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Small Business Loans in Arizona: Financing Options for Local Businesses

Are you a small business owner in Arizona looking for financing to start, grow, or expand your company? With so many lending options available, it can be overwhelming trying to determine which type of small business loan is best for your unique situation.

In this comprehensive guide, we’ll walk through the various SBA loan programs and financing options for small businesses in Arizona so you can make an informed decision on how to get the funding you need on favorable terms. Read on to learn more about loans for AZ businesses!

Article Outline

  1. An Overview of SBA Loans and Financing Options for Arizona Small Businesses

  2. Who is Eligible for SBA Loans in Arizona?

  3. How Do I Apply for an SBA Loan in Arizona?

  4. What are the Benefits of SBA Loans for AZ Small Businesses?

  5. How Do I Choose the Right Type of SBA Loan?

  6. What Documents Do I Need for an SBA Loan Application?

  7. Tips for Getting the Best SBA Loan Rates 

  8. Where Can I Find SBA Lenders in Arizona?

  9. Local Arizona Lenders Can Help With Your Small Business Loan Needs

An Overview of SBA Loans and Financing Options for Arizona Small Businesses

The U.S. Small Business Administration (SBA) offers a variety of loan programs to help small businesses get access to capital. SBA loans are government-backed, which means the SBA guarantees a portion of the loan to the lender. This makes lenders more willing to approve financing for small businesses.

Popular SBA loans include:

  • SBA 7(a) Loan - The SBA's primary and most flexible loan program. Maximum loan amounts up to $5 million. Can be used for working capital, equipment, real estate, and more.

  • SBA 504 Loan - For purchasing and improving real estate or equipment. Requires 10% down and financing up to 90% by third-party lenders.

  • SBA Express Loan - Fast approval and funding in 36 hours or less. Loan amounts up to $350,000—streamlined application process.

  • SBA Microloan - Loans up to $50,000 from non-profit lenders for startups & businesses in underserved communities.

In addition to SBA loans, small businesses in Arizona can look into alternative financing options such as:

Who is Eligible for SBA Loans in Arizona?

To qualify for SBA-guaranteed financing in Arizona, you must meet these requirements:

  • Operate for profit

  • Have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the preceding two years

  • Be able to repay loans from cash flow

  • Have invested equity into the business

  • Have adequate assets for collateral

  • Have an acceptable credit history

  • Be of good character

How Do I Apply for an SBA Loan in Arizona?

Applying for an SBA loan involves these key steps:

  1. Choose an SBA-approved lender and check you meet eligibility requirements

  2. Gather required documents (business plan, financial statements, collateral asset details, etc.)

  3. Submit complete loan application and all supporting documents

  4. The lender analyzes the application and makes an initial credit decision

  5. Lender submits application to SBA for final approval

  6. SBA reviews and provides loan authorization if approved

  7. Lender closes loan and disburses funds per the terms

On average, the SBA loan process can take 1-3 months from submission to funding. To streamline the process, look for Arizona's SBA Preferred Lenders with authority to approve loans without SBA review. This expedites funding, so you get access to capital sooner.

What are the Benefits of SBA Loans for AZ Small Businesses?

Some top benefits of SBA loan financing include: 

  • Low down payments - SBA 504 loans allow down payments as low as 10%

  • Lower monthly payments - SBA loans can amortize up to 25 years to reduce monthly payments

  • Competitive rates & terms - SBA loans offer favorable interest rates and longer repayment terms

  • Funding startups - Can be used to start or expand your Arizona small business

  • Larger loan amounts - Access up to $5 million in maximum financing

  • Longer repayment - Take 10 years or more to repay - great for equipment purchases

  • Flexible uses - Use for working capital, equipment, renovations, real estate & more

How Do I Choose the Right Type of SBA Loan? 

Choosing the right SBA loan involves matching your needs to the loan purpose, benefits, eligibility requirements, and loan terms.

SBA 7(a) Loan

The SBA 7(a) loan is the most common and flexible type of SBA loan, used for:

  • Acquiring land, facilities, equipment

  • Renovations & leasehold improvements  

  • Increasing working capital, inventory, staff

  • Refinancing existing business debt

  • Commercial real estate purchases 

The loan amount is up to $5 million with 10-25 year repayment terms. Rates are typically prime + 2.75%. The SBA guarantees 75-85% of the loan amount.

SBA 504 Loan

The 504 loan finances major fixed assets like real estate or equipment. Uses include:

  • Purchasing existing buildings

  • Constructing new facilities

  • Installing major equipment & machinery  

  • Infrastructure improvements

The loan amount is up to $5 million with 10-20 year repayment. Requires 10% down payment below market interest rates. SBA guarantees 40% of the loan.

SBA Express Loan 

The SBA Express loan offers a fast and streamlined application process. Use for:

  • Securing working capital

  • Purchasing inventory, supplies, or equipment

  • Renovating facilities

  • Replenishing cash flow

The loan amounts to $350,000 with a 7-year repayment. Rates are negotiable with the lender. SBA guarantees 50% of the loan amount.

What Documents Do I Need for an SBA Loan Application?

When applying for an SBA loan in Arizona, have these documents ready:

  • SBA loan application form

  • Business plan with financial projections

  • Formal business legal agreements & licenses

  • Business tax returns for the past 3 years

  • Personal financial statements

  • Personal tax returns for the past three years

  • Debt schedule listing business & personal debts

  • Collateral asset details (property, equipment, etc.)

  • Purchase agreements for real estate & equipment loans

Tips for Getting the Best SBA Loan Rates

Follow these tips to help get the lowest SBA loan interest rate possible:

  • Have an excellent personal and business credit score of over 720

  • Provide strong revenue projections and business plan

  • Make larger down payments if possible

  • Use commercial real estate or equipment as collateral

  • Take a shorter repayment term (e.g. ten years)  

  • Apply through an SBA Preferred Lender for better rates

  • Consider an SBA Express Loan for lower rates

Where Can I Find SBA Lenders in Arizona?

Reputable SBA lenders operating in Arizona include:

  • Lendtek

  • Live Oak Bank

  • Wells Fargo

  • Bank of America

  • BBVA

  • Prestamos CDFI

  • Tucson Federal Credit Union

  • National Bank of Arizona  

  • Compass Bank

  • Celtic Bank

  • KeyBank

Many local banks and credit unions also offer SBA loans right here in Arizona. Expand your search to find the most financing options.

Local Arizona Lenders Can Help With Your Small Business Loan Needs

As a top SBA Preferred Lender in Arizona, Lendtek can help you access the best SBA and conventional small business loan options. We offer business checking and savings accounts to easily manage your finances and loans tailored to your needs.

Our experienced Arizona lending specialists have the expertise to guide you through the loan process and identify the optimal financing for your goals. We understand the needs of local startups and growing businesses and provide helpful financial resources.

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