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Phoenix Business Loans: Valley of the Sun Business Financing

Phoenix Business Funding

How companies engage with possible workers and structure, their workforce is partially due to the current trends that are shaping the business environment. With the influx of a new generation of workers comes a new business atmosphere that will undoubtedly contribute to many changes and advancements. Moreover, with establishments main concerns centering around labor, capital, and its customers, these are sure to be affected too. Therefore, Phoenix businesses have been focusing on their economic development, growth, advantages of their location, and the new workforce.

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To fully understand the workings of Phoenix companies, it is vital to understand the dynamics of how metropolitan regions are concerning the commercialization of new ideas and business models. As reported, Phoenix ranks as 11th on the list of 20 metro areas that have the highest average startup rates. Meaning, Phoenix has become an area for new and up and coming entrepreneurs that have been benefiting from the eager current leaders determined to form latest developments with the changing times. All across the valley, people are getting together to share ideas that will evoke innovation and develop new plans and thus, further companies. Seeing leaders come to form together new industries puts in place a robust entrepreneurial ecosystem that assists the formation of high-value sectors. Through coalitions like the #yesPHX, people have serviced themselves in providing resources to entrepreneurs and startups. Specifically, mentorship capital and a push to help reduce the mortality rate of emerging businesses. Leaders have also taken the initiative to market the Phoenix region as a destination for business growth and success along with pushing awareness of the tech advances entering into markets, in goals of becoming America’s first “smart region.”

There are also federal efforts taking place to continue pushing Phoenix businesses to the top. With the tax reforms and modernization of NAFTA (North American Free Trade Agreement), it is predicted to impact Arizona, and the business and economic climate positively. Within the last several years, Arizona has made many strategic changes to its tax system, resulting in a strengthening of the states overall competitiveness. The national tax reform paired with a NAFTA with todays economy sets Arizona up to be ahead of the game for business growth. Additionally, as a city in a border state they are already a top trading partner with Mexico, and bringing NAFTA in will significantly increase export-oriented jobs. Lastly, the valley is gearing up to further their economic growth with water. Public leaders of Arizona are making an effort to bring stakeholders together to ensure Arizona’s water security, including reliable access to the Colorado River and Lake Mead water levers for the future.

To expand on Arizona’s geographical advantages, their proximity to California and ports of entry to the United States, specifically the West Valley, perfectly reaps the benefits of businesses relocation from California as a result of a secure transportation network in this region. What creates the spine for economic development, critical investments in technology, water, and energy is infrastructure and have prepared the West Valley for not only one smart city but a collection of smart cities adding up to 3,000 square miles west of the 1-17. Further, there is an anticipated growth of forty-three percent over the next 25 years to occur in the West Valley; thus business and political leaders should pay close attention to the opportunities in the Phoenix area.

As for technology, Phoenix has seen a vast expansion in the East Valley, in particular, Chandler. It has been attracting high-tech and financial companies, and even autonomous vehicles. Technology aids in the ability to connect and initiates communication and has created an even stronger work environment for the city. Phoenix has also benefited from its variety of business sectors it has built. Everything from Aerospace and defense, bioscience and healthcare, to manufacturing—have all been critical to maintaining the diversity of Phoenix. In fact, these trades have been a part of adding an impressive number of new jobs. From 2012 to 2017 alone, business and financial services industries have added more than 13,000 jobs statewide, equally a growth rate of 38 percent. The diversity of employment has also positively contributed to the states overall decline in unemployment rates since 2007 further indicating Arizona’s economic strength.

To conclude, Phoenix also has partnerships such as the Greater Phoenix Chamber of Commerce, the City of Phoenix and Maricopa County that are dedicated to supporting Phoenix businesses expansion. It was designed to strengthen their regions overall competitiveness by connecting businesses to resources, influencing public policy, and gathering industry intelligence. There are also companies such as the ACA that recently launched a business plan committed to expanding technology within Arizona that are sure to benefit Phoenix businesses.

Types of Phoenix Loans

There are endless uses of financing for Phoenix Small businesses. The most common uses for financing include acquiring a Phoenix business, paying off or refinancing business debt, upgrades to facilities, expanding to new locations, marketing & advertising, inventory as well many other uses. Below we will take a look at the most common types of business financing for Phoenix small businesses.

