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Small Business Loans California

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The Golden State of California’s economy is massive, with a gross state product of 3 trillion, which is larger than most countries globally. California is ranked as the fifth-largest economy in the world and is the home to 3 of the world’s ten largest companies by marketization. With such sizable economic development, California small businesses can capitalize on such a large market and workforce. California usually accounts for three-quarters of all U.S. job creation with access to many different types of workers.

With all that California small businesses have going for them in the state, small businesses still have the same challenges and limited resources to acquire a small business loan from a bank. Getting California business loans from traditional banks like Wells Fargo, Bank of America, or Chase Bank will be challenging due to their strict small business loan requirements. AdvancePoint Capital can provide loans through the resources of a complete marketplace of small business loan options and alternative funding options for small businesses.

How Do I Get a Small Business Loan in California?

AdvancePoint Capital has the resources, experience, and access to a large small business finance center marketplace with various loan programs to help borrowers. We guide, provide, and serve the needs of every borrower, no matter what the industry, community, language (including Spanish), revenue, or income qualifications.

AdvancePoint Capital helps small businesses thrive and make smart funding decisions using our simple application process. We view the customer relationship as a partnership. Experience our easy business loan process! We have the resources to help small businesses compare, shop, and save various small business loan options to get the right result and make the right loan program decision.

The 8 Best Business Financing Options and Resources for California Small Businesses

1. Long-Term Business Loan

Long-term small business loans have a duration of greater than two years and charge principal and interest. The loan does not function like a Business line where you can draw funds as you go. A long-term business loan is predominantly for expansion, debt refinancing, and growth or to finance substantial long-term business projects.

Product Overview & Eligibility Requirements

Rates: Interest rates starting at 6.50% or treasury index plus 1% to 2.5%
Terms: 2 to 10 years
Fees: 0% to 3% origination fees
Payments: Monthly or bi-weekly payments
Credit Standards: Lender will consider all types, but good to excellent is preferred.

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2. Business Line of Credit

A Business line of credit is an open form of financing that is revolving. It is a flexible financing product that allows small business owners to draw funds on-demand or make purchases. Business lines charge a principal and interest rate but have a limit that cannot be exceeded without permission and approval of the lender. Renewal is required either semi-annually or annually to be extended. This product typically has a personal loan guarantee.

Product Overview & Eligibility Requirements

Rates: Interest rates starting at 6.50% or treasury index plus 1% to 2.5%
Terms: Open revolving line
Fees: 0% to 3% origination fees
Payments: Monthly, bi-weekly or weekly payments
Credit Standards: The lender will consider all types. Good to excellent preferred.

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3. Short-Term Business Loan for a California Small Business

A Short-term business loan is typically repaid with 6 to 18 months. Small businesses choose this when traditional business loan financing is not an option due to qualifications. With these types of loans, a lump sum of money is provided upfront with a fixed payback amount calculated using a “factor rate” over a short period of time. Short-term loans are popular with small business owners because of the reduced documentation requirements and laxer tolerances than traditional small business loan financing.

Product Overview & Eligibility Requirements

Rates: Factors based on the loan amount range from 1.09% up to 1.45%
Terms: 6 to 18 months in duration (typically 12 months or less)
Fees: Business funder may charge 0% to 5% origination fees
Payments: Weekly, bi-weekly, and in some cases, daily
Credit Standards: All types considered

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4. Small Business Cash Advance for a California Small Business

Business cash advances (BCA) are also known as a purchase of future sales agreements. The owner is advanced money from future sales and is responsible for paying back a fixed amount greater than the advanced amount. This difference between the advance amount and the payback amount is called the “factor rate or cost.” The advance is repaid by taking a fixed percentage (specified percentage) of future overall sales deposits. The payments are collected by an ACH fixed daily or weekly from the bank account based on the specified percentage of future sales. 

At the end of every month, reconciliation can occur if the fixed payments taken are more than the set future percentage of sales. The small business owner can request a refund for overpayment so that the set specified percentage of sales matches the sales volumes. Repayment continues until the payback amount is paid back in full. There is no term limit for business cash advances because of fluctuating future sales. A business cash advance is not considered a business loan but an advance on future sales. Business owners are not required to provide a personal loan guarantee for a business cash advance.

Product Overview & Eligibility Requirements

Rate: 1.09% up to 1.45% factors
Terms: No term limits. Collection time frame is dependent on future sales
Fees: Origination fees range from 0% to 5%
Payments: Weekly or daily
Credit Standards: All types considered

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5. Merchant Cash Advance for a California Small Business

Merchant cash advances (MCAs) are also a type of purchase of future sales agreements. They are very similar to business cash advances, but the most significant difference is the repayment process connected to future card sales instead of overall sales. MCAs take a set percentage of future card sales at the time of batch until the advance is paid back in full. Businesses appreciate MCA because they have fluctuating sales and don’t want to be locked into a fixed payment that could negatively impact capital or profit margins if sales decline. Merchant cash advances are not considered a loan but an advance of future sales. There is no personal loan guarantee with a merchant cash advance as these products are not loans. Great for working capital needs.

