Small Business Loans in Alabama

Alabama is famous for its top-ranked college football teams, but Alabama is also well-known for its highly competitive communities of small businesses. And just like the coaches that support the sports teams, Alabama’s small businesses have the support of a broad group of lenders willing to make loans to aid the growth and development of these businesses.

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Types of Alabama Small Business Loans

Small businesses in Alabama are engaged in a diverse range of industries that include manufacturing, biotechnology, healthcare, agriculture, mining, and the businesses that support their employees, such as restaurants, dry cleaners, trucking, and lawn care. Fortunately, Alabama’s banks and credit unions have the broad experience needed to arrange all types of loans to support these small businesses.

SBA loans

SBA loans are business loans that are partially backed by the Small Business Administration (SBA), a federal agency. These loans are serviced by private lenders, but are popular because they generally have good interest rates.

Line of credit

Use a line of credit as a flexible form of financing. Unlike with a loan, this option does not involve a big disbursement upfront that you must repay, providing a flexibility that better fits many entrepreneurs’ needs.

Term loan

Term loans are common small business loans in which you would apply for a large disbursement of capital and then repays it over several years, along with fixed or variable interest.

Equipment finance

With equipment financing, you receive a piece of equipment and then pay off the cost of the equipment in installments. This way, your business can make money off the equipment immediately, even if you don’t have the funds to buy it at the sticker price.

Accounts receivable financing

Accounts receivable financing is an alternative form of business financing in which your unpaid invoices serve as collateral for a lump disbursement of funds.

Alabama Small Business Loan Options

Small businesses in Alabama have access to traditional lenders, such as banks and credit unions, in addition to other types of financing resources.

Alabama Credit Union makes loans at attractive rates to small businesses to use for building and property purchases, equipment purchases, and buying vehicles for business use, in addition to setting up credit cards to pay for business expenses.

LiftFund is a nonprofit organization that uses donated funds to finance small businesses that are underserved by the traditional lending community.

Regions Bank is a nationally recognized bank that provides a full range of services for small businesses, such as lines of credit, term loans, cash management systems, and SBA loans.

The Alabama Small Business Capital (ASBC) assists healthy, growing companies secure SBA 504 loans.

Four simple steps to funding.

Tell us about your business.

Answer a few simple questions and complete the application in minutes.

Submit your application.

We’ll present your application to our marketplace 75+ lenders. Applying is free and won’t impact your credit score.

Compare offers.

Find the funding option with the terms that best fit your small business goals.

Get funded.

Once you accept, funding can hit your bank account in as little as 24 hours.

FAQ about Small Business Loans in Alabama

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FAQs

What other resources are available to Alabama small businesses?

Small businesses in Alabama not only have reliable sources of financing, but can also get advice from several organizations and join networks that will connect them with other entrepreneurs and business executives.

SCORE is a nonprofit organization staffed by former business executives who are available to mentor and provide management advice to aspiring entrepreneurs. The Alabama Small Business Development Center has advisors who can help small business owners with strategic planning, business planning, financial cash flow projections, and the creation of marketing systems.

What Alabama small business grants are available?

Certain types of businesses in Alabama may qualify for grants.

The Innovate Alabama Supplemental Grant Program awards grants to small businesses that have developed cutting-edge technologies that are ready for commercialization. In addition, business owners can search for other types of grants that may be available for Alabama companies through the federal website Grants.gov.

What do I need to qualify for a loan in Alabama?

To qualify for a small business loan in Texas, you need to officially launch your business Texas-style. You need to choose a structure for your business—sole proprietorship, corporation, or LLC (limited liability company). Usually, incorporated businesses have to register with the Texas Secretary of State, while sole proprietorships often register with their county, so be sure to check your local regulations before conducting business. In many cases, you will also need a business license from the Texas Business Permit Office.

Before submitting your application for a loan, you should connect with your lender and determine what types of documentation they need and any other requirements. One requirement will be to decide on a business structure. You can start out with a sole proprietorship if the business consists only of yourself and maybe one or two other employees. If you are going to incorporate or form a limited liability company, you will need to confirm the name availability and register the business with the Alabama Secretary of State.

To improve your chances of qualifying for a loan, you will need to assure the lender that you have a legitimate and practical use for the funds, that the lender will have sufficient collateral to secure the loan, and that there is a very high probability that the loan will be paid back within the terms of the agreement. To establish this credibility, you’ll need to present documentation describing how the funds will be used and cash flow projections that clarify that the loan will be repaid even if certain returns and revenue levels are not achieved.

Which loan is right for my Alabama business?

Loans are structured around the use of the funds and the sources of repayment. Online platforms, like Lendio, can provide experienced financial consultants who can analyze the business owners’ situation and make recommendations as to the ideal financing options for your business.

Long-term loans that have installments paid over several years are used to finance the purchase of fixed assets, such as machinery, real estate, and acquisitions. These loans are repaid out of the cash flow generated by the fixed assets being financed.

Funds needed to fill temporary gaps in cash flow are typically financed with short-term loans or revolving lines of credit. Short-term financing is repaid with the conversion of current assets in the cash flow cycle.

How can an Alabama business loan help my business?

Business loans help fund a company’s operations, growth, and development. It’s often difficult to finance a company completely with owner’s equity and investors’ contributions. Besides, when you borrow money to finance your business, you don’t have to give up any ownership of your company, which you would have to do if you had accepted money from outside investors.

What is an SBA preferred lender?

An SBA preferred lender is a lender that’s been approved by the Small Business Administration to administer SBA loans without additional approvals from the SBA. Typically these lenders have years of experience and can approve SBA loans faster than non-preferred lenders.

What are the benefits of an SBA loan?

SBA loans are backed by the government and offer lower interest rates than other types of small business loans. They typically require a minimum time in business of two years and a credit score of 650+.

Ready for funding?

See what you can qualify for on the Lendio Marketplace.

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