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Pennsylvania Small Business Loans: Best Local and Online Options

If you own and operate a small business in Pennsylvania, you may need some additional financing to help cover day-to-day operating expenses or expand your business. Below are many small business financing options, including local Pennsylvania loans, online small business loans, and grants.

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

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

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Making up an astounding 99.6% of all Pennsylvania-based businesses, small businesses play a crucial role in the state’s economy. Here, one million small businesses employ over 2.5 million workers, and the state offers valuable support for business owners through widely-available Pennsylvania small business loans

If you are an entrepreneur looking for additional financial resources, consider a multitude of state-based banks, private lenders, nonprofit organizations, and credit unions.

Top Pennsylvania Small Business Loan Options 

Below, you will find a list of local loan providers within Pennsylvania, along with the benefits of each loan, the loan amounts, rates, and any other useful features. These include banks, NGOs, and government institutions.

1. Pennsylvania Industrial Development Authority

Pennsylvania Industrial Development Authority, or PIDA, offers low-interest small business loans that are less expensive than bank loans. PIDA’s loan amounts start at less than $100,000 for capital purposes, and get bigger if the purpose is for machinery (up to $1.5 million) or construction (up to $2.25 million). The repayment period goes from three years to 15 years for the respective fields. 

PIDA can be a bit strict when it comes to giving out loans, so you’ll need sufficient collateral to qualify. PIDA has a 2% fixed interest rate for fifteen years or a 1% fixed rate for seven years.
 

2. Small Diverse Business Capital Access Program

The Small Diverse Business Capital Access Program (SDBCA) has a target market of entrepreneurs from minority groups, and you can have less than 100 employees to qualify. 

The maximum loan amount depends on what loan you're applying for. If you're applying for a line of credit, the amount will be up to $100,000, whereas if you're applying for a term loan, the amount will be up to $200,000. To start, you’ll have to get certified via the Pennsylvania Department of General Services as a minority group. SDBCA’s interest rate is 2% for the duration of the loan of small business owners.

3. Freedom Credit Union

Freedom Credit Union is a full-service financial institution founded in 1934. Credit unions typically offer better rates, charge less in fees, and have extra services than traditional banks do. The catch is that you’ll have to be a member of Freedom Credit Union.

Freedom Credit Union gives you three options, including term loans, business credit cards, and small business lines of credit. Loan amounts, rates, and fees are not listed on the website, so you’ll have to contact Freedom Credit Union directly if you are interested in applying.

4. Mid Penn Bank

Mid Penn Bank is great at working with smaller businesses to accompany their needs. specialize in agricultural loans, which means that if you're a farmer in Pennsylvania, you're in luck. 

But, you don’t have to be a farmer to qualify. Mid Penn Bank also offers commercial loans and lines of credit, commercial real estate loans, and SBA loans. Loan amounts, rates, and term lengths aren’t listed on the site, so you’ll have to reach out if you’re interested in applying for a small business loan with Mid Penn Bank.

5. Community First Fund and FINANTA

In 2020, FINANTA merged with Community First Fund, a Pennsylvania CDFI or Community Development Financial Institution. Community First Fund is an NGO dedicated to supporting development of affordable housing, creating educational opportunities, and providing financial assistance to job-creating businesses.

Applying for a loan from the Community First Fund will be highly beneficial for you if you're from a certain previously disadvantaged group, since most of their loans are given to finance these groups. If you’re investing in your community, there are also programs you can use. Loan amounts are less than $50,000 for startups, the interest rate is merely 1%, and there are no payments necessary for the first 10 months. This renowned NGO also provides training for entrepreneurs.

Summary Table

LoanFeaturesLoan amountInterest RatesRepayment Period
Pennsylvania Industrial Development AuthorityYou can get up to15 years for construction projects, and interest rates depend on the ever-changing market.

