A small business loan can help your Florida-based small business take advantage of opportunities as well as navigate cash flow challenges. If you are starting or trying to grow your small business in Florida, you’ll want to understand the loan options available to help your business survive and thrive. 

How a loan can help your Florida small business

Florida has a thriving small business ecosystem. Popular for beautiful weather, a  large population of workers and low taxes, the State of Florida continues to win accolades as one of the best places to start a business in the U.S. As just one example, Forbes lists Florida as the second best state in the U.S. to start a business. 

In addition, thriving and growing cities such as Jacksonville, Tampa, Orlando and the Miami-Dade area continue to attract startups in a variety of industries. As a result, there are many lenders that want to finance businesses in the Sunshine State. 

Best small business loan options for Florida businesses

Ultimately, the best small business loan is one that gets your business the money it needs when it needs it. It should be affordable and help the business continue to grow. And of course, it should be one for which you qualify. Here are some of the best business loans for Florida businesses:

Small Business Administration (SBA) Loans

Most SBA loans (except SBA Disaster Loans) are made by lenders approved by the SBA to make them. There are several loan programs to choose from, but some of the most popular include 7(a) loans with a maximum loan amount of $5 million, and SBA 504 CDC loans which are used to finance expansion and/or equipment, including real estate that will primarily be occupied by the borrower. SBA microloans are small loans (up to $50,000) that may be available to disadvantaged businesses. These loans come with technical assistance to help the business succeed so it can repay the loan.  

Invoice Factoring

Does your business invoice other businesses? If so, you may be able to use invoice financing or invoice factoring to get the money your business needs. In both cases, those invoices will be the primary source of qualification. Some lenders may check the owner’s personal credit, but this type of financing does not usually require good credit scores. 

Equipment Loans

If you need to acquire or upgrade equipment in your business, equipment financing or equipment leasing may help. And if you own equipment outright, you may be able to get financing with the equipment serving as collateral. This type of financing can help preserve cash flow while still getting you the equipment you need to grow. 

Merchant Cash Advances

If your business does significant credit or debit card transactions, you may be able to get a merchant cash advance. With this type of financing, you get an advance against future sales based on previous sales history. It’s not an inexpensive form of financing, but it can be fast and easy to qualify. 

Crowdfunding 

Can’t qualify for traditional financing? You may be able to get financing through crowdfunding. Rewards-based crowdfunding allows you to get backers in exchange for rewards (such an early version of your new product) or through investors in your company. Crowdfunding does not require specific time in business, revenues or credit scores, making this an attractive source for startup costs as well as business expansion. But crowdfunding will require a great marketing campaign. 

Covid Relief Loans

Many businesses in Florida were able to access government relief loans due to the coronavirus pandemic. Forgivable loans through the Paycheck Protection Program (PPP) are ending, but there are still loans available through the Economic Injury Disaster Loan (EIDL) program. EIDL loans carry a 3.75% interest rate (2.75% for nonprofits) with a 30-year repayment term. You may apply for EIDL directly through the U.S. Small Business Administration at SBA.gov.

Pro tip: Get free help and mentoring for your Florida small business from the Florida SBDC network. Small Business Development Centers and other SBA resource partners such as SCORE or Women’s Business Centers can alert you to state or local assistance programs such as the bridge loan program designed to help Florida businesses impacted by the Covid-19 crisis, or other economic development loans. Find local assistance in Florida here.

How to get a small business loan in Florida

There are several ways to find and get a small business loan in Florida. Small business owners can apply through: 

• A bank or credit union. Loans from these financial institutions carry attractive terms but they tend to require good credit, at least two years in business and documented revenues.(You can check with local lenders to determine their requirements.
• A loan broker. A broker will work to match you to lenders. Brokers may vary in terms of experience and the size of their lending network. It’s also important to understand how they are compensated, as some sell high-priced, high-commission lending products. 
• An online lender. Some lenders offer a full or partial online application process. Online lenders typically process loan applications quickly, and can often pre-approve an application in a matter of minutes. Qualified applicants may get funded within hours or days. 
• A lending marketplace. An online small business loan marketplace combines the services of a broker— multiple lending options— with an online lender in terms of convenience. You supply information about your business and qualifications and then get matched to various lending options that are a fit based on your qualifications.

How to choose the right loan option for your Florida small business

Choosing the right loan option for your Florida small business involves understanding how you plan to use the funds, your qualifications, and how much you can afford to pay for the loan and still make money. 

If you need to borrow funds short-term (3-18 months) then consider options such as a: 

• Short-term line of credit, 
• Business credit card, 
• Invoice financing or factoring, 
• Merchant or business cash advance

 If you need to borrow money for longer term, you may want to consider a:

• Term loan,
• Equipment lease or financing, 
• Bank or SBA loan

What is the minimum credit score for a business loan?

Not all small business lenders and financing companies check the owner’s personal credit, but for those that do, a personal credit score of at least 680 will often be required. If your credit scores are low, though, that doesn’t mean you are out of luck. Some types of financing are based on revenues, rather than credit scores. And crowdfunding doesn’t require good credit. 

How to qualify for a small business loan in Florida

Most lenders are going to base a small business loan decision on one or more of these factors:

• Revenues. You must be able to demonstrate that your business can afford to repay the financing and strong revenues make the lender more comfortable with your ability to pay. 
• Credit. Your personal and/or business credit demonstrate to lenders whether you are willing to repay the financing they extend. If you’ve paid on time in the past, you’re also more likely to pay on time in the future. 
• Time in business. Many, though not all, lenders want to see your business has survived at least two years— or perhaps longer in the post-pandemic economy. 

If any of these factors are weak, others should be strong. For example, if your personal credit isn’t good, but your business has strong revenues and is well-established, you will still likely find some financing options available. 

What is the easiest type of business loan to get?

Some online lenders can approve loans in as little as hours, depending on the borrower’s qualifications. Businesses that have strong revenues may not need high personal credit scores to get certain types of financing, such as merchant cash advances or invoice factoring. Online lenders typically can make a decision almost immediately after the borrower submits their information. And lending marketplaces can help you find loans through multiple lenders based on your qualifications.