Product Overview & Eligibility Requirements

Rates: Factors that range from 1.09% up to 1.45%
Terms: No term limits (payoff depends on future sales)
Fees: Origination fees that range from 0% to 3%
Payments: Fixed percentage of future card sales withdrawn at the time of batch
Credit Standards: Poor to excellent is accepted, all types considered, no minimum credit score.

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6. Equipment Financing for a California Small Business

Small business owners who rely on equipment to operate their business turn to equipment loans to purchase equipment that secures the equipment as collateral. The business owner must have a favorable lending history to acquire equipment loans, but little paperwork is necessary to get approved. This product can come in the form of loans or leases.

Product Overview & Eligibility Requirements

Rates: Interest from treasury index plus 2% interest rate or 1.09% up to 1.45% Factors
Terms: 2 to 7 years
Fees: Lender may charge origination fees ranging from 1% to 3%
Payments: Weekly or daily
Credit Standards: Fair to excellent accepted

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7. Invoice Financing for a California Small Business

Invoice financing offers the ability to get an advance on invoices that have been issued to clients but not collected. This solution provides cash quickly to small businesses that want to avoid the wait for outstanding invoices to be paid by the client. Invoice financing costs range from 1% to 2.5% fee off of the face value of the invoice advanced. This is not considered a loan but an advance of funds.

Product Overview & Eligibility Requirements

Rates: None
Terms: Advance
Fees: 1% to 3% fee based on the invoice. Monthly service fees depending on the volume of invoices factored

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8. Small Business Administration (SBA) Loans for a California Small Business

The Small Business Administration (SBA) provides a loan guarantee program and establishes guidelines as well as a business loan guarantee program to an approved SBA lender. The mission of the SBA is to foster small business economic development.

The Small Business Administration is not a lender. They provide guarantees to an approved business lender to recover a certain percentage of the business loan if it defaults with SBA rights reserved. The business loan guarantee program gives the approved lender the ability to take on the risk of business lending under SBA. Without the small business loan guarantee and the SBA rights reserved, the approved lender would not ordinarily lend independently. 

SBA programs are highly sought out by small business owners, but unfortunately, SBA loans have low application approvals due to the requirements, guidelines, and high standards. The Small Business Administration loan will require a personal loan guarantee.

The Small Business Administration (SBA) has come out with a new loan program for small businesses called the SBA Paycheck Protection Plan (PPP) loan to small businesses in response to COVID-19. Please contact AdvancePoint Capital for help and more details to see if your business is eligible.

Small Business Administration Product Overview

Rates: Interest rates starting around 6.00%, treasury index plus 1% to 2.5%
Terms: 3 to 25 years
Fees: Lender may charge origination fees ranging from 1% to 3%
Payments: Fixed monthly payments
Standards: Good to excellent preferred, all types considered.

Small Business Administration Programs

  • SBA Standard 7 (a) Loan Programs – SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to small businesses. Like the guaranty percentage and loan, the terms and conditions may vary by the type of loans to small businesses.
  • SBA Express Loans – SBA Express loans are a simple way to receive expedited, amortized government-guaranteed financing for your small business. With SBA Express loans, entrepreneurs can be granted up to $350,000 of capital in the form of either a term loan or business line. Once received, this capital may be used for various business purposes.

SBA Express Loans are very popular. The actual value of SBA Express loans is that they have remarkably fast turnaround times for approval, and the willingness of lenders to advance funds is higher. Due to a guarantee of 50% of the loan amount to third-party lenders by the Small Business Administration, this loan may be the best option for business owners who don’t meet the lending criteria of traditional financial institutions or lack experience/history.

  • SBA Loan Programs 504 – The SBA 504 Loan is a powerful economic development loan program that will provide small businesses another avenue for business funding while promoting business growth and job creation. The use of proceeds from SBA 504 Loans must be used for fixed assets such as construction, commercial real estate, land, and land improvements (and certain associated soft costs). Or it can also be used to refinance existing debt. Real estate is required as collateral for this program.
  • SBA Disaster Loan Program – This type of SBA loan provides assistance after natural disasters like tornadoes, wildfires, or floods. After former president Trump declared Covid-19 a nationwide emergency, small businesses could access this program for emergency financing as well.
  • SBA Paycheck Protection Program (PPP) – The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan. This SBA loan provides loans to small businesses affected by the COVID-19 crisis and needs financial help. Only SBA PPP loans have the potential to be forgiven.

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U.S. Small Business Administration

How to Grow Your Business in Los Angeles
View the Los Angeles Small Business Resource Guide for information and assistance in growing your Southern California business, exploring funding options, and contracting.

How to Grow Your Business in San Francisco

View the San Francisco Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, and contracting.

How to Grow Your Business in Sacramento

View the Sacramento Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, finding an SBA lender, and contracting.

How to Grow Your Business in San Diego

View the San Diego Small Business Resource Guide for information and assistance in growing your local business, exploring funding options, an SBA lender, and contracting.

