The Best Business Loan And Financing Resources For Washington Small Businesses
Washington State is known both for its breathtaking typography and for being one of the biggest tech hubs in the nation (outside of Silicon Valley). With the Seattle metro area experiencing explosive growth, it’s a great time to be doing business in the Evergreen State. Of course, keeping a business running smoothly requires money — sometimes money that you don’t immediately have in hand.
Luckily, Washington is one of the easier states in which to get small business funding. It is well-served by lenders ranging from banks, to credit unions, to alternative online lenders.
We’ll take a look at some of the types of lending available to you in Washington state, as well as some specific lenders you may want to consider.
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The Best Online Business Lenders For Washington Businesses
Most online lenders operate nationwide, making them an option for the vast majority of businesses in the United States. Whether or not they’re the right option for you is another matter.
What online lenders offer is speed, convenience, and more lax lending standards than their traditional counterparts. As you might expect, online lending has a somewhat controversial reputation. The truth is there are online lenders with transparent processes and reasonable rates and there are predatory ones who will hide their fee structure and charge usurious rates. Weeding out the bad ones and honing in on the funders who can give you a good deal can be time-consuming.
Washington does regulate the maximum interest that can be charged on a “loan.” What this means for online lending is that lenders who depend on charging very high-interest rates may not offer some (or any) of their products within the Evergreen State. Note that regulations governing loans usually only apply specifically to loans and not to loan-like products like merchant cash advances.
LoanBuilder is a loan service offered by PayPal. With reasonable rates, customizable term lengths, and weekly payments, LoanBuilder is one of the better options in Washington state when you’re in the market for a short-term loan or similar product.
If you’re looking for something a little less traditional, it might be worth taking a look at BlueVine. BlueVine offers funding in the form of short-term lines of credit and invoice factoring. Invoice factoring lets you sell your invoices in advance for a small fee.
Washington may be known for hosting innovative businesses, but financing your risky business venture can be extremely challenging. Lending Point offers traditional installment loans in small amounts to individuals with good credit. This is great if you need a little more money to get things off the ground.
OnDeck is one of the bigger names in online lending, offering a mix of short-term loans and lines-of-credit to businesses that need money quickly. They’re willing to work with businesses with fair credit, while offering transparent and relatively reasonable terms.
If you’re new to the world of online lending, you may have a hard time narrowing down your options. Matchmaking services like Fundera can do that labor for you. You simply fill out one application and Fundera will try to pair you with one of their lending partners. Fundera isn’t the only matchmaking service out there, but there are a couple factors that help them stand out. The first is that there’s no direct fee for using the service (it’s paid by the partner you’re matched with). The second is that they carefully curate their lending partners.
Washington Banks & Credit Unions
Online lending might be shiny and new, but that doesn’t necessarily mean it’s your best option. Banks and credit unions still offer the best rates, provided you can meet their more stringent qualifications.
Where online lenders are largely unmoored from geography, banks and credit unions usually serve specific markets. Even large, national banks will typically require you to apply for business loans at a local branch. Many will also require you to be a checking/savings account customer as a condition of extending you credit.
If you have a good relationship with your local bank or credit union, be sure to inquire about their business products. National banks with branches in Washington include:
America’s biggest bank has a healthy presence in Washington State. Despite their size and market share, they’re still pretty traditional when it comes to business loans, so you’ll have to seek out a branch in your area.
If you can meet their requirements and don’t mind dealing with an enormous lender, Chase offers some of the best business loan rates out there.
• Must have excellent credit (high 600s)
• Must have access to a Chase Bank branch
|Read our Chase Bank review|
Widely considered one of the more small-business-friendly big banks, Wells Fargo also has one of the most modern application processes (as far as banks g0). If you need speed combined with traditional banking perks, or don’t have a branch nearby, take a look at what Wells Fargo can offer from a distance.
Just be aware that the bank has been plagued by scandals and poor earnings recently, so factor that into your risk calculations.
• Must have $1.50 in cash flow for every dollar borrowed.
• Must have a personal credit score of 640 or above.
|Read our Wells Fargo review|
US Bank is one of the smaller of the big national banks, with a reputation for being a bit more personable and flexible. Their branches are a little scarce in Washington once you get away from the I-5 corridor, however.
• Must be located in a state served by U.S. Bank
• Must have been in business for two years
|Read our U.S. Bank review|
If you’re looking for the absolute best rates on loans, it’s hard to beat credit unions. As non-profits, they can (at least in theory) offer perks to their members that wouldn’t be possible from an institution concerned about their bottom line. The downside of credit unions is that they tend to be extremely local, with limited branch presence. Though less common than in the past, some credit unions may have restrictions on who can join.
Credit unions offering business loans are uncommon, but many offer personal loans that can be used for smaller business expenses.
Some of the more accessible credit unions in Washington State include:
- Alaska USA Federal Credit Union
- Boeing Employees Federal Credit Union (BECU)
- First Technology Federal Credit Union
- OnPoint Community Credit Union
- Wings Financial Credit Union
Bad Credit? Your Best Options
According to conventional wisdom, if you have poor credit, you’re out of luck when it comes to financing. These days, that’s not really the case. While good credit will definitely make it easier to find funding, there are numerous lenders and financial products that are more concerned with your cash flow and business fundamentals than they are an abstract number.
If your credit is bad, consider:
- Online Lenders: The online lending industry grew in the ashes of the 2008 market crash, with many specializing in lending to businesses with good fundamentals but bad credit. Some of the lenders use predatory practices and should be avoided at all costs, but there are many that have established transparent and reasonable lending practices.
- Non-traditional Products: Loan products like invoice factoring aren’t very concerned about your credit history. If you’re in real estate, hard money is also an option, but keep the risks in mind.
- Credit Cards: This is not a loan per se, but one of the easier ways to build your credit back up is to get a credit card and pay it off every month. Even if you don’t qualify for the sexiest business credit cards out there, many companies are willing to extend small credit lines to risky customers. In the worst case scenario, there’re still secured credit cards.
What To Consider When Choosing A Lender
It’s easy to get into the mindset of having to make yourself look good to a potential lender. But make no mistake, you’re “buying” a product from them. It’s most important that they meet your needs and standards.
Here are some things to keep in mind when seeking a lender:
- Your Industry: Some lenders specialize in lending to specific industry. Others can’t or won’t lend to certain industries. If they can’t write you a loan, cross them off your list.
- Borrowing Amount: If you need $5,000, you’ll be looking at different lenders than if you need $5 million. Choose the right tool for the job.
- Rates & Fees: How much is it going to cost you? Are the lender’s rates in line with the industry standard? Do they tell you what additional fees they charge, or do they hide them?
- Time To Funding: Do you need the money right away or next quarter? Choose a lender that can work with your timetable.
- Term Lengths: You’ll want to know how quickly you have to pay the money you’re borrowing back. Make sure you can afford the loan over the long-term.
- The Type Of Expense Being Financed: Some financial products are limited in what they can be used for. Do you need a lump sum of cash? Or do you need a line of credit that you can draw upon periodically?
- Collateral: Secured loans and lines of credit require some form of collateral, usually in the form of an asset, real estate, or cash deposit. If you don’t have collateral to put it, you’ll want to look at unsecured loans.
Hopefully, we’ve helped you get a better sense of the funding options available to businesses in Washington State. Whether you’re just starting or expanding, there should be a lender out there who can fit your needs.
Just starting out? Check out our resources for startups.