Tucson – they’re a great choice for someone who wants a large partner with considerable experience throughout the state.
Mesa is often considered an extension of the city of Phoenix, but those who live there know how different it is to the capital city. Mesa plays home to most of the city’s museums, you’ll find the area has an extremely unique economy. Below are Mesa’s top business lenders:
Gateway Bank of Mesa
Gateway Bank of Mesa is a local Mesa bank that helps businesses obtain financing for various costs. They’re especially experienced in real estate financing.
Balboa Capital can help you obtain financing quickly. They’re well-known for having quick application processes.
Again, Chandler is another city that is often considered an extension of Phoenix. Many of the area’s residents work inside the central business district of Phoenix – it’s a great place to start a business. Below are the top lenders in the area:
Unsecured Finances is a unique lending company that connects investors with borrowers. While their interest rates are higher, their requirements are lower. They work with local Chandler companies to obtain the right funding solutions for their operations.
Glendale is located around 10 miles to the northwest of Phoenix. It’s one of the most recognizable cities near Phoenix – it plays home to the Arizona Cardinal’s stadium. Below are the top lenders in the area:
Arizona Central Credit Union
The Arizona Central Credit Union is our top pick for the Glendale, Arizona region. This lender does a great job of providing local small business owners the financing they need to get off the ground. They also have banking services which can make it much easier for you to keep all your finances in one location.
Scottsdale is considered the luxury extension of Phoenix – if you’re looking to start a hospitality business, have a look at your lending options below:
Arizona Central Credit Union
Like Glendale, the Arizona Central Credit Union is our top pick for Scottsdale. As the cities are very close, the credit union caters to clients in both areas. As mentioned previously, if you’re looking for a one-stop-shop, this may be your best option in the region.
Tempe is the arts and cultural center of Arizona. It plays home to a variety of concert and performance venues. It’s a great place to start a business if you’re looking at certain niche industries. Below is the lender we suggest working with in Tempe:
Arizona Business Bank
Arizona Business Bank is a partner of CoBiz Financial. The company has an office in Tempe, Arizona that helps provide funding solutions for business owners in the area. They’re a great local partner to have!
Remember, some of these companies or banks are very specialized and may only handle SBA loans or a business line of credit. Ask them about any special programs for minorities or women. Also ask for information about business grants for startups if that interest you. If you bad credit don't worry as there still may be other alternative lenders willing to work with you.