How to Get a Small Business Loan in Alaska
If you’re a small business owner in The Last Frontier or would like to become one, a small business loan can help you out. In this post, we’ll take a closer look at small business loans in Alaska and how they may benefit your unique business.
What to Do with a Small Business Loan in Alaska
If you don’t have the cash to cover all your business expenses upfront, a small business loan in Alaska might be the ultimate solution. You can use it to pay for the following:
- Real estate
- Expansion costs
Types of Small Business Loans in Alaska
When you explore small business loans in Alaska, you’re sure to come across a variety of options. The lending institution and loan type you choose will determine the eligibility requirements and loan application process. While some lenders will approve most business owners and provide fast funding, others come with rigorous criteria and a lengthy funding process.
Traditional Bank Loans
Traditional bank loans are installment loans. You receive a lump sum of money upfront and repay what you borrow via fixed monthly payments. These loans are usually available at most banks, credit unions, and online lenders.
Business Lines of Credit
Business lines of credit are similar to credit cards. You can draw funds any time you’d like up to a set credit limit, which is based on your credit history. If you don’t know how much money you need, this flexible financing option is worth considering.
No matter your industry, there’s a good chance you depend on equipment to operate successfully. Whether your goal is to buy or upgrade computers for your accounting firm or ovens for your kitchen, an equipment loan is ideal. While most equipment loans come with low rates and long terms, they can only be used to fund equipment.
Invoice factoring is when you sell your invoices to a factoring company at a discounted rate. Once you do, the company will provide you with a lump sum of cash. Then, they’ll collect payments on your behalf, charge you a fee, and send you the remaining amount. Even though invoice factoring offers fast funding, it may be expensive.
Business Credit Cards
You can use business credit cards to cover everyday business expenses. Most business credit cards offer rewards like cash-back, travel points, discounts on office supplies, merchandise and more. As long as you repay your balance in full every month, a business credit can help you build or improve your credit.
Merchant Cash Advance
If you receive credit card and debit card payments from your customers, you may qualify for a merchant cash advance. The lender will disperse an upfront payment in exchange for some of your future card sales. You can repay your advance through a percentage of your daily sales or via fixed withdrawals from your bank account.
Resources for Alaska Business Owners
If you own or manage a small business in Alaska, these resources should be on your radar.
- Alaska Small Business Development Center (SBDC): Alaska SBDC provides one-on-one small business coaching and workshops that are delivered via self-service videos and live webinars. Its website also contains useful tools like a business plan outline, a hiring checklist, and tips on bookkeeping.
- State of Alaska Loan Programs (Division of Economic Development): The Division of Economic Development offers several loans for small businesses in Alaska. You may lock in a loan to fund alternative energy, start a mariculture operation, or run an Alaskan commercial charter.
- Alaska SCORE: Alaska SCORE is a mentorship program by the SBA. You can connect to a mentor for free, one-on-one counseling and participate in affordable workshops that may help you steer your business toward success.
- Made in Alaska (Division of Community and Regional Affairs): If your business sells products that are manufactured or handcrafted in Alaska, Made in Alaska may be very beneficial. You can qualify for the Made in Alaska logo on your products as long as you meet certain eligibility requirements.
- FishBiz Project: Offered by the University of Alaska at Fairbanks, the FishBiz Project was created to help Alaskans in the seafood harvesting business. It can provide you with the tools you need to start, manage, and grow your venture.
Conclusion: Explore Alaska Business Loan Options
If your goal is to launch your Alaska business or take it to the next level, Alaska business loans can provide you with access to working capital. Before you commit to one, however, be sure to read the fine print and ensure you understand all the terms and conditions.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.