Small Business Loans in Philadelphia
Looking to start or grow your business in the City of Brotherly Love? Entrepreneurs searching for small business loans in Philadelphia, Pennsylvania, have a surplus of options. Banks, credit unions, community development financial institutions and alternative lenders are available at every turn, from Passyunk Avenue to Roosevelt Boulevard. In this guide, we’ll look at funders, cover the loans they offer and explore the state of Philadelphia small businesses.
The Small Business Landscape in Philadelphia
From breweries to hair salons, restaurants to clothing boutiques, Philadelphia’s business scene isn’t lacking in variety. Not surprisingly, Philly scored a spot on Forbes’ recent ranking of top 10 rising cities for start-ups.
The rise in new entrepreneurs will inevitably lead many to seek business loans for their Pennsylvania company. With the right capital solutions, Philadelphia small business owners can fuel innovation and expansion.
Number of Businesses in Pennsylvania
According to the U.S. Small Business Administration (SBA), Pennsylvania is home to 1 million small businesses. These small businesses contribute significantly to the workforce, employing 2.5 million workers, nearly half of private-sector workers.
Top Small Business Industries in the State of Pennsylvania
The top-employing small business sectors in ranking order include:
- Health care and social assistance
- Food and accommodation services
- Retail trade
- Other services (not including public administration)
- Technical, scientific and professional services
- Wholesale trade
- Administrative, support and waste management
- Transportation and warehousing
Top Small Business Lenders in Philadelphia
If you’re looking for a small business loan in Philadelphia, your mind might go to Citizens Bank. After all, the city’s beloved baseball stadium dons the name of this leading regional bank. They’re not the only game in town, though.
Here’s a list of 5 top area lenders, all of which are part of the Philadelphia Business Lending Network, which collaborates with Philadelphia’s Department of Commerce to increase opportunities for small business financing.
Discover Your Best Business Loan Options
1. BB & T
This financial institution made Forbes’ 2019 list of top banks. BB & T offers funding you can use to supplement your cash flow, manage everyday operations, pay for start-up costs, buy inventory and more. Financing options include:
- Agribusiness loans
- Commercial loans for real estate
- Equipment financing
- Export financing
- Health care practice financing
- Revolving lines of credit
- SBA loans
- Secured and unsecured small business loans (fixed and variable interest rates available)
- Term loans
The bank also offers three business credit cards, two of which have no annual fee and a 0% introductory annual percentage rate (APR).
2. Community First Fund
With a 5-star Facebook ranking, this community development financial institution (CDFI) seems to be a local favorite among borrowers seeking small business loans in Philadelphia. Community First Fund’s focus is on providing business loans for minorities, women, nonprofits and community development, particularly in low-income neighborhoods. They’re especially interested in funding projects that create jobs and bring needed goods to underserved areas in the city of Philadelphia. Business loans at this Pennsylvania agency include:
- Commercial real estate loans
- Community development loans
- SBA 7(a) loans
- SBA Express loans
- SBA Community Express loans
- SBA Patriot Express loans
Microenterprise business loans are also available for new and existing businesses that need less than $50,000. Funds can be used for working capital, supplies and equipment, renovations and expansion.
3. Entrepreneur Works
This lender’s mission is to grow Philadelphia small businesses to improve socially and economically depressed communities. The maximum loan amount for most business loans is $50,000, with repayment terms up to 6 years in most cases. It’s important to note that small business loan requests for start-ups are limited to $15,000.
Small business funding at this Philadelphia organization includes these options:
- Equipment purchase and machinery loans
- Small business loans
- Vendor loans (up to $1,000, with repayment terms of 6-9 months)
- Women entrepreneur loans
Borrowers may request a 6-month interest-only repayment period at the start of the loan term. Additionally, interest rates are fixed for the life of the loan and are based on the current interest rate schedule and collateral type. The organization’s last posted interest rates range from 8%-12%.
