June 23, 2022

How to Get a Small Business Loan in Pennsylvania

If you’re a small business owner in the Keystone state or wish to become one someday, small business loans may be useful, no matter your industry. Here’s a closer look at small business loans in Pennsylvania. 

Uses for a Small Business Loan in Pennsylvania

Business financing can help you pay for a variety of business-related expenses. You can also use it to build or grow your credit and open the doors to attractive rates and terms in the future. Some of the most common uses for Pennsylvania small business loans include:
  • Startup costs
  • Commercial real estate
  • Debt consolidation
  • Refinancing
  • Inventory
  • Marketing
  • Equipment
  • Expansion costs

Types of Small Business Loans in Pennsylvania

There are a variety of small business loans in Pennsylvania. When you shop around, you’ll find that some business loans are easier to qualify for than others. However, loan programs with strict qualification criteria may offer better rates and terms. Here’s an overview of some of the most common types of small business loans.

SBA Loans

SBA loans are partially guaranteed by the SBA and distributed by SBA-approved lenders. They offer up to $5 million in funding with repayment terms of up to 25 years. There are several SBA loan options, including:
  • The Standard 7(a)
  • 7(a) Small Loan
  • SBA 504 Loan
  • Export Loan
  • SBA Express
  • Veterans Advantage
  • CAPLines

Term Loans

Traditional bank loans offer a large sum of money upfront. You can get this funding option from banks, credit unions, and online lenders. While they usually require solid credit and sufficient revenue, these loans are known for low rates and attractive terms. In most cases, funding takes anywhere from a few weeks to a few months. However, you can also secure a business loan from an alternative lender. Their business loans also come with attractive terms, various funding options, and an easier loan process.

Commercial Mortgage 

A commercial mortgage works like a traditional mortgage you take out when buying a home. You can use this financing option to purchase land or property for your business, like an office building, warehouse, hotel, or restaurant. It can also help you renovate your existing space. Commercial mortgages usually come with variable interest rates that fluctuate based on the market.  

Business Line of Credit

business line of credit might be worth considering if you’d like a flexible working capital solution. Upon approval, you can withdraw funds whenever you’d like up to a set credit limit, usually based on your credit and other factors. Notably, you’ll only pay interest on the loan amount you borrow. Compared to a credit card, a line of credit typically offers larger amounts and lower rates.

Merchant Cash Advance

If you accept debit and credit card payments from your customers, a merchant cash advance (MCA) might be an option. You get a lump sum payment upfront in exchange for a portion of your future sales. Then, you repay it with a factor rate through daily, weekly, or bi-weekly payments. Your factor rate will depend on the financial strength of your business. 


Mission-based nonprofits and government organizations like the SBA and USDA offer microloans. If you need a smaller loan amount of up to $50,000, a microloan might make sense. In addition to funding, many microloan lenders offer mentorship opportunities and other small business resources that you may find helpful.

Equipment Loans

Equipment loans are ideal if your business uses computers, cranes, POS systems, or other types of equipment.  Depending on the lender, you can fund up to 100% of the cost of new or used equipment. While equipment loans are relatively easy to get, they’re secured to the equipment. Therefore, if you fail to make your payments, the lender can seize the equipment. 

Invoice Factoring

Invoice factoring is when you sell your outstanding invoices to a factory company in exchange for a lump sum of cash. The factoring company will own your invoices and collect payment from your customers on your behalf. While invoice factoring offers fast cash, it can be expensive regardless of your credit standing. 

Resources for Pennsylvania Business Owners

Consider these resources to support your Pennsylvania-based business.
  • Pennsylvania Small Business Development Centers (Pennsylvania SBDCs): Pennsylvania SBDCs have been around since 1980 and offer consulting services and training programs to entrepreneurs throughout the state. These organizations also host a variety of in-person and virtual events.
  • PA Business One-Stop-Shop: Created by the governor in 2018, PA Business One-Stop-Shop serves as a guide for small business owners in Pennsylvania. You can use it to plan, register, run, and grow your business venture. 
  • Cultivate LancasterCultivate Lancaster offers network opportunities and resources to small business owners in the Lancaster, PA area. The organization also assists with financing. 
  • Ben Franklin Technology Partners: Ben Franklin Technology Partners supports early-stage technology companies and established manufacturers. It provides grants, mentorship, and a variety of business and technical resources. 

Conclusion: Meet Your Goals with Pennsylvania Business Loans

With small business loans in Pennsylvania, you can receive the capital you need to succeed with your business. However, compare the various options before you sign on the dotted line and move forward with a loan. This way, you can select the ideal loan for your unique goals.