Business Funding Opportunities in Philadelphia
Philadelphia is not only the most populous city in Pennsylvania, but a storied center of American history, culture, and the arts. It serves as an approximate mid-point in the northeast corridor, with Baltimore/Washington to the south, and New York City to the north.
This strategic location, along with the important waterway access via the Delaware River, has led to Philadelphia’s growth and prosperity as a center of commerce over the last several hundred years, which it remains today.
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Modern Philly is an incredibly diverse and multi-cultural city, and a draw for tourism as well as business purposes.
The economy today revolves around several important sectors, including finance, health care, technology, biotech, petroleum refining, manufacturing, food, education, and transportation, with many major companies having headquarters or offices in the greater Philadelphia metro area.
One of the most compelling reasons why many business people consider the Philadelphia area as a great place to start a business comes from affordability.
Unlike the incredibly expensive urban areas found in DC, Baltimore, or New York, Philadelphia is considerably less expensive in terms of cost of living, property costs, and everyday expense costs.
In short, business people can get more value for their money by locating in Philadelphia than they can in most other major cities along the eastern seaboard.
Even with that said, though, cash and funding are always in short supply for new small businesses or entrepreneurial ventures. Most small businesses need to rely on borrowing in order to fund their operations, purchase inventory, hire personnel, buy, rent, or lease equipment, and so on.
To that end, business loans in Philadelphia are often a hot commodity, and something that any business owner should consider learning more about in order to maximize their managerial efficacy and set their business up for success.
When it comes to loans in Philadelphia and parts beyond, small businesses have a number of different options to choose from – and not all of them are what people think of as traditional loans, either.
Modern small business financing includes a number of different products and services, not only small business loans, but also small business lines of credit, merchant cash advances, short-term business loans, and several other options.
These can often be obtained from banks or private lenders, which each offer different advantages and drawbacks. Importantly, each of these small business funding options have different pros and cons associated with them, and are ideally used for somewhat different purposes.
It’s useful for small business owners to understand the basics of how these different options work, so that they can make the best decisions for their small business funding needs.
To that end, we’ve put together this introductory guide to small business loans in Philadelphia. We’ll look at these different types of small business funding options in greater detail, to see how they compare to one another.
We’ll also spend some time talking about how and why to decide between banks and private lenders as your source for Philadelphia loans.
Finally, we’ll highlight one of the top private lenders in the US, BizFly Funding, and why so many small business customers choose them as their source of loans in Philadelphia and all throughout the country.
Different Types of Small Business Funding Options
First, let’s start by discussing some of the different small business funding options that are available for business owners today.
If you’ve never dealt with small business financing before, it’s important to understand the basics of the different types of credit products and loans in Philadelphia that are available to help fund your business activities.
While you’re in no way limited to only selecting one particular option, it’s useful to know how they work, and what they offer, so that you can best select the kind of small business funding option that aligns with your cash needs, and costs you the least amount of money.
Not every type of small business funding may be available from every lender, and the qualification requirements, maximum available loan amounts, and similar details will likewise vary.
However, generally speaking, the most common kinds of small business funding that are available today include:
- Small business loans, traditional loans that provide a lump sum of cash for your small business.
You repay these loans over a period of time (usually several years), with interest, typically on a monthly repayment schedule. These are one of the most popular and common forms of small business funding, and make up the majority of business loans in Philadelphia.
- Short-term business loans, similar to the loans discussed above, but usually offered for a shorter loan term (typically months to a year or two at most).
These kinds of small business loans also typically have a faster repayment requirement, with typically weekly repayments rather than monthly.
- Small business lines of credit, which aren’t really a loan per se, but work more like a credit card account.
Instead of getting a lump sum, you are approved for access to a credit facility, with a maximum amount you can borrow. At any time, you can borrow on-demand whatever amount you need against the facility, provided the total outstanding balance is below the maximum credit amount.
Then, you pay interest and make repayments only on your outstanding balance, much as with a credit card. The difference here is that you’re able to withdraw and use the line of credit as cash, rather than only for credit card purchases.
- Merchant cash advances, which are growing in popularity, particularly as a form of loan in Philadelphia, PA today.
They provide a lump sum of cash, just like a traditional small business loan. However, the repayment is very different, and is handled automatically from your future debit and credit card sales.
Effectively, you’re pre-selling your debit and credit card sales to the merchant cash advance company, at a discount to account for interest. Repayment isn’t tied to a calendar date like with a traditional loan, but is dynamic based on sales.
This makes it much easier to repay the loan and avoid default, which is one of several reasons why merchant cash advances are popular with sales-heavy businesses.
- Debt consolidation loans, useful to get a handle on existing debt and consolidate it into a single debt instrument, often at a lower interest rate, helping you save money on debt service and put more towards your business operations.
- Small business loans for women entrepreneurs and women-owned businesses, ensuring better access to small business funding for a demographic that has traditionally been discriminated against by lenders.
- Bad credit business loans, with relaxed credit score and other requirements, to help provide more businesses access to capital to fund their business, even with a poor credit score or limited credit history.
Where to Get the Best Loans in Philadelphia
The next major decision you’ll need to make to obtain a business loan in Philadelphia or elsewhere is what lender to choose. In most cases, this boils down to a decision between a bank and a private lender. Naturally, you can apply to multiple banks, multiple private lenders, or both.
