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Small Business Loans in Pennsylvania (2021 Update)
You’ll find almost one million small businesses throughout the state of Pennsylvania. The majority of entrepreneurial companies can be found in the Philadelphia area. Pennsylvania is one of the top states in the nation for small businesses to thrive and grow to their full potential. In order to make things work, most owners require a lump sum of cash that can be obtained through a small business loan.
When to Take Out a Loan
Taking out a loan isn’t always necessary to have a successful business. If you’ve created a company and are bringing in enough revenue to make ends meet and put back into the business, you probably won’t benefit much from a loan. However, if you need a large amount of money that can be put towards expenditures, expansion and marketing, a business loan is an advantageous option. For those trying to bail out their failing business with a loan, they need to be careful where the money is spent. If your company should still fail after taking out a loan, you’ll be responsible for repayment regardless.
How to Apply for a Loan
To begin the loan process, you’ll need to find a reputable Pennsylvania bank that offers small business loans. Look for a rate that is affordable and won’t be exorbitant for your company’s budget. Rates vary from 5.5 to 8.5 percent, with some banks offering variable rates that change according to the market.
The bank will require information regarding your company’s worth, merit, assets and prospects. High-risk and niche companies may find it difficult to obtain a good-quality bank loan that doesn’t have a ridiculously high interest rate attached. Others may notice that lenders won’t give out loans to businesses that are recently established, as these companies are a liability to the lender. If one lender denies your loan, you can try others until someone approves your case. Banks have different stipulations for what they look for in a small business applicant.
Having Clear Goals for Your Business
It’s relatively easy to apply for a business loan and receive money, but it’s important that you know where most, if not all, of that money is going to be spent. If you’re taking out a loan to expand on your company, don’t use that money to fix appliances or pay staff. If you need a loan to save your business, don’t use the money you receive for frivolous non-essential expenditures. Having a solid plan in place for where that money will go is crucial for success.
Repayment of the loan is made monthly in small, affordable amounts. If you fail to pay the loan on time each month, you’ll acquire additional late fees and collections notices. All of these delinquencies will go against your business’s credit.
Banks in Pennsylvania That Offer Small Business Loans
Below are the top banks to get small business loans in Pennsylvania:
Valley Green Bank
Founded in 2005 in Philadelphia, Pennsylvania, Valley Green bank prides itself for its exhaustive personal banking options. However, while its focus is not commercial banking, it managed to allocate financial aid to small businesses through loans amounting to $108 million in just a year.
Elderton State Bank
Elderton State Bank was founded in 1919 in Elderton, Pennsylvania. Mr. Allen W. Lockard is currently serving as its President, at the forefront of delivering banking services to Pennsylvania counties.
Established in 1907, Luzerne Bank provides personal and commercial banking products and services to many locations across the state – Swoyersville, Wilkes Barre, Wyoming, Plains, Dallas, Hunlock Creek, and Hazleton.
Mercer County State Bank
Mercer County State Bank first opened in Sandy Lake, Pennsylvania in 1911 and continues to serve the whole of Mercer County and nearby communities.
The Honesdale National Bank
One of the oldest banks in the state, The Honesdale National Bank was founded in 1836 in Honesdale, Pennsylvania. Aside from the northeastern part of the state, it also has branches at the southern counties of New York.
The Neffs National Bank
The Neffs National Bank was established in Neffs, Pennsylvania in 1923 and continues to provide community banking services to the state.
Top Cities in Pennsylvania and Their Lenders
Pennsylvania is one of the nation’s most historic states. As a major Northeastern state, Pennsylvania was one of the original colonies that founded the nation. For this reason, there are plenty of interesting tourist attractions and landmarks throughout the region. Pennsylvania is also well-known for its sports teams and famous cuisine – it’s an awesome spot to start a new business if you’re in the right type of industry. It’s important to choose the right city to start your new business in — you don’t want to be stuck in the wrong spot.
In this section, we’ll take a quick look at the top cities in Pennsylvania to give you a better idea of where to start your business. We’ll also take a look at their best lenders.
Philadelphia is by far the most famous city in the state of Pennsylvania. It plays home to some of the nation’s most prized historic artifacts – including the Liberty Bell. The city is well-known for its passionate sports fans and proud locals. The area experienced some of the most notable moments of the Revolutionary War. If you’re looking to start a business in a city with a large economy, Philadelphia is definitely one of your best options in the region. Below are our favorite lenders in the city:
Freedom Credit Union
Freedom Credit Union is our top pick for Philadelphia. If you become a member of their union, you’ll have access to some of the cheapest financing in the state. They offer affordable rates for their small business loans. Best of all, they also have tons of great local experience if you’re looking for a lender who understands Philadelphia.
FINANTA is a non-profit lender in Philadelphia that can help small business owners obtain small loans. They don’t offer large funding, so you’ll want to make sure that you don’t need a lot of money anytime soon. They’re great for business owners who may be scared they won’t qualify through a traditional business lender.
Pittsburgh grew famous for being the steel capital of the United States. But as the steel industry began to move overseas, Pittsburgh experienced serious economic troubles. The entire city suffered from the collapse of the regional steel trade. But now, decades later, Pittsburgh has grown into a powerful economic force. It has a diverse economy with a range of different industries present. Below are the best small business lenders in the city:
SSB Bank is our top choice for the Pittsburgh area. This bank has built a substantial reputation in the area that has helped it grow into the city’s favorite business bank. They specialize in all types of business loans, but they’re especially well-known for helping their clients get the equipment financing they need to take things to the next level.
Standard Bank is a local bank in Pittsburgh that knows how the city works. Their commercial loan specialists are available on hand to help you get the funding you need. Head into one of their area locations to speak with someone about your business lending situation. They can help you develop a funding strategy to expand or start your business. They have a reputation for providing loans quickly.
Allentown is another former manufacturing town that has managed to turn its economy around in recent years. It is now much more focused on the services industries. Retail also plays a major role in the city. Below is our favorite small business lender in the city:
There aren’t many business loan lenders in Allentown, so it’s fortunate that Citizens Bank is an option in the city. They have a great reputation in the area that has allowed them to become one of the biggest business lenders in the region. They can also provide you with business banking services if you need them.
Erie also suffered when the local industries declined as globalism took off. The city is now home to many insurance companies and services based businesses. Tourism is also an industry that is present in the region. Below is our favorite lender in Erie:
Erie Federal Credit Union
Erie Federal Credit Union is a great choice for those who want affordable business lending – they have some of the best commercial loan rates on the market. If you’re looking to get the money you need for your business at an affordable price, Erie Federal Credit Union is a good choice. You’ll need to be a member to access their capital.
Reading is one of the poorest cities in the country, which makes it a good spot for someone looking to grow a small business. The area is extremely affordable and in need of investment. You’ll need to be the right type of business owner to make it work. Below is our top lender in the city:
Although mentioned previously in this article, Citizens Bank is a large, regional lender that has a presence in Reading. They have a local branch that can be used to contact one of their commercial lending specialists. If you want to work with a lender that understands Reading, Citizens Bank is a top choice. They have a great reputation with local business owners.
Remember, some of these companies or banks are very specialized and may only handle SBA loans or a business line of credit. For SBA loan terms and other information read our more in depth SBA article. Remember to ask about any special programs for minorities or women. Also ask for information about grants for women starting a business or for startups in general if that interest you. If you bad credit don’t worry as there still may be other alternative lenders willing to work with you.
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