Bakery Financing: Best Business Loans to Consider in 2023

Lendzi ranks best for bakeries with high revenue and is also our top pick for overall lender. The company was founded in 2020 and is both a direct lender and a partner with more than 75 other lenders. This gives you, a bakery business owner, many loans and lenders to choose from. Lendzi specifically caters to those with bad credit or those who have been denied a loan elsewhere, so if that’s you, you may want to give Lendzi a chance to help secure the funding you need for your bakery business.

Main Features

Lendzi offers bakery business owners seven different loan products - including short- and long-term business loans, merchant cash advances, equipment financing, business lines of credit, SBA loans, and working capital loans. Merchant cash advances and working capital loans go up to $400,000 and are ideal for those with a credit score of 500-525 or higher. Equipment financing also requires a low credit score of just 550 and allows you to borrow up to $2 million in funding.

To qualify, Lendzi recommends $180,000 or more in annual income and at least six months of business history. After you apply, a Lendzi representative will contact you to review your loan options and discuss what you qualify for. This is a huge perk, as it gives you the chance to ask questions and get expert guidance on your loan of choice. 

Running a bakery requires ongoing, daily expenses in addition to updating machinery, renovating the space, or building a second location. All of these things add up, but luckily, there is funding available to meet your unique bakery needs. Backd was founded in 2018 and they tailor all of their loans to fit your specific business. No two businesses are alike; and no two loans should be, either.

Main Features

Backd offers bakery businesses working capital loans up to $2 million and business lines of credit up to $750,000. Payments are flexible, and no collateral is required. If you’re looking to expand your bakery or fund a one-time project, a working capital loan should suit your needs. If, on the other hand, you are wanting to have extra funds at your disposal at any time, we recommend a business line of credit.

To qualify, you need to be in business at least one year, have $200,000 or more in annual revenue, have a 640 or higher FICO score, be in business for at least 2 years, be based in the U.S., and have a business checking account.

National Funding’s equipment loans can help you cover the expensive equipment you need to run your bakery and serve your customers with the best baked goods. Depending on your finances, you may be able to lock in up to $150,000 to pay for ovens, mixers, bakeware, pastry blenders, and more.

Main Features

National Funding’s equipment loans go up to $150,000 with repayment terms between 2 and 5 years. The pay rate starts at 1.10 and you’ll repay your loan on a monthly basis. To qualify for an equipment loan, you’ll need a credit score of at least 600, at least 2 years of business history, $250,000 or more in annual revenue, and an equipment quote from a vendor.

SMB Compass offers a variety of business loans to bakery owners, making them a great option for those that know they need a loan, but aren’t sure what would be best for them. Common loans used by bakery owners and offered by SMB Compass include business term loans, business lines of credit, equipment financing, and invoice factoring. Customer service is excellent, and a representative will help you find the right loan for your business. To qualify for most loans, you’ll need a credit score of 650 or higher, $20,000 per month in revenue, and one year of business history.

Main Features

SMB Compass offers nine different types of small business loans to bakery owners. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.

Bakery owners looking to invest in a retail space to expand their business will appreciate the large loan amounts and fast funding time that Biz2Credit offers through its lending partners. However, Biz2Credit commercial real estate loan isn’t an option for new business owners.

Main Features

Biz2Credit offers commercial real estate loans to borrowers who typically have an existing property. You’ll need a minimum credit score of 660, 18 months in business, and over $250,000 in annual revenue to qualify. You can borrow between $250,000 and $6 million and repay your loan in 12 to 36 months. Rates start at 10%, and funding is available in a timely manner. Biz2Credit also offers working capital loans with varying terms and rates. You can get a working capital loan with a 575 credit score, 6 months in business, and an annual revenue over $250,000. The minimum borrowing amount is $25,000 and the maximum amount is $2 million-plus. Biz2Credit’s working capital loan offers daily, weekly, or biweekly payments. The lender also offers a term loan. However, you’ll need a score of at least 660 and at least 18 months in business, and an annual revenue over $250,000 for this business loan. The minimum borrowing amount is $25,000, and you can take out a maximum of $500,000. 

Some bakery owners may have ongoing expenses or cash flow issues for which a business line of credit would work perfectly. With Bluevine, you can borrow only what you need and pay it back at a low interest rate. Plus, you can get funding the same day. Bluevine also offers a business checking account.

Main Features

You’ll need at least 6 months in business, $10,000 in monthly revenue, and a 625 FICO score to qualify for a line of credit from Bluevine. You can be approved for up to a $250,000 credit line, which you can draw as much as you need from and repay in fixed payments over 6 or 12 months. Interest rates start at just 4.8% and there are no prepayment penalties, but keep in mind only the most creditworthy customers will qualify for the lowest rates.

Fora Financial offers short-term loans for small businesses that bakery owners might use to update equipment, deal with cash flow issues, or purchase inventory. Fora Financial also offers merchant cash advances, which can be helpful for business owners who plan to repay their loan from future bakery orders. 

Main Features

Fora Financial offers 2 products that would work well for bakery owners — a small business loan and a merchant cash advance.  With a small business loan, you can borrow anywhere from $5,000 to $750,000 with term lengths between four and 15 months and factor rates between 1.1 and 1.9. Merchant cash advances are available in the same amounts but are repaid through remittance of a percentage of your bakery’s credit card earnings. If you know you’ll have orders coming in soon but need cash in the meantime for any reason, Fora Financial could be the perfect solution for your bakery. You’ll need 6 months in business and no open bankruptcies for either option, plus a minimum of $5,000 in credit card sales for a merchant cash advance or $12,000 in credit card sales for a small business loan.