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Small Business Loans Minnesota

Advancepoint Capital Supports Small Business Loans in the State of Minnesota


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For many business owners in the state of Minnesota, the ability to access capital and resources for their business is a necessity. To receive adequate funding, they need to keep their business objectives on track; companies need alternative loan solutions that they can trust. AdvancePoint Capital offers business loans and short-term cash flow options that keep operations afloat.

With all that Minnesota has going for it from an economic perspective, small business entrepreneurs still face many challenges getting a traditional loan from banks or credit unions. These entities often have stringent guidelines, requirements, mountains of paperwork, and limited loan offerings for Minnesota small businesses. It’s incredibly challenging to receive anything from a bank or conventional business lender. Luckily, AdvancePoint Capital’s knowledgable business finance specialists and outstanding customer service can meet Minnesota businesses’ needs and help your business acquire the necessary capital.

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Getting Approved for a Business Loan in Minnesota

AdvancePoint is an excellent resource with a business marketplace menu full of various alternative funding options for Minnesota small businesses. Experience our customer service and allow us to unleash all of the resources we have at our disposal, so you can access updates to the best products, rates, and terms to meet your business needs.

The 8 Best Business Loan Options for Minnesota Businesses

1. Long-Term Business Loans in Minnesota

Lenders define long term business loans as a loan with a payback duration greater than two years. Businesses are offered a fixed amount of capital upfront and charged principal & interest. Unlike a business line of credit, a business owner cannot draw money as they go with long term loans. Typically, these loans are an excellent resource for expansion and growth or help your business finance large projects.

Product Overview

Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5% 

Term: 2 to 10 years

Fees: Origination fees range from 0% to 3% (depends on risk and lender)

Loan Payments: Monthly or bi-weekly

Credit Requirements: Good to excellent credit score required

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Long-Term Business Loans

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2. Business Line of Credit

A business line of credit is an open revolving line. This type of funding allows businesses to draw funds when needed or make purchases on-demand—a business line charges a principal & interest rate. Business lines of credit do have a limit that cannot be exceeded without a lender’s approval and is not open-ended forever. Business lines of credit require renewal by lenders either semi-annually or annually to be extended. Entrepreneurs choose a line instead of a loan for the working capital, affordable rates, and flexible terms.

Product Overview

Interest Rates: Starting at 5.50% or treasury index plus 1% to 2.5% 

Term: Open revolving line

Fees: Origination fees ranging from 0% to 3% 

Payment: Monthly, bi-weekly, or weekly

Credit Requirements: Fair to excellent credit score required

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Business Line of Credit

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3. Short Term Small Business Loans

Short term business loans are defined as loans that are typically repaid within 6 to 18 months. These loans feature a lump sum offered upfront with a fixed payback amount calculated using a factor over a short term of time. Rates are not principal & interest but a “factor rate” that costs more than traditional loans.

Most businesses choose short term loans when they do not qualify for traditional loans. Short term loans charge more for costs and are shorter in the duration of repayment. Payments are more frequent to compensate for the higher risks business lenders take in offering this product.

These loans are a popular resource for small businesses because of the reduced documentation requirements and laxer tolerances than traditional loans. Working capital is the primary reason for acquiring funding resources for short term loans.

Product Overview

Rates: Factor rates range from 1.09% up to 1.45% or simple interest starts at 1% per month

Term: 6 to 18 months in duration (typically 12 months or less)

Fees: 0% to 5% origination fees

Payments: Weekly, bi-weekly, and in some cases daily Monday-Friday

Credit Requirements: All credit types considered from bad to excellent credit score

Loan Process: Application and bank statements

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Short Term Business Loans

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4. Business Cash Advance for Businesses in Minnesota

Business cash advances (BCAs) are also known as a purchase of future sales agreement, advancing future sales at a discount to Minnesota businesses. The business is responsible for paying back a fixed payback known as a specified amount, which is higher than the amount that was advanced to the company. This difference between the advance amount and the payback amount is called the “factor rate or cost,” which is a fixed cost. These are not principal & interest costs.

The advance is repaid by taking a fixed percentage of future overall deposits called the specified percentage. The payments are collected by an ACH fixed daily or weekly payment deducted from a business account based on the specified percentage of future sales. At the end of every month, reconciliation can occur. Suppose the fixed payments taken out of the bank account monthly are more than the set future percentage of monthly sales. In that case, the company can request a refund to the business for overpayment so that the set specified percentage of sales collected for the business matches the revenue volumes. Repayment continues until the payback amount is paid back in full.

There is no time limit with advances as the fixed payback percentage is everchanging due to fluctuating revenue. This product is popular with businesses that can not get a bank loan and is a fast way to get funds.

