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Alabama Small Business Loans

Alabama small business owners occasionally need a little push to get them going or a boost to help them retain their momentum. That’s where an Alabama small business loan can come in handy. Whether you hope to open an additional location, hire some employees, or expand your product or services,...

Alabama Small Business Loans
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist

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In the state of Alabama, here are 390,000 small businesses in operation (almost 100% of Alabama-based businesses), generating over 750,000 jobs. Luckily, the state provides ample support to state-based businesses in the form of small business loans, grants, and non-financial assistance.

Top 3 Alabama Small Business Loan Options

Here is our choice of the top 3 small business lenders in Alabama.

1. West Alabama Bank

West Alabama Bank is a strong community-based bank that has been providing personal and business financial services since 1944. Today, the Bank has fourteen full-service branches across nine West Alabama counties.

West Alabama Bank understands that a timely cash infusion can make a big difference for a local small business. As such, they offer customized small business loan options, including:

  • Commercial real estate loans. West Alabama Bank has local knowledge and commercial real estate experience to help guide small business owners toward obtaining a commercial real estate loan to meet their needs. While the bank doesn’t disclose the specific terms and rates, they do mention that their terms are flexible, and interest rates - competitive.
  • Term business loans. Flexible term business loans are a great option to finance a variety of business needs, from equipment purchase and operating capital, to short-term payroll needs.
  • Construction loans. With a construction loan from West Alabama Bank, you can enjoy the terms customized for your project and make interest-only payments until the construction is complete.
  • Business lines of credit. Business lines of credit are a great option to accommodate seasonal slowdowns or make unexpected large purchases.
  • 2. First Bank of Alabama

    First Bank of Alabama has been providing financial services to Talladega, Alabama and the surrounding areas for over 170 years. The bank believes in creating a positive impact in the community and, therefore, offers a broad range of lending products to support local small businesses:

  • Working capital loans. The funds obtained through a working capital loan can be used toward virtually anything to get your business up and running. The repayment terms offered by First Bank of Alabama are customizable, meaning that you can structure the repayment plan to fit your budget and business needs.
  • Equipment financing. Equipment financing loans are intended to help small businesses to purchase new equipment necessary for successful business operations.
  • Business real estate loans. Flexible real estate loans from First Bank of Alabama provide a great opportunity for funding the purchase of new business premises.
  • Other types of loans. First Bank of Alabama also offers letters and lines of credit, as well as business loans specifically for facility construction and expansion.
  • 3. Regions Bank

    Regions Bank is another great option for local entrepreneurs looking for a small business loan in Alabama. As such, you can apply for:

  • Term loans. With a business term loan, you can expect to receive the funds as a single sum and repay a fixed amount each month.
  • Business lines of credit. With a line of credit, you can borrow funds up to a limit, repay, and then borrow again.
  • SBA loans. Regions Bank is a preferred SBA lender, meaning that they offer a variety of small business financing options intended to help small businesses grow and expand.
  • Equipment financing. Through Regions’ subsidiary Ascentium Capital, you can apply for equipment leasing or financing for purchases of technology, equipment, or commercial vehicles ranging between $10,000 and $500,000 in value. In addition, Regions Equipment Financing Corporation offers financing for transactions ranging between $250,000 and $50 million.
  • Summary Table

    Financial Institution

    Types of Small Business Loans Offered

    West Alabama Bank

    • Commercial real estate loans

    • Term business loans

    • Construction loans

    • Business lines of credit

    First Bank of Alabama

    • Working capital loans

    • Equipment financing

    • Business real estate loans

    • Letters and lines of credit

    • Facility construction and expansion

    Regions Bank

    • Term loans

    • Business lines of credit

    • SBA loans

    • Equipment financing

    Top 3 Online Alabama Small Business Loan Options

    An online loan is a straightforward and fast way to boost your business. This kind of loan is common to a diverse range of financial institutions, not only banks. Online lenders offer many credit solutions, like lines of credit, installment loans, and more. In this section, you’ll learn more about the most popular options out there.

    1. Biz2Credit


    Biz2Credit is an online lender known for its simple online application process and fast turnaround times, with the approval taking no longer than 72 hours.

    While the company is a great resource to obtain significant amounts of funds at reasonable prices, meeting the approval requirements can be challenging for newer businesses in the state of Alabama.

    Should you get approved, however, you can expect to receive up to $250,000 with a term loan or up to $6 million with a working capital or commercial real estate loan. The interest rates aren’t too high either, starting at as low as 8.99%.

    2. Credibly


    If you are looking for a reliable online lender with a lengthy track record, Credibly is well-worth considering. For over 10 years, the company has been offering small business loans to small- and medium-sized businesses in Alabama and beyond.

    The company believes that financing opportunities should be made available to a broad customer base. As such, Credibly’s loans come with relatively lenient eligibility criteria, with a minimum credit score of only 500. The online application process is fast and simple, and the dedicated customer support team is available to help you out should you have any questions.

    With Credibly, you can choose among seven different small business loan types, including SBA loans, long-term business expansion loans, merchant cash advances, lines of credit, and more. Among the most popular loan products is a working capital loan. Here, instead of paying interest rates, you would need to pay a specific lump sum as a percentage of the total loan amount.

    3. Fundera


    If you need a small business loan in Alabama but don’t have a lot of time to review all the available options, Fundera is a great choice to consider. The company is also a great option for small businesses that don’t have a long track record to back up their application.

    Keep in mind, however, that Fundera is not exactly a lender itself. Instead, the company introduces you to the various types of financing from other providers that you qualify for. So, if you apply for a loan through Fundera, the funding will come from a third-party lender, and you will still be subject to their own terms and conditions.

