June 28, 2022

How to Get a Small Business Loan in Tennessee

If you need capital to start or grow your business in the Volunteer State, rest assured that many financing options are available. This blog post will take a closer look at small business loans in Tennessee. 

How to Use Tennessee Business Loans

While owning a small business can be fulfilling and lucrative, it’s also costly. The good news is that small business loans in Tennessee can help you cover a variety of business expenses, such as: 
  • Startup fees
  • Commercial real estate
  • Equipment and machinery 
  • Inventory 
  • Payroll
  • Marketing
  • Insurance
  • Debt refinancing
  • Expansion costs
Not only are Tennessee small business loans flexible, but they can also build or improve your credit and provide you with fast cash that can come in handy during emergencies.

Types of Small Business Loans in Tennessee

There are a wide variety of small business loans in Tennessee. That’s why it’s essential to explore all of the options available to you. While some loans are easy to qualify for, others require good credit and sufficient revenue. These are the most common types of additional working capital.

Term Loans

Term loans are offered by banks, credit unions, and online lenders. Upon approval, you’ll receive a lump sum payment at once. You’ll pay back your loan over time through fixed monthly payments, ranging from a few years to several years. As long as you have a solid financial history, you may land low rates and favorable terms.

SBA Loans

Small Business Administration or SBA loans are partially guaranteed by the SBA and given by SBA-approved lenders. While the SBA doesn’t have hard and fast requirements, most borrowers have a minimum credit score of 620, a two-year track record, and earn $100,000 or more in annual revenue. With an SBA loan, you may qualify for up to $5 million in funding with repayment terms of up to 25 years.


If you need a small loan of up to $50,000, a microloan might be a good funding option. You can receive funding plus access to mentorship and resources. These loans are typically offered by mission-based nonprofits or government organizations, like the SBA or USDA. The SBA’s microloan program is for small businesses and certain not-for-profit childcare centers.

Business Credit Cards

Business credit cards are a lot like personal credit cards. You can use them to cover everyday expenses, like gas, office supplies, and utilities. Most business credit cards offer perks like a 0% APR intro period, cashback, and travel points. Before you take one out, determine if there’s an annual fee and do the math to ensure it’s worth it.

Lines of Credit

Like a credit card, a business line of credit is a flexible form of financing. Upon approval, you’ll be able to access funds at any time, up to a credit limit, which is based on your credit score. While lines of credit don’t offer rewards, they tend to come with lower interest rates and better terms than credit cards.

Merchant Cash Advance

A merchant cash advance (MCA) might be worth exploring if your customers pay you with debit or credit cards. It offers a lump sum of cash in exchange for a percentage of your credit sales.  Like invoice factoring, it’s easy to get and comes with flexible repayment terms. The downside, however, is that an MCA won’t help you build or improve your credit.

Invoice Factoring

Invoice factoring can allow you to sell your outstanding invoices to a factoring company at a discount in exchange for cash. Once a factoring company advances you up to 80% or 90% of your unpaid invoices, they’ll collect payments from your customers on your behalf. Then, they’ll distribute the remaining 20% or 10% factoring fees, which can be expensive. 

Valuable Resources for Tennessee Business Owners

If you own a small business in Tennessee, consider the following resources. 
  • Tennessee Small Business Development Center (SBDC)This organization offers virtual and in-person consulting services to entrepreneurs and startups. It also hosts a variety of in-person and virtual training sessions.
  • Launch TennesseeLaunch Tennessee works with Network Partners throughout the state to support entrepreneurs. You can use it to find training programs, workshops, and funding opportunities.
  •  Tennessee Entrepreneur Initiative (TEI): The TEI allows all types of organizations to sponsor entrepreneurs. Even if you don’t get sponsored, you can take advantage of weekly coaching, learning modules, and more.
  • Knoxville Entrepreneur Center: Knoxville Entrepreneur Center is a business accelerator that serves entrepreneurs in East Tennessee. It offers mentorship, classes, and events. 

Conclusion: Launch or Grow Your Venture with Tennessee Business Loans

Tennessee offers a supportive environment for entrepreneurs and small business owners. With small business loans in Tennessee, you can turn your dream of owning a successful business into a reality.