The Best Small Business Loans In California

Business loans in California are exactly what you're looking for to kickstart growth or fund the next big innovation. With a range of options, there's a loan type to fit every need. This guide dives into the nuances of each loan, helping you navigate the lending landscape with confidence. From selecting the right Golden State lender to understanding loan requirements and beyond, we've got you covered.

Top 8 California Small Business Loans

Camino Financial

Camino Financial is an online lender and CDFI based in Los Angeles, California, that provides accessible funding solutions to small businesses. Our priority is to help entrepreneurs get the capital they need to grow and achieve their goals.

We created our loans with business owners like you in mind.

Accessing our financial products is easy because we have easy-to-meet requirements and a 100% online application process.

• Loan Amounts: $10,000 to $50,000
• Loan Terms: 24 months
• Interest Rates: 32% to 45%
• Minimum Credit Score: 670

Apply For A Business Loan!

California Small Business Loan Guarantee Program (IBank)

IBank, or California Infrastructure and Economic Development Bank, offers the California Small Business Loan Guarantee Program (SBLGP), which guarantees up to 80% of loans. This program pairs with various financial development corporations to ease the process of acquiring a California business loan.

• Loan Amounts: Up to $1 million
• Loan Terms: up to 10 years
• Interest Rates: typically market-based
• Min Credit Score: 660

Accion Opportunity Fund

Accion Opportunity Fund is a nonprofit organization that aims to create economic opportunity by connecting small business owners to affordable capital and the business support they need.

• Loan Amounts: $5,000 to $150,000
• Loan Terms: 12 to 60 months
• Interest Rates: 5.99% to 12.99%
• Min Credit Score: 575

Working Solutions

Working Solutions, is a nonprofit lender that provides loans, business consulting, and other resources to small businesses in Northern California.

• Loan Amounts: $5,000 to $50,000
• Loan Terms: 3 to 5 years
• Interest Rates: 5% to 12%
• Min Credit Score: No set minimum

Los Angeles Federal Credit Union (LAFCU)

Tailored to small businesses based in Los Angeles, LAFCU is a not-for-profit financial institution that offers a variety of banking products and services to its members.

• Loan Amounts: $10,000 to $250,000
• Loan Terms: 3 to 7 years
• Interest Rates: based on your credit score and the amount of the loan
• Min Credit Score: 680

Jewish Free Loan Association (JFLA)

Offering interest-free small business loans in California, JFLA is a nonprofit organization that serves both budding and established entrepreneurs, helping to minimize debt while scaling operations.

• Loan Amounts: up to $36,000
• Loan Terms: 3 to 5 years
• Interest Rates: 0% (borrowers only need to repay the principal amount of the loan)
• Min Credit Score: 650

Fresno First Bank

Focused on community and local growth, Fresno First Bank offers a range of small business loans in California to support varying business goals. Here are the details on their SBA loans:

• Loan Amounts: up to $350,000
• Loan Terms: up to 7 years
• Interest Rates: competitive
• Min Credit Score: 650

California Capital Access Program For Small Business (CalCAP SB)

This loan loss reserve program encourages financial institutions to make loans to small businesses that may have difficulty obtaining financing. CalCAP provides up to 100% coverage to participating lenders on losses due to certain loan defaults.

• Maximum loan amount: $5 million, but only $2.5 million can be enrolled in the program
• Min Credit Score: 660

Most Common Qualifications And Requirements

Securing a small business loan isn't a matter of luck but of meeting specific qualifications and requirements. So, what exactly do lenders typically look for?

• Credit score. While many institutions offer financing for bad credit, having a good credit score can open up more loan options with better terms.
• Business plan. The document must demonstrate your ability to repay the loan, your planned business growth, and how the loan will help your business prosper.
• Collateral. This could be business assets, personal property, or other forms of guarantee to secure the loan.
• Time in business. Many lenders require that a company has been in operation for a certain amount of time, usually at least one or two years, to demonstrate stability and potential for success.
• Personal guarantee. This is a legal commitment where the individual agrees to repay the business loan if the business defaults.
• Financial statements. Gather important documents like balance sheets, income statements, cash flow statements, and tax returns.
• Annual revenue. This gives the lender an idea of the business's financial health and potential profitability. The specific amount required can vary significantly among different lenders and loan products.

How To Apply For A Small Business Loan

1. Define your business needs. Understand why you need the loan and how much you need.
2. Research loan options. Analyze several loan programs and financial institutions. Make sure you meet their requirements and that they can offer you the amount you need.
3. Complete loan application. Fill out the loan application with accurate and up-to-date information. Some lenders allow online applications.
4. Submit documentation. Lenders will ask you for more information and documentation to ensure you're a fit with their products.
5. Await approval. The lender will review your application, which can take anywhere from a few days to a few weeks.
6. Close the loan. If approved, you'll review the loan terms and conditions and sign the loan agreement.

