The Best Business Loan & Financing Resources For Arkansas Small Businesses

Arkansas is a great place to start a business, with its low cost of living and even lower cost of doing business—in fact, Arkansas’ cost of doing business is the lowest in the United States. Whether you have an established business in Central Arkansas’ vibrant Little Rock metro area, or are opening up shop in fast-growing Northwest Arkansas, the Natural State provides a lot of opportunities to make your business dreams a reality. However, most business owners struggle with accessing capital at some point, and Arkansas entrepreneurs are no exception. Read on to learn about the best business loans and financing opportunities for Arkansas small businesses.

Online Business Lenders For Arkansas Businesses

Online business loans are an important source of financing for many small businesses, and especially those that can’t qualify for a loan from a bank or credit union. As long as you have decent credit, strong cashflow, and 6–12 months in business, you should be able to find an online loan that meets your needs. However, there are also online loan options for startups and businesses with bad credit.

Generally, online loans have the advantage of being quick and easy to apply for, with a time-to-funding of a few days or less. They also have more relaxed borrower requirements when compared to a bank loan, with the caveat of having higher borrowing fees and rates than what you’d pay with a traditional bank loan. You will also have the repay the loan quickly—usually between 3 months and 3 years, depending on the loan.

While you might assume that you can apply for any online loan whose website you’re able to access, many online lenders only do business in certain states. As follows are some top-rated online loan options that offer loans to Arkansas small businesses.

Lendio

Lendio is a highly rated online loan marketplace where you can compare and apply to multiple online business loans that Lendio partners with. It’s a good place to start if you’re not sure which of the many types of business financing to apply for, or what financing you’re even eligible for. Luckily, Lendio operates in all 50 states and has options for both startups and established businesses.

Lendio even has offices in Northwest Arkansas (Bentonville) and an Arkansas-based lending consultant who can help you secure financing in this region.

SmartBiz

SmartBiz is an online lender that specializes in SBA (Small Business Administration) loans, serving all 50 states. If you meet the qualifications for an SBA loan, SmartBiz provides a relatively quick and easy way to apply for SBA-backed funds. The three types of SBA loan programs available for business owners include the 7(a) Loan Program, the CDC/504 Loan Program, and the Microloan Program. SmartBiz also offers non-SBA financing, including lines of credit and term loans.

Overall, SmartBiz is a good choice if you want to try to secure a low-interest SBA loan for an already-established Arkansas business.

Fundation

Fundation is another nationwide online lender that provides high-quality loans to Arkansas businesses, specifically term loans and lines of credit. Fundation is unsuited for startups and businesses with poor credit, but the borrower criteria aren’t as stringent as a traditional bank’s. Fundation’s rates are not as good as what you’d get with a bank loan or SBA loan, but they’re about as good as you can get from an online/alternative lender.

Established Arkansas businesses that don’t quite qualify for bank loans should see if they can get a good loan offer from Fundation.

OnDeck

OnDeck is the largest non-bank small business lender, financing businesses in all 50 states (and Canada). OnDeck’s short-term loans and lines of credit are accessible to businesses with lower credit scores, but not startups. Despite being such a large company, OnDeck actually has very accessible customer service to help you through the application and funding process. This is also one of the easiest lenders to apply to. OnDeck loans can carry high factor rates—a fixed fee charged on short-term loans in lieu of interest—but OnDeck’s rates are comparable to other short-term financing products for businesses that don’t qualify for bank financing.

OnDeck is an option for semi-established Arkansas businesses that need fast capital.

LoanBuilder

LoanBuilder is PayPal’s business loan arm, which offers short-term loans to businesses in all 50 states. The borrower criteria are fairly relaxed and you do not need to be a PayPal seller to qualify. LoanBuilder also offers a useful online tool which lets you customize your prospective loan offer, adjusting the loan amount and repayment schedule to see how your weekly payments would be affected. Another good thing about LoanBuilder loans is that there is no origination fee (a commonplace upfront fee charged by most short-term lenders). However, like OnDeck, these loans can have high factor rates.

LoanBuilder provides an easy means for newer and bad-credit Arkansas businesses to secure a short-term loan online. Plus, being associated with PayPal, you know they are not some shady fly-by-night short-term lender (which are sadly all too common on the internet).

LendingPoint

LendingPoint is a personal loan option for brand-new Arkansas startups with no time in business. LendingPoint does not lend to businesses in all 50 states, but fortunately, Arkansas is one of the states they do business in. Because these are personal loans, you do not need any particular business qualifications and you can use the loan’s proceeds for any purpose; the main consideration is your personal credit score. We think LendingPoint’s favorable online reputation is well-earned, with their excellent customer service and easy application process.

LendingPoint is suitable for Arkansas entrepreneurs who need a small amount of capital to get their startup off the ground, even if their business is still in the idea stage.