However, in most cases, the vast majority of small business owners looking for business loans in Philadelphia and throughout the US have found that private lenders are typically the better choice. There are several reasons for this, as we’ll expand on below.
For a start, banks typically only offer what are known as secured business loans, whereas private lenders are more prone to offer both secured and unsecured loans, or even just unsecured loans.
This term has nothing to do with how “safe” the loan is, but rather whether or not the lender is protected against the borrower’s defaulting on repayment. Secured loans require the borrower to put up collateral, to ensure the bank is made whole if they default.
Unsecured loans do not require collateral. As a result, secured loans tend to have slightly lower interest rates, but a lot more risk for small business owners. Unsecured loans have slightly higher interest rates, but no risk of losing valuable assets.
The lack of collateral also makes it easier to qualify for these loans, and allows unsecured loans from private lenders to be approved, and cash provided much faster than secured loans – often a matter of hours to days rather than days to weeks.
Banks also are notorious for having a limited number of small business funding options, and having some fairly demanding qualification requirements.
Some banks reject as many as 80% of the applicants for their loans and credit products, and often have such difficult-to-meet requirements that they place much-needed cash out of reach of otherwise deserving small businesses.
This is because banks are very opposed to taking risks – in fact, there are regulations and laws that govern their capitalization and risk management in many cases, as banks almost invariably also have depositor accounts, which fall under a tight set of rules.
Private lenders typically only offer lending services, and therefore don’t have these same restrictions, and can take on customers who banks deem “too risky,” enabling greater access to credit and loans in Philadelphia and throughout the US.
All of these differences add up to a number of benefits in favor of private lenders, and explain why small business owners typically prefer to deal with private lenders over banks and traditional financial institutions.
Key benefits include:
- Private lenders tend to have more easily-met qualification requirements for their business loans, merchant cash advances, and other products. This can include lower credit score requirements, less time in business, and less monthly revenue as compared to the requirements at banks.
- Most private lenders provide a superior lending experience, through a commitment to customer service, and often specialize in funding just for small businesses or other specific market sectors.
- Private lenders and their unsecured loans typically offer a much faster application and approval process. Many private lenders have simple online applications and approvals that allow for same-day service and funding within 1 business day.
- Unsecured loans and credit products from private lenders, as discussed above, present less risk for small business owners.
- Your business and your needs are far more valuable to a private lender than a multinational bank, and consequently you are typically able to secure a wider range of small business funding options, with greater approval odds, no collateral requirements, better and faster service, and faster funding when you choose a private lender over a bank for your business loans in Philadelphia or any of the 50 states in the US.
BizFly Funding: The Best Choice for All Your Small Business Funding Needs
Hopefully by now, it’s clear that private lenders are the better choice when you need small business funding, including credit and loans in Philadelphia.
No matter what kind of small business financing option you may need, when you’re ready to start your application, you should seriously consider BizFly Funding as your source.
BizFly Funding is one of the leading private lenders in the US, and exclusively services the funding needs of the small business community.
They offer all of the different small business funding options we’ve discussed in this guide, with no collateral requirements, easily-met qualification requirements, competitive interest rates, and more.
Whether you need a traditional small business loan in Philadelphia, or are more interested in a merchant cash advance, business line of credit, or one of several other options, BizFly Funding is your go-to choice.
Depending on your qualifications and chosen financing products, you can borrow up to $1 million, which can make a huge difference in the growth potential for your small business.
Speaking of qualifications, BizFy Funding, like most private lenders, have fairly minimal qualification or eligibility requirements for the vast majority of their small business financing products.
Requirements can vary, particularly depending on how much you are seeking to borrow, but the basic requirements for business loans in Philadelphia, and some of the other top financing products, are highlighted below.
- Loan term of 2 to 36 months
- Minimum 6 months in business
- Credit score of at least 500
- $10,000 minimum monthly revenue
- Loan amounts of $5,000 to $1 million
- Interest rates of 9 to 45%
- Loan term of 6 to 24 months
- Minimum 12 months in business
- Credit score of at least 600
- $10,000 minimum monthly revenue
- Loan amounts of $15,000 to $1 million
- Interest rates of 9 to 45%
- Loan term is variable (repayment is based on sales and not tied to the calendar)
- Minimum 2 months in business
- Credit score of at least 500
- $8,000 minimum monthly revenue
- Loan amounts of $8,000 to $250,000
- Factor rates of 24 to 49%
- Credit line term is variable
- Minimum 6 months in business
- Credit score of at least 650
- $10,000 minimum monthly revenue
- Credit line amounts of $5,000 to $250,000
- Interest rates of 5 to 10%
BizFly Funding doesn’t just make it easier for your small business to obtain the funding it needs. In addition, they help you to spend less time on paperwork and waiting for approval, so you can spend more time managing your business and setting it up for success.
BizFly Funding uses a simple online application that takes most people 30 minutes or less to complete. Within hours, a BizFly Funding team member will review your application and get back to you to discuss your options and needs.
If approved, you can have your funds within 1 business day in most cases, allowing you to take advantage of fast-moving business opportunities and respond to fluctuating market and customer needs.
To learn more or to start the application process, visit BizFly Funding online at https://bizflyfunding.com.