Up to $100,000 for capital purposes

Up to $1.5 million for machinery

Up to $2.25 million for construction

1% fixed interest rate for seven years

OR

2% fixed interest rate for fifteen years

Ranges from three years for smaller loans up to 15 years for large loan amounts

Small Diverse Business Capital Access Program


 

CEDO or

Certified Economic Development Organizationswill help you step-by-step through the application process and give you useful tips on how to proceed.

Up to $100,000 for a line of credit

Up to $200,000 for a term loan

2% fixed interest rate

Up to 15 years for construction or renovation projects and land or building acquisitions

Up to 10 years for equipment and machinery purchases

1 year for lines of credit

Freedom Credit Union


 

Unions like these have higher approval rates than bigger banks. They’re also more geared for the local market.Can vary depending on the loan typeCan vary depending on the loan typeCan vary depending on the loan type
Mid Penn BankMid Penn Bank makes credit available for businesses that can’t attain traditional financing. You have the option to receive this loan in a lump sum or arrears.Can vary depending on the loan typeCan vary depending on the loan typeCan vary depending on the loan type
Community First Fund and FINANTACFF and FINANTA have been recently working together, and they’re changing some methods to increase the impact they make on communities.Up to $50,000 for startupsMerely 1%Can vary, with no repayments necessary for the first 10 months

 

Top Online Pennsylvania Small Business Loan Options 

Online small business loans have become more popular over the last decade as banks have receded from giving out loans to small businesses. The lenders online often provide easier and faster access to small business loans than banks do, but at higher rates. Pennsylvania businesses should consider online loans if they get stuck at the bank. Here are the top providers of online business loans and why: 

1. Fundbox - Best for Pennsylvania Lines of Credit

Banner funbox

Fundbox is online fin-tech company providing lines of credit and small business loans to Pennsylvania-based entrepreneurs with no guarantees required. Through Fundbox, you can receive a quick and flexible line of credit or short-term loan up to $150,000. Having this financial resource can prove useful for short-term financing needs, such as unexpected cash shortages or purchasing inventory.

Pros
Fast funding times
No prepayment penalties
Option for a loan or line of credit
Cons
Relatively small credit limit
Terms are a maximum of 52 weeks
Interest rates may be high

Fundbox offers small business loans and lines of credit from $1,000 to $150,000, with repayments made weekly. Term loan repayment periods are 24 or 52 weeks, with rates starting at 8.33% for 24-week terms. Lines of credit repayment periods are 12 or 24 weeks, with rates starting at 4.66% for 12-week terms.

To qualify with Fundbox, you’ll need a minimum credit score of 600 and have $100,000 or more in annual revenues. You also need to be in business for at least six months prior to applying.

The Bottom Line

Fundbox has quick turn-around times, low minimum credit score requirements, and no hidden fees, so it’s easy to see why Fundbox is recommended above other online lending options.

Try Fundbox

Learn more about Fundbox in our comprehensive review.

2. Fundera - Best for Pennsylvania Startup Loans

banner_ Fundera

Fundera by NerdWallet connects small businesses to the most affordable loans across the country, and is also fast and convenient. Fundera also has personal advisors available to help business owners every step of the way, starting with the online application process.

Pros
Multiple lenders and loans available
Competitive rates
Soft credit check when applying
Cons
Unclear eligibility criteria
High rates may apply for poor credit scores

Since Fundera operates as both a direct lender and a loan marketplace, they’re able to offer a multitude of small business loans. They offer short-term business loans, business lines of credit, SBA loans, startup loans, equipment financing, and more. Term loans come with a maximum loan amount of $600,000, with repayment periods of one to five years. Startup loans cap out at $50,000, with terms up to six years.

When applying for a Pennsylvania small business loan through Fundera, you will need much less supporting documentation compared to conventional landers, and you can expect a much faster approval process. Requirements vary by lender and loan type, so you’ll have to apply in order to see what exactly you’d qualify for.


 

 

The Bottom Line

Fundera is your one-stop shop for small business lending needs. They connect you with a lender that will best match your needs to their qualification requirements. Applying is risk-free, meaning your credit score will not be affected during the application process, so it’s worth it to apply and see what your options are.

