Expert Tips on Small Business Loans in California


California has close to 4 million small enterprises within its borders. The Golden State depends on these businesses to improve its economy. As a small business owner in the state, getting working capital can prove beneficial for your company. With sufficient cash flow, you can pay invoices and other business expenses. 

Loans could be used to meet your various needs including purchasing supplies and buying real estate to grow your operations. This guide offers in-depth details on different California small business loans

Accion Rapid Loans 

Though Accion offers loans to small businesses countrywide, its rapid loans can only be accessed by small businesses in California. Particularly those in San Bernardino, San Diego, Riverside, and Imperial counties. 

Businesses in these counties can access loans from $300 to $8000 with a three-year repayment plan. At first, the interest rates are set from 14% to 18% with a 1% additional discount for veterans, active-duty services staff, and their spouses. 

Rapid loans are available three days upon approval. Some of the requirements for the Accion rapid loan application include: 

  • Business tax returns for the previous year 
  • Business address 
  • Proof of address 
  • Registration 
  • At least 550 credit score 

Small Business Loan Guarantee Program 

The California government partners with various FDCs (Financial Development Corporations) to allow small businesses access to the Loan Guarantee Program. The program gives 80% to 95% of the small business loans from FDCs. 

Entrepreneurs who qualify for assistance under this program have to run a small business in California with a maximum of 750 employees. Loans for small businesses are available up to $20 million, although the guaranteed maximum is $2.5 million. The average maturity period for these loans is at least seven years. Lastly, depending on the direct lender offering you the loan, the interest rate may differ. 

VEDC (Valley Economic Development Center)  

This non-profit organization offers three kinds of small business loans. Standard business loans may vary from $50000 to $500000 with a repayment period of six months to five years. Generally, there is a 2% to 3% original fee with a minimal interest rate of 8%. 

VEDC microloans are typically small in value varying from $2500 to $50000. Just like standard business loans, VEDC microloans take six months to five years to repay. The interest rate for VEDC microloans ranges between 5% and 7.7%. You can expect a 3% to 5% original fee on VEDC microloans. 

Microenterprise loans are the smallest loan plan ranging between $500 and $2500. There is an 8.5% interest rate on these loans payable between six months and two years. 

SMART Funding Program 

The Housing Authority/County Community Development Commission of Los Angeles offers this program to extend financial aid to small and medium-sized enterprises. Companies in industries such as transportation, engineering, and medical could apply for these loans. SMART Funding program offers loans from $25000 to $1.5 million. 

These loans could be used for different purposes such as real estate purchases, infrastructure acquisitions, leasehold renovations, and product development. You could also use the funds to refinance debts, retain your workforce, and create jobs. 

CalCAP (California Capital Access Program)  

CalCAP has a reserve program for credit losses which caters to 100% of the loans issued by eligible lenders to small businesses in California. Under this program, business owners could apply for a maximum loan of $5 million. 

Nonetheless, certain borrowers seeking loans under this program can only get an enrolled capital of up to $2.5 million spread over three years. Only companies in California can qualify for a loan under the CalCAP scheme. A minimum of 51% of your employees, payroll, profits, or business revenue should be within California state. 

Does My Business Qualify for a Loan in California? 

Various lenders may have different eligibility requirements. However, most lenders consider the following: 

  • Annual business revenues 
  • Credit score 
  • Length of time you’ve been in business 

You may have to establish business credit which will be separate from your personal credit score. Your chances of qualifying for a loan are higher if your business has a high credit score. For startup entrepreneurs, your business may be ineligible for SBA and bank loans. You should therefore apply for short-term funding and microloans. 


If your business is ineligible for the above loans you can apply for online loans. Nonetheless, seeking local funds and online funds is not mutually exclusive. Before making a decision, you should consider the resources available to you at a local, state, and national level. 

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