Product Overview

Rates: Ranges from 1.09% up to 1.45% 

Term: This is not a loan, so there are no time limits. Payments continue until paid in full based on specified percentage collection method and are dependent on future revenues

Fees: Origination fees that range 0% to 5% 

Payment: Weekly or daily Monday-Friday fixed ACH

Credit Requirements: All types of credit considered from bad to excellent

Application Requirements: Application and bank statements

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Business Cash Advance

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5. Merchant Cash Advance for Minnesota Small Businesses

A merchant cash advance (MCA) is also known as a purchase of future sales agreement that operates very similarly to BCAs. The most significant difference is the repayment process, which is connected to future credit card revenues 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 find this valuable when revenues fluctuate, and they don’t want to be locked into a fixed payment that could negatively impact cash flow or profit margins if revenues decline or change.

This product is another great resource for working capital to help your business. Remember: a merchant cash advance is not a loan, but an advance, by selling a portion of the business’s future sales at a discount to a funder in exchange for cash for the business owner now. This product is popular with companies that can not get a bank loan.

Product Overview

Rates:  Range from 1.09% up to 1.45% 

Term: No time limits

Fees: Origination fees range from 0% to 3%

Payment: Set fixed percentage of future card revenues

Credit Requirements: All types of credit considered from bad to excellent

Application Requirements: Application, bank statements, and merchant processing statements

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Merchant Cash Advance

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6. Equipment Loans and Financing for Small Businesses

Minnesota area businesses that require the use of equipment to operate their business often turn to equipment financing to purchase machinery. Equipment loans secure the equipment itself as collateral. The good news is that little paperwork is necessary, such as a one-page application and bank statements, to get approved. Equipment loans are fast and easy loans to apply for, and sometimes approval can happen on the spot, although additional time may be required. This product is most popular for industries with a heavy reliance on equipment resources like manufacturing and construction.

Product Overview

Rate: Range from 1.09% up to 1.45%

Term: 2 to 7 years

Fees: Origination fees range from 0% to 3% 

Payment: Weekly or daily Monday-Friday fixed ACH

Credit Requirements: Fair to excellent credit score required

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Equipment Loans

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7. Small Business Administration (SBA) Loans for Small Businesses in Minnesota

The United States Small Business Administration (SBA) is a federal government agency headquartered in Washington DC, providing resources, programs, guidelines, and loan guarantees to approved SBA lenders, allowing them to issue loans to Minnesota small businesses. The Small Business Administration’s (SBA) mission is to help American enterprises to start, build, and grow their businesses successfully. The SBA is not a lender. The Small Business Administration (SBA) instead provides a guarantee, giving the approved lenders the ability to take on the risk of business lending and decisions under SBA terms that they would not ordinarily do so on their own. Rights are reserved for any necessary recourse. SBA loans are highly sought after by small businesses, and there are many government agency approved lenders to choose from. The SBA loan application process can be lengthy. Still, with the help of an experienced SBA-approved lender to help your business through the process, the application package can be a smooth and efficient experience. Some SBA loans do require a business plan.

SBA Common Loan Product Overview

Interest Rates: Starting at 3.50%, treasury index plus 1% to 2.5%  

Term: 3 to 25 years 

Fees: Origination fees 0% to 3%

Payment: Fixed monthly

Credit Requirements: Good to excellent credit score required

Small Business Administration SBA Loans, Financing Programs, Updates and Resources in Minnesota

Small Business Administration SBA Standard 7 (a) loan – SBA loan 7(a) is the SBA’s primary program is designed to provide financial assistance to small business with a good track record. Like the guaranty percentage and amount, the terms and conditions may vary by the type of loans to small businesses in Minnesota. Real estate may be used for collateral but is not required. The maximum loan size will not exceed $5 million, and the SBA Express max loan size is no more than a loan amount of $350,000.

Small Business Administration SBA 504 – The SBA 504 Loan is a powerful economic development loan program provides small business another avenue for business funding while promoting business economic development and job creation. The use of proceeds from SBA 504 Loans must be used for fixed assets such as construction, owner-occupied commercial real estate, mixed-use real estate, and/or land improvements (and certain soft costs). This loan can also be used to refinance existing debt on your small business. The maximum SBA loan amount is $5 million. The SBA 504 Loan Program provides approved small businesses with fixed-rate financing to acquire fixed assets for expansion or modernization.  SBA 504 loans are made available through Certified Development Companies (CDCs) and the SBA’s community-based partners for providing SBA 504 Loans.

Small Business Administration COVID-19 SBA Loan Programs, Relief Options & Resources Updates

Small Business Administration SBA Disaster Loan – Economic Injury Disaster Loans (EIDL)-This type of SBA loan not only provides assistance to Minnesota businesses after natural disasters like tornadoes, wildfires, or floods but also when Coronavirus (COVID -19) was declared a nationwide health emergency, Congress provided small businesses access to relief options like this loan for emergency funding. This loan was designed to help Minnesota small businesses retain employees and keep up with other expenses to stabilize the business during Coronavirus (COVID-19) pandemic. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. SBA Express Bridge Loans enable small businesses who currently have a business relationship with an SBA Lender to access up to a loan size of $25,000 quickly.