Apply For A Business Loan!

Beware Of Loan Scammers Operating In California

While many legitimate programs provide small business loans, unfortunately, scams do exist. They often prey on unsuspecting small business owners looking for financial aid. Scammers may promise guaranteed approval or unusually low-interest rates. These are usually red flags.

No legitimate institution can guarantee loan approval without due diligence.

Similarly, you should treat any offer of interest rates dramatically below the market average with skepticism. Moreover, watch out for unsolicited offers and requests for upfront payment. Legitimate California small business lenders will not require an upfront fee before processing your loan.

#CaminoTip Don't confuse an upfront payment or fee with a down payment. Equipment loans, for example, do require a down payment.

By being cautious and vigilant, you can safely navigate the process of securing a California small business loan. Remember, legitimate lenders have transparent processes and do not make unrealistic promises.

Different Types Of Loans You Can Find In California

California offers a wide range of loan options for small businesses. Each one fits different business needs. So, let's break down these various types of loans.

Term Loan

Term loans are California's most common and popular type of small business loan. You borrow a certain amount of money and agree to pay it back over a set time with interest. These are perfect for big one-time costs, like growing your business or buying expensive equipment. Apply For A Business Loan!

SBA Loans

The Small Business Administration backs SBA loans. They offer low-interest rates and a longer time to pay back, making them very helpful for small businesses. They have different products, like:

• SBA 7(a)
• SBA express loans
• SBA 504

Line of Credit

Instead of getting a big chunk of money, a line of credit lets you borrow up to a certain limit. You only pay interest on the money you borrow. This is good for businesses that have changing needs for cash or surprise expenses.

Equipment Financing

Equipment financing can help you buy or lease the equipment your business needs. The equipment itself serves as a guarantee for the loan, making it easier to get.

Account Receivable Financing

Account receivable financing, or invoice financing, allows businesses to borrow money based on the amounts customers owe them. This type of financing can help businesses:

• Improve their cash flow
• Pay employees and suppliers
• Reinvest in operations and growth

It is especially useful for businesses with strong sales but customers who pay slowly.

Merchant Cash Advance

A merchant cash advance allows businesses to borrow a lump sum in return for a percentage of future credit card sales. This type of loan can be suitable for businesses with substantial card sales, such as restaurants or retail stores. That said, they can be pretty expensive.

Ways You Can Invest A Commercial Loan

If you apply for a loan, you must be clear about how you will invest the funds. Here are some of the ways California small businesses invest their money:

• Buying new equipment and machinery
• Paying your employees' payroll
• Financing business expenses
• Hiring staff
• Buying inventory
• Investing in marketing
• Strengthening the business's working capital
• Opening a new location or store
• Business expansion

California Small Business Grants

In addition to loans, grants represent another financial resource that California business owners can tap into. Unlike loans, grants don't have to be repaid, making them a valuable asset for startups and growing businesses. State and local governments, nonprofit organizations, and even some corporations offer grants. While securing one can be competitive, the potential benefits are often worth the effort. Let's explore a few California grants:

• Social Entrepreneurs for Economic Development Grants
• Mountain Small Business Grant
• California Paid Family Leave Program Grant
• EmployABILITY Business Grant
• California Paid Family Leave Small Business Grant
• The Kern County Small Business Micro-Grant
• The California Dream Fund Grant

Statistics About Businesses In California

California is the 5th largest economy in the world. The state achieves its impressive economic performance, in part, by the 4.1 million registered small businesses that employ 7.2 million people. Although these figures are pretty revealing of the importance of small businesses, the truth is that they don't often get the financial help they need. According to the Open the Books report about the SBA, between 2014 and 2018, the agency granted $24.1 billion to 43,061 California businesses. Compared to the 4.1 million businesses, only 1.05% of all businesses in California received capital from the SBA. This report also reveals that many loans went to luxury-brand or relatively prosperous businesses. This means that small businesses, like mom-and-pop shops, do not get the help they desperately need. Furthermore, there is a race bias. In 2016, the SBA granted $5.1 billion in loans in California.

Latinos were only able to access 13% of those resources, and African Americans only accessed 2% of the capital.

Camino Financial Loans Are Right At Your Fingertips

Growing your business or surviving tough times are reason enough to consider a loan as an alternative to raising capital. Camino Financial makes it easier, and we offer many more benefits than other alternatives. We understand how difficult it can be to access capital with traditional banks. That's why we have made our small business loans accessible. If you need external financing to strengthen your company or dream of an expansion, you should consider applying with us.

• We will never ask for collateral
• The online application process is easy, secure, and bilingual

Our loans have excellent terms and amazing benefits.

This is your opportunity to grow your business and reach your dreams.

Apply For A Business Loan!