Zero-percent interest, enough said. That’s why Kiva makes our top business loans in Philadelphia list. Through this online crowdfunding platform, small business owners can get access to first-time loans of up to $10,000, with loan terms up to 36 months. Funds are distributed via PayPal and can be used for any business purpose. To apply, borrowers must not be currently in foreclosure or bankruptcy.
5. Philadelphia Industrial Development Corporation (PIDC)
This community lender has partnered with Goldman Sachs’ 10,000 Small Businesses initiative to help entrepreneurs fuel the workforce and economy.
Small business loans at this Philadelphia organization include:
- Capital project loans (10% equity contribution required) – loan amounts range from $50,000-$750,000; maximum repayment terms are 5, 7, or 15 years depending on the use of funds; the interest rate is half of the Prime Rate but cannot go lower than 2.75%
- Contract lines of credit – loans are for businesses that have won public or institutional contracts; loan amounts start at $50,000 and interest rates range from 2.75%-5% depending on the amount borrowed
- Equipment and working capital loans – loan amounts range from $50,000-$750,000 with flexible repayment terms and interest rate of approximately 6.25%
To be eligible for working capital and equipment loans, Philadelphia borrowers must have at least 4 employees, have revenues of at least $150,000 and have been in operation for at least 2 years. Additional fees include application, origination (1.5% of the loan amount) and closing or legal fees.
Several small business loan rates in Pennsylvania are based on the Prime Rate. The Prime Rate is 4.75%, as of January 14, 2020.
Alternative Business Loans in Pennsylvania
The traditional funding process with banks can take time and require borrowers to meet challenging qualification requirements, such as minimum credit scores needed to qualify for a business loan. This leads many borrowers to turn to alternative lenders and alternative business loans.
Many alternative lenders are known to offer fast small business loans as well as financing to borrowers with bad credit. To take on these often riskier loans, alternative lenders usually have shorter repayment terms than other lenders, sometimes as short as 3 months. They also typically charge higher interest rates than conventional lenders.
Applying for Alternative Financing Through Fast Capital 360
Looking for fast financing to fund your Philadelphia small business? Apply with Fast Capital 360. We make the process simple and quick. Take advantage of these features:
Our application process couldn’t be easier. Apply in minutes and find out how much you qualify for in as fast as a day.
Multiple Loan Offers
Applying with Fast Capital 360, you get access to lenders throughout the country. That means we can bring you several loan offers so you can determine which one best fits your needs.
Once you apply, you’ll have a dedicated Business Advisor who will guide you through the funding process. Your Advisor will explain the details of your offer, so you’re clear on the terms of the financing you’re receiving.
Get Your Business Loan Options In Minutes
Small Business Resources in Philadelphia
Now that you’ve learned about several small business loans in Philadelphia, see what other resources are out there to help your company succeed, regardless of the type of business you’re in. Benefit from the following local programs.
Goldman Sachs 10,000 Small Businesses
Not only does Goldman Sachs partner with lenders but also educational institutions. Their goal is to provide entrepreneurs with better access to education and business support services. 10,000 Small Businesses partners with the Community College of Philadelphia to offer free education on such topics as negotiation, marketing and management. Participants also receive professional support and develop a business growth plan for their company.
Program applicants typically meet the following criteria:
- Small business owner or co-owner with at least 3 other employees
- Business in operation for at least 2 years
- Annual revenue of $150,000+
Programs run for 11 sessions and include assignments and out-of-class activities. Program orientations are available for small business owners who are interested, and applications are accepted throughout the year.
Temple University Small Business Development Center
Head to Temple University’s Small Business Development Center, headquartered in the Fox School of Business. Here you can meet with business consultants at no charge. You can also register for free or low-cost workshops or sign up for a business course. Workshop topics vary, with examples including:
- Business planning
- Business management
- Legal issues
- Social media for business
- Tax credit information and planning
Partly funded through a cooperative agreement with the SBA, this nationwide nonprofit organization has been helping small business owners for more than 50 years. Some of the highlights of Greater Philadelphia’s SCORE chapter include:
- Business mentors
- Educational workshops
- Webinars and online courses
Also, visit the SCORE website for helpful business articles and links to resources, such as legal clinics and business development centers.