Small Business Administration SBA Paycheck Protection Program (PPP) -The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan. This is one of SBA’s relief options that provides loans to small businesses in Minnesota affected by the Coronavirus COVID-19 crisis and needs financial help. Under the right conditions, this loan offers forgiveness. This loan was designed for businesses to retain employees and protect jobs during Coronavirus (COVID-19) pandemic.

SBA Express Loans are partially guaranteed by the Small Business Administration (SBA) with expedited credit decisions. SBA Express loans offer credit decisions in 24 to 36 hours. Like all SBA loans, the SBA doesn’t supply any direct lending for SBA Express loans. Instead, the SBA works with a network of approved lenders who actually underwrite and issue the loans. However, the SBA guarantees a portion of the loan amount, meaning if the borrower defaults on the loan, the lender won’t lose all of their money.

Small Business Administration SBA and State & Local Additional Resources and Updates

SBA Learning Center – Financing Your Business– Assess your financing needs and discover SBA financing options for your business.

SBA Grants Programs and Eligibility – Learn about available SBA grants and cooperative agreements to determine if you meet the SBA requirements apply.

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Small Business Administration (SBA) Loans

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8. Invoice Financing for Small Businesses

Invoice financing advances the outstanding balance to a Minnesota business owner to increase cash flow speed to the business. This solution provides cash quickly, and there is no need to wait for outstanding invoices to be collected and received by the client with invoice financing in place. Invoice financing has affordable costs ranging from 1% to 2.5% fee off of the face value of the invoice advanced. This product is standard for industries such as manufacturing.

Product Overview

Interest Rate: None

Term: Not a traditional loan

Fees: 1% to 3% fee based on the invoice. Monthly service fees may apply depending on the volume of invoices factored

Credit Requirements: The credit score of the business owner does not matter

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Invoice Factoring

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U.S. Small Business Administration

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

The quick, convenient, and straightforward way to get the funding you need for your business – now!

Get your quote today by filling out our simple form.

The List of the Most Common Reasons Why Minnesota Businesses Need Financing:

  • Access to working capital
  • Equipment purchase and repair
  • Access capital for inventory
  • Business plan expansion
  • Cash flow shortages
  • Access to capital for emergencies
  • Advertising, marketing, and customer acquisition resources
  • Create more jobs, recruit employee, and provide training resources

Frequently Asked Questions by Minnesota Small Businesses

It is not difficult to obtain a business loan in Minnesota as there are many business lenders and funder’s available that service Minnesota. 

The internet can be an invaluable resource when searching for a business lender. In 2020, most businesses now search on the internet for business lending websites to glean additional information, find reviews on a business lender, and in many cases, inquire about getting more information and apply for a quote on a business lender website. This allows businesses to shop, compare, and potentially save significantly.

Are websites reliable? Well, they are about as trustworthy as visiting any Minnesota small business. You are not evaluating the website as much as you are the company and people you speak and communicate with. The website is merely the port of entry, just as if you were walking into businesses on main street, without leaving the comfort of your home. Both in-person in Minnesota or on a website, it’s the same. The businesses you deal with must earn your trust by treating you well, providing outstanding customer service, and offering products and terms to meet your Minnesota business’s needs.

There are many business lending options available for small business owners with bad credit in Minnesota. Financing options will vary depending on the risks associated with this type of funding and will impact terms, pricing, and costs.

Initiatives, Government Financing Programs, and Grants in Minnesota for Small Businesses:

Minnesota Department of Employment and Economic Development – SBA Financing Programs – The Small Business Administration has financial assistance programs for Minnesota businesses that provide access to debt and equity primarily from banks or other private sources.

Minnesota Department of Employment and Economic Development – Minnesota Small Business Loan Guarantee Program – The Minnesota Department of Employment and Economic Development (DEED) now offers the Minnesota Small Business Loan Guarantee Program. This temporary program, established in response to the 2020 public health emergency, will help Minnesota lenders provide capital to small businesses in Minnesota affected by Coronavirus (COVID-19). These Minnesota Department of Employment and Economic Development relief options can be used for various purposes and can be subordinate to other financing. Allowable loan uses must be exclusively in Minnesota and include machinery or equipment purchases, maintenance, or repair; expenses related to moving into or within Minnesota; employment and economic development, as well as working capital when the working capital is secured by fixed assets when possible.

Minnesota Chamber of Commerce – Economic Development Resources and Business Financing  – Minnesota’s largest broad-based business organization representing more than 6,300 companies – and more than half a million employees – throughout Minnesota. The Chamber builds on its legacy as a voice for business by advancing public policy that grows jobs and the economy and providing valuable services to members, so they continue to stay and grow in Minnesota. A business climate that allows for innovation and forward-thinking leadership will help grow the strength of Minnesota’s economy for future generations.

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