Banks & Credit Unions In Arkansas

While they are not as easy to apply for as online loans, bank and credit union loans generally provide the best-quality business loans with the lowest interest rates. Banks that offer SBA-backed loans can offer even better rates and longer terms. The downside is that bank loans are much harder to qualify for than online loans—you generally need very good credit and at least two years in business, and even then you still might not qualify. Nevertheless, established businesses with good credit should still at least see if they qualify for a loan from a bank/credit union.

U.S. Bank

A nationwide bank can be a viable option to finance your small business, provided that the bank has a strong presence in your region. Arkansas is among the 25 states U.S. Bank operates in, so you shouldn’t have difficulty finding a U.S. Bank branch in your city. U.S. Bank is one of the smaller big national banks, with the reputation of flexibility and personable customer service.

Bank of Arkansas

A local bank is another option for financing your small business. Bank of Arkansas has a good reputation in their state and they are a preferred SBA lender, which can mean a quicker approval time. In addition to SBA loans, Bank Of Arkansas also offers Arkansas small businesses revolving lines of credit and business credit cards—which can be another smart financing option for just about any business.

Arkansas Federal Credit Union

Credit unions don’t often offer small business loans, but when they do, they typically have very good rates. We don’t know their exact rates, but Arkansas Federal Credit Union, the largest credit union in Arkansas, seems to have a mostly favorable reputation online. They offer multiple business financing products, including:

• Working capital loans
• Revolving lines of credit
• Business credit cards
• Commercial real estate loans
• Loans for equipment, inventory, and accounts receivable

Bank OZK

Bank OZK, formerly Bank of the Ozarks, has been providing banking services to the people of Arkansas for over 115 years. They also have strong business loan services. Bank OZK is a preferred SBA lender, which makes the SBA loan process easier to navigate and quicker to close. With loan amounts ranging from $30,000 to $10,000,000, Bank OZK funds everything from small business startups to land acquisition for business expansion.

Nonprofit Lenders In Arkansas

You might be able to secure funding from a nonprofit lender if you do not qualify for a bank loan. Typically, nonprofit lenders only offer microloans of $50,000 or less, but this is not always the case. As follows are some nonprofit lenders that offer loans to Arkansas small businesses.

Accion

Accion is a nonprofit lender offering online loans to small businesses in all 50 states. In fact, it is the largest, nationwide, nonprofit-lending network in the United States. In particular, Accion funds women-owned businesses, minority-owned businesses, veteran-owned businesses, people with disabilities, and other underserved communities. They also provide small loans to startup businesses. Arkansas small businesses are served by Accion’s East Coast branch. Loan offerings and borrower qualifications (which are generally quite relaxed compared to most other lenders) vary by location; visit Accion’s site and enter your zip code to learn about the current SMB loan offerings in Arkansas.

Kiva

Kiva is an online nonprofit small business lender, offering crowdfunded microloans up to $10,000. Kiva loans require a little more work on your part, as you will have to create an online business profile with your business’s story, and also recruit a certain number of backers from your personal networks. If Kiva agrees to underwrite your loan and you can generate enough online interest to get enough backers to fund your loan, you will get a really good deal—all Kiva loans are 0% interest.

Learn more in our full Kiva Review.

LiftFund

LiftFund is a nonprofit SMB lender based in Texas, but they also serve several other southern states, including Arkansas, with offices in Little Rock and Helena, AK. This nonprofit will consider lending even to business owners with very poor credit, and they typically help small businesses that have limited access to traditional forms of credit. LiftFund’s services include small business loans up to $1 million and startup loans up to $50,000, as well as business and financial training.

Small Business Grants In Arkansas

Business grants are, unfortunately, few and far to come by. Free money to start or expand a business, from the government or elsewhere, is more myth than reality. With that said, there may be some government funds earmarked for very specific types of for-profit businesses. Usually, these are related to medical research, agriculture, green technology, or business development in economically struggling or rural areas. There are also some publicly and privately funded business grants available to veterans, women, and minority business owners.

Arkansas Economic Development Commission Grants

Arkansas Economic Development Commission provides some incentives for businesses in Arkansas, including grants and tax incentives. However, the grants awarded by the state are mostly limited to public schools, community buildings, fire stations, and other nonprofit entities. For larger companies looking to invest in Arkansas, such as large manufacturers, motion picture companies, corporate headquarters, or software manufacturers, AEDC has a program in which it shares the cost of project infrastructure needs by committing grants from state and federal infrastructure funds.

The AEDC also offers some tax incentives to job creators in Arkansas, including:

• The Tax Back program, which provides sales-and-use tax refunds on the purchase of building materials and taxable machinery and equipment to qualified businesses investing at least $100,000
• Advantage Arkansas, a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project, with wages greater than the lowest county average hourly wage (currently $11.60)

Generally, Arkansas state business grants and incentives are available to larger businesses looking to invest in the state, though some knowledge-based startup businesses in emerging technology sectors might also be eligible. You can find program eligibility guidelines on the AEDC website.