Try Fundera

Learn more about Fundera in our comprehensive review.

3. Ondeck - Best for Pennsylvania Term Loans

Banner Ondeck

Ondeck is an online small business loan provider that might be an excellent option for a younger company without a long track record. They offer both term loans and lines of credit up to $250,000, and you can use your loan on any business expense you need. 

Pros
Easy online application
Funding as soon as 24 hours from loan approval
Discount for repeat customers
Cons
Daily or weekly repayments
Not available in all states

OnDeck offers loans and lines of credit from $5,000 to $250,000, with repayment terms up to 24 months. They offer same day funding to qualified borrowers, benefits to paying your loan off early, and predictable payments made daily or weekly.

To qualify, you need to be in business for at least one year, have a minimum credit score of 600, and have $100,000 or more in annual revenues. OnDeck does not lend to Nevada, North Dakota, or South Dakota.


 

 

The Bottom Line

OnDeck is a solid option for Pennsylvania business owners due to their high borrowing amounts and fixed payment periods. If you’ve been in business for over one year and meet the revenue requirements, OnDeck is worth looking into.

Try Ondeck

Learn more about Ondeck in our comprehensive review.

Pennsylvania Small Business Grants

Beyond the Pennsylvania loan programs and the online lenders mentioned above, Pennsylvania also provides additional financial resources such as government offers or small business grants. The grants listed below include state grants, local grants, and national grants.

  • Small Business Advantage Grant offers up to $5,000 for Pennsylvania small businesses to purchase energy-efficient equipment.
  • Empowerment Zones will help you if your store location isn't in the best area to start initiatives in those affected areas.
  • Storefront Improvement Program helps Pennsylvania businesses improve and upgrade their storefronts. 
  • Amber Grant for Women awards two $10,000 grants each month to women small business owners. They also award two of the winners an additional $25,000 at the end of the year.
  • Pennsylvania GrantWatch allows you to keep an eye on upcoming grants so that you can find one that suits you best.

Other Resources for Pennsylvania Small Businesses

Beyond financial assistance, Pennsylvania also provides resources like access to coaching, mentorship, and networking with other business owners. The resources have been listed below:

  • Pennsylvania Business One-Stop Shop is your complete guide to owning and operating a business in Pennsylvania. They help you plan and execute your business goals, register your business, grow your business, and more. 
  • The Entrepreneur’s Guide is incredibly useful for business owners in Pennsylvania. It shares four keystones to business success, will help you with your growth strategy, and will help you write business plans to increase your chances of qualifying for a business loan. 
  • The Small Business Administration will connect you with funding options, including SBA loans, grants, and disaster assistance programs.
  • Pennsylvania Department of General Services shows you the certain perks you’ll receive when you have a diverse workforce, plus it provides tips on how you can create a more all-inclusive workforce.

How to Prepare for a Pennsylvania Small Business Loan

Here are the steps you need to take to ensure that you’re in the best position to qualify for an affordable loan in Pennsylvania:

  • Register your business. All businesses must be registered in order to buy or sell your services or products legally.
  • Consult a lawyer, accountant, and insurance agent. They’ll help you with the legal aspects of starting and running your business.
  • Create a business plan. This is where you will have to strategize and figure out the logistics, do your market research, and figure out all the costs involved with operating your business. 
  • Improve your credit score. Improving your credit score helps when applying for a loan so that you’ll be accepted more easily. You’ll also receive better rates on your loan with a higher credit score.

The Bottom Line

There are many options to choose from when looking for a small business loan in Pennsylvania. To get the best rates, we recommend starting with local lenders. Keep in mind, though, that funding times are typically longer through banks and credit unions than with online lenders. If you need capital quickly, we recommend one of the online lenders mentioned above. Applications typically take five minutes, and you can receive your funds within one day of loan approval.

About the Author

Tetiana Sitiugina-Babiuk

Written by: 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
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me

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