    Fundera works closely with established lenders throughout the U.S. and, therefore, is able to secure the best possible offers for the applicants.

    4. Fundbox


    Fundbox is one of the leading online loan providers. It requires fewer documents, and you only need a credit score above 500. Fundbox has some of the lowest small business loan requirements, which can be a crucial advantage for B2B or B2C businesses, small businesses, and even freelancers.

    The company also offers revolving lines of credit to be repaid in 12 or 24 weeks. Fundbox offers loans up to $150,000, which might not be enough, depending on your needs. Also, fees and taxes can be higher when compared with other institutions. Still, if you don’t qualify for other loans, a loan from Fundbox may be a great solution.

    Its invoice financing service can fund 100% of your invoice value, against the average of 80% or 90% of most financial institutions. Interest rates range between 4.66% and 8.9% for 12 weeks and 24 weeks repayments, respectively.

    Additional Alabama Small Business Financial Resources

    If banks and financial institutions turn you down, you still have a couple of options within the state. Keep in mind that companies must meet size standards to be eligible for Alabama small business loans. Size standards usually regard annual income, number of employees, and can also vary by industry. Here are some of the main financial resources available to Alabama small businesses:

    7(a) Loan Program

    It’s a multi-purpose business program that can help you get equipment, inventory, and working capital. SBA’s guarantees on this kind of loan can reach up to $5million, or 75% of your total loan amount. For loans under $150,000, guarantees can make up for 85% of the original loan amount. You can also choose between other specialized loan programs, such as the SBA Express Program, which offers faster processing for amounts under $350,000.

    Microloan Program

    This program offers loans up to $50,000 for equipment, supplies, furniture, and more. Borrowers who wouldn’t usually be eligible for loans in a regular institution can find support here. However, it can’t be used to pay for debts or buy real estate. This program also requires borrowers to undertake business-skill training before being accepted. This loan must be repaid within six years.

    8(a) Business Development Program

    This program was designed to promote the inclusion of those in social or economic disadvantage based on ethnicity. Small businesses accepted into this program receive support for nine years. Participants can enroll for up to $4million for services and acquisition of inventory, equipment, etc. Businesses enrolled in this program can also access the 7(a) Prequalification and Loan programs.

    Other Resources for Alabama Small Businesses

    The state and local governments of Alabama have a few more options for fledgling businesses. Further than money, they can offer guidance and support through four central departments:

    Alabama Department of Commerce

    Alabama Department of Commerce operates under direction of the Governor and focuses on the economic and workforce development within the state. As such, the organization provides local small businesses with the resources and information they need to succeed, from financial assistance to regular updates on regulatory issues. The organization also partners with numerous other groups throughout the state, all dedicated to support the growth and development of local small businesses.

    Alabama Small Business Development Center (SBDC)

    The Alabama SBDC provides state-based entrepreneurs and small businesses with much-needed support and expert advice. For example, the organization conducts regular webinars and hosts training sessions to help entrepreneurs learn how to get their business on the road to success. It also provides free confidential one-on-one assistance from a trusted SBDC Business Advisors.

    Alabama Microenterprise Network

    Microbusinesses are the largest segment of small businesses in the United States, and Alabama Microenterprise Network works to provide support and information to businesses and startups operating within this segment.

    This statewide nonprofit association works to promote public awareness on the positive impact that microbusinesses have on the Alabama state in particular and the country in general. In addition, it serves as a trusted resource for information related to microbusinesses.

    Alabama Department of Economic and Community Affairs (ADECA)

    The Alabama Department of Economic and Community Affairs is dedicated to creating a positive impact on Alabama communities by offering grant programs and funding opportunities for local initiatives that communities would not be able to afford on their own. This includes addressing critical infrastructure needs like sewer, water, and broadband; building new trails and recreational features; assisting with energy efficiency; and more.

    How to Prepare for an Alabama Small Business Loan

    If you want to know how to get a small business loan in Alabama, you should watch for the borrower requirements, as they may vary from one financial institution to another. Still, there are vital factors to consider in preparing for a loan application.

    For example, you should provide transparent information about your business goals. In addition, while not all lenders will ask for credit score reports, it’s advisable to improve yours because it improves your loan options. Here’s a shortlist of what you must have on hand before applying for a small business loan:

  • A business plan. A business plan is a detailed document describing your business objectives and how you are going to achieve them. In a nutshell, it presents a written roadmap from financial, marketing, and operational standpoints.
  • A loan checklist. Every lender and loan product comes with a specific checklist, which outlines the documents you need to provide to successfully apply for a loan. These documents can include your bank statements, personal identification, and more.
  • Borrower Information Form – 1919. When applying for an SBA loan, you need to fill out a special Borrower Information Form - 1919 and submit it to the SBA-participating lender.
  • Personal Financial Statement Form. A personal financial statement presents a snapshot of our personal financial position at a certain point in time. It lists your liabilities, your assets, and your net worth.
  • Bottom Line

    The state of Alabama is rich in financial and non-financial support for small businesses of all sizes, revenues, and credit scores. In addition, the state’s business environment is incredibly inclusive, with specialized assistance programs available for minority-owned businesses. From small business loans from Alabama-based banks and other traditional lenders, to business grants and mentorship from non-profit organizations, there is a variety of assistance available for those who search.

    About the Author

    Tetiana Sitiugina-Babiuk

    Tetiana Sitiugina-Babiuk

    Financial Sector Specialist and Content Strategist

    Independent writer, content strategist, and financial sector specialist. Tatiana has an extensive experience in working with financial institutions such as Bank of Canada and Risk Management unit at FinDev Canada. She holds an MA in Financial Risk Management from the University of Toronto.

    More about me

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