How to Get a Small Business Loan in Philadelphia

You don’t need to be a financial wizard to get a small business loan in Philadelphia, but you do need to be organized.

Getting a loan requires a lot of administrative work: preparing documents, talking to lenders, and filling out applications over the course of weeks to months. Overwhelming to say the least – especially if you’ve never done this before.

First, you need a lender. From your own bank to some of Philadelphia’s non-profit financial institutions, there are a range of options available to you to try and get funding to start, grow or improve your business. Many lenders will guide you through the process and try to help you achieve your goals.

So let’s break down what a business loan is and what options are available in Philadelphia.

A business loan is when a for-profit business owner borrows money from a financial institution or lender to start, expand or improve their business. These loans require a person to understand how much money they need, what they intend to use it for, and how the business will repay the lender.

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Have Private Business Loans, usually from traditional banks or financial institutions, and can be considered “unsecured loans” because they are not backed by government funds. This is riskier for lenders, and may be harder for business owners to secure due to eligibility requirements.

then there is public business loans, supported by government funds. These loans are provided through a network of financial institutions that work with the federal Small Business Administration (SBA) or state and local governments.Ordinary public business loans are SBA Guaranteed Loans. SBA commits to pay a portion of the loan (usually 50% to 90%) so that in the event the business owner cannot repay – SBA will pay the portion they promised to the lender.

Have Loans from Nonprofit Institutions, which uses private and public partnerships to provide loans to small businesses in its area. Many are SBA approved lenders.

and also online lender, but the experts we spoke with encourage you to look for lenders who can meet in person without paying a premium for the loan. Online lenders generally have the fastest approvals and turnarounds, but often have high interest rates and don’t offer much guidance or personal interaction.

Interest rates are calculated based on factors such as the loan amount, your financial history and personal qualifications. By 2022, interest rates on SBA loans will range from 7.75% to 13.5%, compared with 3% to 7% on traditional business loans, according to Lending Tree.

A lot of paperwork outlines how much money your business has, what assets you own, and other financial statements. Lenders may have different requirements, so it’s best to check with the lender first.

This is usually what you need:

  • How much money do you need and what you will do with it (project budget)

  • How your business operates and generates revenue (business plan)

  • How much business experience do you have

  • Standard Business Tax Returns and Internal Financial Statements

  • List of business debts of the business (if any)

  • Your personal financial statement and credit history

  • List of your personal or investment properties (if any)

  • Collateral or property you can promise to hand over if you are unable to repay your loan (if any)

Before you start, check with your own bank for a loan. Best to try an agency you already have a relationship with. It can come in one of three ways: you get a loan, you are denied a loan, or you can see if the bank agrees to work with the SBA to provide you with a loan.

If your bank approves the loan or agrees to work with the SBA to provide you with a loan, you have already started the process. nice job!

However, if your bank declines a loan, ask them why they declined. Under the Equal Credit Opportunity Act, the lender must provide you with a reason for the loan denial if you request it within 60 days of the loan denial. Get reasons for loan rejection so you can see where you need to improve, whether it’s your debt-to-income ratio or your credit score.

With that in mind, be prepared to look elsewhere for lenders. You can search for lenders through a verified search tool, visit your local business resource center in person or contact a community organization near you.

These tools are provided by the SBA, a public-private partnership in Philadelphia, and the National Network of Community Development Financial Institutions (CDFIs). Remember that applying through these tools does not guarantee you a loan, but it will connect you with potential lenders who can offer you a loan.

  • SBA Lender Matching Connect business owners with SBA-approved lenders. After you apply and provide information about your loan needs, you will be contacted by interested lenders within two days. Compare interest rates, terms, and fees for each lender, then choose the loan to apply for. You can also find more resources online.

  • Philadelphia Business Loan Network A universal app for business owners to connect with over 30 approved lenders in the region. After you apply and provide information about your loan needs, you will be contacted by interested lenders within 10 business days. Compare each lender’s interest rates, terms, and fees, and choose a loan to apply for (any lender on this list is a good place to start). For assistance, call 215-683-2100 or email

  • CDFI Locator is a search tool that provides business owners with a list of community financial institutions in their area. CDFIs provide financing to small businesses through loans, grants, and in some cases business consulting. Find a CDFI near you and get in touch to learn about their loan opportunities.

These centers can provide referrals to lenders and help you with a full range of services including business planning, administrative assignments, seminars and training.

Small Business Development Center (SBDC) is a statewide resource center for business owners seeking help with a wide range of business needs, including help finding loans. While SBDCs themselves don’t always offer financing or loans, they can help you develop your business strategy and find lenders in your area. In the Philadelphia area, Temple University and Widener University both have SBDCs. You can apply for a free business consultation online.

Community Development Corporation (CDC) is a nonprofit organization that provides services to communities in housing, employment, business, and more. You can learn more about business loans or find referrals in other places that can help. This is a list of CDC Small Business Resources.

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