Small Business Loans in Alaska

Alaska, the Last Frontier State, offers almost unlimited opportunities for entrepreneurs to start new businesses and expand existing ones. The banks and other financial institutions, including state and local government agencies, have a multitude of loan programs to aid small businesses in their journey.

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Types of Alaska Small Business Loans

Lenders in Alaska have experience in making loans to all types of small businesses, such as agriculture, fishing, and tourism. Loans can be either short-term for temporary needs or long-term for acquisition of fixed assets.

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.

Alaska Small Business Loan Options

The Last Frontier State has numerous commercial banks, government agencies, and nonprofit organizations that offer loans to small businesses.

Spruce Root Loan Program works with businesses to develop a plan, budget, and financial structure and create loan terms that fit the business’ needs.

State of Alaska Loan Programs work through the Division of Economic Development to provide loans for businesses in the fishing industry, agriculture, or alternative energy.

Alaska Industrial Development and Export Authority participates with Alaskan financial institutions in purchasing long-term loans that can be used to finance projects that will enhance the state’s businesses.

Alaska Commercial Fishing and Agriculture Bank is a member-owned cooperative set up to finance businesses operating in agriculture, commercial fishing, tourism, or natural resources.

Southeast Alaska Revolving Loan Fund is a non-profit institution that finances projects that will increase or retain jobs in Southeast Alaska.

Four simple steps to funding.

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

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

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

FAQ about Small Business Loans in Alaska

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FAQs

What other resources are available to Alaska small businesses?

The Alaska Small Business Development Center offers guidance and advice to small business owners, whether starting up a new one or expanding existing businesses. The SBDC can provide on-site services in addition to online support. The Anchorage Economic Development Corporation is a nonprofit organization that connects business owners with local community and government resources.

The U.S. Small Business Administration has an office in Anchorage that can arrange SBA loans and provide consulting advice to entrepreneurs and business owners.

What Alaska small business grants are available?

Alaska has a grants program that supports minority women entrepreneurs to build their businesses and secure contracts to increase jobs. Another Alaskan program provides grants to graduate students to pursue projects that benefit specialty crop industries.

If you think your Alaska business may qualify for a federal grant, it’s highly recommended that you take a look at Grants.gov.

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

Before you apply for a loan with a lender, you need to choose a business structure. In the beginning, a sole proprietorship may work if you only have yourself and a couple of employees, but as you grow and add more people, you’ll want to either incorporate or form a limited liability company. At this point, you’ll need to register the company with the Alaska Secretary of State.

The lender will want to see that you’ve carefully considered the need for a loan and that it fits into the debt structure and cash flow of your business. As you present documentation stating the purpose of the loan, a description of the collateral that will adequately secure the loan, and the schedule on which you intend to pay the loan back, the lender will then make a choice to extend financing to your business or not.

Which loan is right for my Alaska business?

Loans should be structured according to their purpose. Let’s say you’re in the business of drilling for oil in Alaska. If you need heavy-duty trucks to carry materials and supplies to the job site, these purchases should be financed with long-term loans, payable over a few years. On the other hand, if you’re using the money to purchase the supplies, such as drilling fluids, carried by the trucks, then short-term loans or a revolving line of credit would be the best financing method. Online platforms, such as Lendio, have financial advisors who can listen to a business owner’s needs and match them up with the appropriate type of financing.

How can an Alaska business loan help my business?

Businesses typically need more money than just the owner’s equity to operate. Taking out loans and various other forms of debt is part of funding the growth and operations of a business. Retail businesses, for example, will need more funds during the holiday season to carry higher levels of inventory that can be financed with short-term loans. And long-term loans can enable an owner to purchase expensive machinery and equipment without having to lay out all cash up front. Loans play a vital role in the growth and development of any business.

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