Small Business Loans in Hawaii

Hawaii has almost 45,000 businesses serving its population of 1.5 million people. With such a discrepancy between the two data points, it’s no surprise that Hawaii ranks 8th out of 50 on the United State’s Economic Growth Rank. 

Between Hawaii residents and the millions of tourists visiting the state annually, business owners will have no shortage of customers. However, having more clients doesn’t necessarily translate to being a strong business, especially if you’re dealing with cash flow or supply chain issues.

Not having enough money to manage your operations can stunt your growth and give your competition an opportunity to outpace you. Savvy entrepreneurs who find themselves in this position often secure small business loans to support their growth, which allows them to secure the funds they need promptly.

Securing small business loans in Hawaii may sound easy, but it’s a complicated process that you’ll have to dedicate time and effort to. Despite the complexities, it’s never been a better time to access capital. 

Between banks, credit unions, online lenders, and FinTech marketplaces, you’ll have multiple options at your disposal. But first, you’ll need to know what you’re looking for, what kind of capital you’ll borrow, and what kind of terms your business will be able to repay the funds. 

Here are a few options for small business loans in Hawaii:

• Term Loans
• SBA Loans
• Business Lines of Credit
• Equipment Financing
• Merchant Cash Advances

The benefits of your financing depend on many factors, including the lender you’re dealing with and your business’s financial information. You’ll need to take the time to search for a lender with favorable terms, or you can streamline your search for capital through a marketplace, like National Business Capital.

Understand Your Business Needs

First, you need to thoroughly review your business’s financials to determine areas that you can improve with additional funds. This will give you a unique opportunity to identify areas of your business that aren’t operating at full capacity or need to be revisited, helping you avoid simply “throwing money” at a problem rather than solving the root cause.

How much can you afford to pay each month on your financing? Do you need more capital than you originally thought? These are important questions, ones that can prevent a serious headache later down the line.

Search for Lenders

Your next step to securing small business financing Hawaii is to find a lender with terms that fit the needs of your business.

Your first stop will likely be the bank or credit union you do business with. These lending institutions tend to feature low-interest rates and favorable repayment terms, but the eligibility guidelines are often strict. 

You’ll need to have:

• A high credit score
• Lengthy time in business
• Substantial annual revenue
• A good financial history

And even then, you might not reach approval because of the industry you operate within. 

If your bank or credit union can’t help, your next stop is online lenders. These entities are almost the opposite of banks and credit unions. They’re characterized by high-interest rates and loose eligibility requirements. 

Online lenders tend to finance most businesses that banks refuse to, giving the entrepreneurs who’ve been turned down by their banks an avenue toward growth. Regardless of the lender you’re dealing with, you’ll have to have all of your financial information ready for them to review. 

Your business bank statements, credit reports, and other financial information will almost definitely need to be reviewed, so make sure they’re readily available as you go throughout the process.

Compare and Contrast Lenders

Once you’ve spoken with a few lenders and discovered the rates and terms behind their financing products, it’s time to compare their programs. Which one has the most favorable interest rate? Does one have better repayment terms than another?

Be careful not to opt into terms outside of your business’s capabilities. Some entrepreneurs choose to forgo the longer repayment terms because they think they can save money by paying off the loan sooner, but they run the risk of overwhelming the capability of their operation.

You’ll also have to consider the collateral requirements of each lender. Some may require an offering of collateral to secure your financing, whereas others might not see your organization as inherently risky and won’t require it. 

Either way, you’ll need to carefully consider all your options before making a final decision, but the process takes time. Many business owners don’t have that spare minute to compare and contrast lenders, so they’ll team up with National to have our team do the heavy lifting for them. 

At National, our experienced Business Finance Advisors take the guesswork out of business financing. We learn about you, your business, and the challenges you face to connect your organization with best-fit financing solutions to streamline your growth. You won’t have to spend hours researching lenders and seeing if they’re a good fit for your business because we’ve already done that, allowing you to get back to what matters most—your business.

Here are a few Hawaii-specific small business loans that you can leverage to support your business’s growth:

The Mālama Loan Program: Otherwise known as the Native Hawaiian Revolving Loan Fund or the NHRLF, The Mālama Loan Program helps native Hawaiian business owners secure the capital they need to manage their expenses and afford new opportunities. The program is a piece of a much larger initiative to create jobs, support small businesses, and promote social/economic well-being across the state.

Hawaii National Bank: Hawaii’s National Bank offers financing options to small businesses around the state. They offer term loans, business lines of credit, merchant advances, and much more, but their eligibility requirements mirror those of traditional banks.

Hawaii USA Federal Credit Union: This SBA-affiliated organization offers financing and financial education to business owners and entrepreneurs across Hawaii. They work with your business to find a solution to your challenges, but, much like the previous opportunity, their qualifications are strict.

Whether you’re located in Honolulu, Hilo, or Lahaina, you can use any of these programs to grow your business and serve your customers at increased efficiency. However, if these options won’t work for your specific circumstances, you can also secure traditional financing options from other lenders, such as:

Term Loans

Term loans are one-time lump sum payments that you must repay within the terms outlined by your lender. These are one of the most common types of Hawaii small business loans used by entrepreneurs because of the flexibility in terms of use. 

However, while you can use a term loan for almost any business purpose, you’ll likely have to give a detailed plan of how you intend to use the borrowed funds to your lender. This may seem like an unnecessary step at first, but in reality, it’s an opportunity to sit down and plan how you’ll use your financing, which you may not get otherwise.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate to 6%

Ideal for

One-off purchases or investments, when you know exactly how much a project will cost, long-term financing needs

Business Line of Credit

While this option might sound similar to a business credit card, the two are actually very different. Business lines of credit are revolving lines of credit that you can draw from whenever you need capital. When you repay the borrowed amount, you can draw on the same funds again, allowing you to stay proactive against challenges and unforeseen expenses. 

Business credit cards won’t allow you to draw physical cash, but business lines of credit allow you to do just that. With extra cash on hand, you’ll always be one step ahead and, most importantly, you’ll always be prepared to grow.

Term length

Revolving

Interest rates

Starting at the prime rate to 6%

Ideal for

Ongoing purchases or investments, flexibility, when you don’t know the exact cost of a project, long-term financing

SBA Loans

SBA-associated lenders can offer SBA loans, which feature high borrowing limits and some of the most competitive interest rates on the market. However, SBA loans feature strict eligibility requirements, preventing business owners with less than favorable financials from reaching approval. 

The eligibility criteria shouldn’t deter you from applying, though. If you have the time, you may want to consider proactively strengthening your credit score to make your organization more appealing to lenders. But, of course, that’s if you can afford to wait for your financing, which many entrepreneurs can’t do.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate 

Ideal for

Borrowers with good credit

Searching for small business financing in Hawaii is much more complicated than it seems. You’ll need to put time and effort into your search, which many business owners can’t afford as they manage the day-to-day operations of your business.

Rather than take your attention away from your daily operations, you can team up with National Business Capital’s experienced team and have them do the heavy lifting for you. 

Our Business Finance Advisors leverage a 75+ lender marketplace to connect entrepreneurs with financing options to help them grow and scale fast. We genuinely care about your business and how it’ll perform after we’ve secured your deal, so we’ll do everything we can to find a lender with favorable terms that match your needs and circumstances.

Most importantly, we’re happy to help, and every member of our team is there to answer any questions you may have.

Ready to get started? Complete our digital, streamlined application to kickstart your search for small business loans in Hawaii and take the first step towards growing your business.