The fast, convenient and straightforward way to get the money you need for your business – now!
Get Your Quote Today by filling out our simple form.

Why Do You Need a Small Business Loan?

The most common business needs that small businesses use loan proceeds include: 

• Working Capital
• Equipment
• Expansion
• Cash Flow Shortages
• Emergencies
• Advertising or Marketing
• Debt Refinancing
• Inventory
• Operations
• Employees 

Additional Resources, Business Advice, Business Needs, Latest News, Loans, Government Programs, Help and Information for California Small Business

IBank California Infrastructure and Economic Development Bank – IBank’s Small Business Finance Center features a loan guarantee program designed to assist small businesses that experience capital access barriers. The Small Business Finance Center Small Business Loan Guarantee Program encourages lenders to provide funds to small businesses to help them grow and prosper.

IBank’s Small Business Finance Center supports communities throughout California by providing loan guarantees, jump-start loans, disaster relief financing, and more. Small businesses provide jobs in every region of the state and are a vital contributor to the economy.

Originally known as the California Small Business Loan Guarantee Program (SBLGP), the SBFC received seed money in 1968 to reduce unemployment by supporting entrepreneurship and small businesses. The Small Business Finance Center promotes statewide economic development by increasing opportunities for entrepreneurs, the self-employed, microbusinesses, and small business owners to have better access to capital and other technical resources.

The Small Business Loan Guarantee program, managed by the Small Business Finance Center, helps California businesses create and retain jobs and encourages investment in low- to moderate-income communities. The Small Business Loan Guarantee program is available to small businesses throughout California and serves hundreds of small businesses each year to help those California small businesses thrive.

Through the California Small Business Loan Guarantee Program, the Small Business Finance Center (SBFC) partners with different financial development corporations to give capital to small businesses for a variety of needs. Any California-based business with one to 750 employees is eligible to apply. Loan amounts can go up to $20 million, and the SBFC guarantees 80% to 95% of the loan. For less established California businesses wondering how to get a small business loan. To apply for loans through the program, your primary business must be located in California, as well as at least 51% of your employees or income.

The Small Business Loan Guarantee program helps businesses create and retain jobs and encourages investment in low- to moderate-income communities. The Small Business Loan Guarantee program is available to small businesses throughout the state of California and serves hundreds of small businesses each year.

California Rebuilding Program: Disaster Relief – Loan Guarantee Program – The Small Business Loan Guarantee program helps small businesses create and retain jobs. The program is available to small businesses throughout the state of California. It was initially established in 1968 in an effort to reduce unemployment by supporting small businesses. The Finance Center promotes statewide economic development by increasing opportunities for entrepreneurs, the self-employed, microbusinesses, and small business owners to have better access to capital and other technical resources.

The SBLG program helps businesses create jobs and encourages investment in low- to moderate-income communities. $509.6 million overall capital was injected into the state’s small business community last fiscal year through loans guaranteed by IBank. There have been over 20,000 loans guaranteed by the SBFC Loan Guarantee program since the early 2000s.

Valley Economic Development Center Business Loan – VEDC (Valley Economic Development Center) business funding can come in three forms: standard business loans, microloans, and microenterprise loans. Small business owners in California looking for loans as small as $500,000 would do well to check out the affordable, transparent small business funding options that the state’s economic development center offers their state-of-the-art business loan options.

Opportunity Fund – Opportunity Fund is one of the largest nonprofit small business lenders in the country. Opportunity Fund provides loans for various business needs.

California Small Business Grants – Grants.ca.gov is managed and hosted by the California State Library. The Grant Information Act of 2018 (Stats. 2018, Ch. 318) required the State Library to build one website by July 1, 2020, “that provides a centralized location … to find state grant opportunities.”

Frequently Asked Questions

It is not difficult for California-based small businesses to obtain business financing for lenders. AdvancePoint Capital can assist you in finding funding.

Yes. There are many lenders and options available to business owners with poor lending histories.

Reduced documentation business funding is available and may work for you if you are trying to avoid providing a lot of documentation. Business financing products will be less favorable the less documentation you provide. 

Getting a start-up business loan can be complex and challenging. Other than SBA, your search will need to include looking at non-traditional lenders and other means to raise capital to start a business (for example, private sources or investors).

If you have an existing business, money down is not required, but start-up costs are involved for start-up financing. Start-up costs will vary depending on the loan program.

Merchant cash advance and short-term loans are the easiest to acquire with the most lenient guidelines.

Business lines, long-term loans, and SBA loans are the most affordable loans available from lenders.

Yes, many financing products are open to nonprofits for California-based businesses. 

Most financing products require the majority (over 50%) of owner participation and signature. 

Businesses will find applying for loans with AdvancePoint Capital is as simple as 1, 2, 3. Start with this website online form (don’t forget to provide your name and e-mail), then fill out the short application page, wait a few hours for your approval, and then get your money for your business.

AdvancePoint Capital

The fast, convenient, and straightforward way to get easy access to the business loan you need for your business – now!

Get your quote today by filling out our simple form.