Phoenix Term Loans

Term loans are clearly the most preferred type of financing for not only Phoenix small businesses, but all small businesses nationally. Term loans can be used for virtually any business use including purchasing a Phoenix business, consolidating and refinancing business debt, working capital as well as just about any other business need.

Rates 5-15%
Terms 1-30 years
Funding Amounts $50,000-$5,000,000
Collateral Required
Fees Medium costs

 

Phoenix Secured Line of Credit

There are two types of lines of credit: secured and unsecured. An unsecured LOC works a lot like a credit card in that you have access to preapproved funds (with a limit). As with a credit card, you only pay interest on the money you draw – not the overall amount you’re approved for. The line of credit is secured by business assets – most commonly accounts receivables.

Rates 5-15%
Terms 1-2 years
Funding Amounts $10,000-$5,000,000
Collateral A/R Required
Fees Medium costs

 

Phoenix Unsecured Line of Credit

Whereas a secured line of credit is collateralized with the business’s assets, an unsecured line of credit doesn’t require and business or personal collateral at all. But it does require the Phoenix small business owner to have exceptional credit and a strong history of not exposing themselves to high credit limits.

Rates 0% for 12 months
Terms 1-2 years
Funding Amounts $10,000-$500,000
Collateral Not be Required
Fees Medium costs

 

Phoenix SBA Loans

Many people hear the term “SBA loan” and assume that it’s a difficult process with never-ending amount of paperwork that takes many months to fund – but that’s not the case at all. In fact, an SBA loan can fund anywhere from 5-30 days depending on use. And while there is more paperwork and documentation required for an SBA loan than an alternative loan, the amount of paperwork really isn’t that time consuming.

Rates 5-8%
Terms 3-25 years
Funding Amounts $50,000-$5,000,000
Collateral Required
Fees Medium costs

 

Phoenix Alternative Loans

While alternative loans for Phoenix small businesses don’t have rates nearly as low as bank term loans or SBA financing, the rates are much lower than you’d expect to see from a merchant cash advance. While alternative loans have good rates and terms, they are relatively easy to qualify for (decent credit and cash flow) and will fund in the fraction of the time than conventional business loans.

Rates 10-25%
Terms 1-3 years
Funding Amounts $10,000-$500,000
Collateral Not Required
Fees Medium costs

 

Phoenix Equipment Leasing

There are multiple ways to acquire business equipment. A common form of equipment acquisition is simply a purchase of the equipment using available cash, or by getting a conventional or alternative loan. Another way for a Phoenix small business to obtain financing to get business equipment is to lease the equipment (which only requires a small down-payment).

Rates 7-25%
Terms 1-10 years
Funding Amounts $10,000-$500,000
Collateral Not Required
Fees Medium costs

 

Phoenix Asset Based Financing

There are many types of asset-based financing (including using business or personal real estate or inventory as collateral). But the most common form of asset-based financing comes in the form of a line of credit that’s collateralized by the small business’s receivables (called A/R financing). Another way an asset-based line of credit may be structured is not by using the receivables as collateral, but the actual sale of the accounts receivables to a funding company.

Rates 0.5-2.5%
Terms 1-3 years
Funding Amounts $250,000-$10,000,000
Collateral Required
Fees Medium costs

 

Phoenix Cash Advance

While a merchant cash advance is rarely a Phoenix company’s first choice for small business financing, it may come in handy if the Phoenix business has bad credit. While conventional financing requires good credit, a merchant cash advance funder will approve any credit (even bad credit) provided they have decent cash flow to the business’s bank accounts.

Factor rates 1.10 – 1.50
Terms 3-24 months
Funding Amounts $5,000-$2,000,000
Collateral Not required
Fees Low to High costs

Summary

These are only but a handful of the conventional and alternative business financing options for Phoenix small businesses seeking loans. The key is to inform yourself on the options available, and then shop around for the lender that provides the best rate. If you are a Phoenix business seeking financing and need help understanding your options, please reach-out to our financing specialists, and we’ll help you get the best financing available.

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About the author
Domonique Cox

Domonique is a Minnesota native that earned her bachelors from The University of Arizona with a degree in English and Film Studies. Though books and writing are not her only interest, you can find her engaging in nutritional sciences, environmentalism, vegan cuisine, filmmaking, old school dancing, tennis, running, sound engineering, and enjoying satirical dark comedies or listening to the poetic lyrics of Bob Dylan. She is now based in Los Angeles as a content writer for GUD Capital where she spends her spare time honing her writing and directing skills. 

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