Grants.gov

At grants.gov, you can find a database of U.S. federal government grants that might be available to businesses in Arkansas. Again, most grant money is earmarked for nonprofit entities, though some very specific exceptions might exist, depending on the type and scale of your business.

SBA Grants

The U.S. Small Business Administration has several SMB grant programs, particularly for innovative tech companies and veterans, executed through partnerships with other entities. Some of these include Boots 2 Business, Federal and State Technology (FAST) grants, and Support of Competitive Research (SCORE) grants. You can find more information on these grant programs at SBA.gov under Funding Programs > Grants.

Amber Grants

Amber Grants is a non-government grant program for small businesses owned by women, including women-owned businesses in Arkansas (and nationwide). Each month, an Amber Grant of $10,000 is awarded to the top candidate. Amber Grants also awards a $25,000 grant to one of the 12 monthly recipients each year. You can apply for this grant on the Amber Grants website.

Loans & Resources For Startups In Arkansas

There are several Arkansas-based community entrepreneurship resources you might want to look into when seeking small business financing in the state. Some provide loans and grants to SMB owners, while others primarily offer training and mentorship.

Arkansas Small Business Association

The Arkansas district office of the U.S. Small Business Association is a federal resource that helps entrepreneurs plan, launch, manage, and grow their business through a variety of services. You can find SBA offices in Fayetteville and Little Rock.

Communities Unlimited

Communities Unlimited is an AK-based organization that helps promote entrepreneurship in seven southern states: Arkansas, Mississippi, Tennessee, Texas, Oklahoma, Louisiana, and Alabama. The main goal of this organization is to help entrepreneurs in poor, rural counties move from poverty to prosperity. Communities Unlimited provides SMB loans as well as training.

The Venture Center

The Venture Center is a Little Rock-based organization that provides mentorship, seed investment, and other services to help grow early-stage small businesses in Arkansas. Specifically, Venture Center is a resource for technology startups in Arkansas.

Innovate Arkansas

Innovate Arkansas is a state-funded initiative that helps grow commercially-promising technology ventures in Arkansas by providing acceleration, capital, and talent. Innovate Arkansas is funded by the Arkansas Economic Development Commission and administered by Winrock International.

What To Consider When Choosing A Lender

With all the options available to finance a small business, it can be difficult to decide among lenders, especially if you are approved for multiple different loan offers. But if you keep a few simple things in mind, you can weed out predatory lenders and choose the financing option that works best for you.

Can You Afford The Loan Payments?

The total amount you’re borrowing, as well as the interest and fees charged by the lender, determine how much you’ll pay for the loan in total. The repayment schedule (how often you make payments), along with the length of your loan term, will also determine the size of each loan payment. Before accepting a loan offer, it is essential that you know how much your payments will be and if you can reasonably afford them. For example, can you afford to make daily payments in the hundreds of dollars, or weekly payments in the thousands, starting immediately?

Some online lenders, such as LoanBuilder, offer a calculator that lets you tinker around and see how your borrowing amount and term length will affect your repayments. However, even if the lender doesn’t offer this sort of feature, it’s something you can figure out on your own. Using one of our small business loan calculators, you can plug in a few key pieces of information about your loan offer, and see how much your payments will be and how many cents on the dollar you’ll pay for your loan.

Can You Qualify For Something Better?

Faster and easier is not always better. You don’t want to accept the first loan offer you receive just because they say they can get the money to you in one business day. You also need to do your due diligence to make sure there aren’t any other, possibly better, options you might qualify for.

If the answer is no, this still doesn’t mean you should accept a loan offer that has a high interest rate or unfavorable repayment terms. There are also things you can do to make yourself more qualified to receive a better-priced loan, either from that same lender or a different lender. Namely, you can improve your credit score or wait until your business is more established before applying for financing. Before applying for loans, make sure you check your credit score and see if there is anything you can do to improve it, such as paying down existing debt.

In addition to improving your borrower qualifications, it’s also a good idea to apply for not just one but multiple loans using a free service like Lendio, so that you can make sure you’re choosing the best loan that you qualify for.

Final Thoughts

Arkansas is an awesome place to start a business, especially if you are based there already. The cost of doing business is uncommonly low, and the population is still growing, particularly in the metropolitan areas in Northwest, Northeast, and Central Arkansas. If you have an existing business, now is a good time to invest more capital into it so that you can keep it healthy and growing, just like your amazing home state. A lot of business owners are afraid to take on new debt, but it’s true that you need to have money to make money, especially if you want to take your business to new heights. With the proliferation of online lenders, and even online SBA loans and other low-cost financing options, there are more small business financing options than ever before.

If you are ready to take the plunge and apply for business financing, I strongly encourage you to check out the resources I’ve provided in this post. If have any further questions about any of the Arkansas business loans described, please leave me a comment and I’ll be sure to get back to you.