Last updated: November 2026
Tennessee's main state-backed loan program for small businesses is LendTN, part of Fund Tennessee, the state's share of the federal State Small Business Credit Initiative. LendTN is a $47 million program run through community development financial institutions (CDFIs) that make loans from $1,000 up to $5 million, on a rolling basis. A separate Small and Minority-Owned Business Assistance Program offers loans of up to $125,000 through regional lenders. Banks, SBA lenders, equipment lenders, factoring companies and merchant cash advance providers cover the rest, and the Tennessee SBDC offers free help getting ready.
Tennessee small business at a glance
The SBA Office of Advocacy's 2026 Tennessee profile counts 741,196 small businesses (99.5% of Tennessee businesses) employing 1.2 million people, 41.5% of the state's employees. Construction is the second-largest small business sector in Tennessee, with 85,179 firms, and transportation and warehousing has 70,180. Between March 2024 and March 2025, openings (23,579) trailed closings (27,953), a net loss of 4,374 establishments. In 2024, large banks reporting under the Community Reinvestment Act made $1.9 billion in new loans to Tennessee businesses with revenue of $1 million or less.
Fund Tennessee and LendTN
According to the Tennessee Department of Economic and Community Development (TNECD), Fund Tennessee launched in mid-2023 and is "currently deploying dollars and technical assistance throughout the state." Treasury approved Tennessee's plan on February 27, 2023, for up to $116.9 million. It has three parts:
- LendTN, the loan program, run through participating CDFIs;
- InvestTN, equity investment for early-stage start-ups through seed and growth funds;
- AssistTN, technical assistance, with the Tennessee SBDC as the designated partner.
How LendTN works for a borrower
You do not apply to the state. You apply to one of the participating CDFIs, which sets its own terms. The LendTN page lists the current participant lenders and the loan ranges and areas each one serves, from microloans starting at $1,000 in parts of the Cumberland Plateau to loans of up to $5 million statewide. Key points from its FAQ:
- a business may receive up to $5 million in SSBCI dollars, and no project may exceed $20 million in total;
- eligible uses include equipment, working capital, real estate and new businesses;
- there is no fixed deadline; lenders accept applications on a rolling basis;
- each lender has its own process, so timing depends on the loan type, use and amount.
TNECD is also recruiting more lenders. Its intent-to-participate window for non-depository CDFIs and minority depository institutions runs from October 30 to December 4, 2026, so the lender list may grow.
What a CDFI is
The U.S. Treasury's CDFI Fund supports community development financial institutions that "provide loans, investments, financial services and technical assistance to underserved populations and communities." For a borrower, that usually means a lender built for smaller loans and newer or underserved businesses, sometimes paired with advising. CDFIs still underwrite, so expect to show bank statements, tax returns and a repayment plan.
Small and Minority-Owned Business Assistance Program
Created by the Tennessee General Assembly in 2004, this program provides technical assistance and loans to Tennessee businesses with annual gross receipts under $4 million that lack reasonable access to traditional credit. Loans are made through designated lenders in each region. One of them, South Central Tennessee Development District, lists the program's loan criteria:
- a maximum loan of $125,000;
- an interest rate between 2% below and 2% above the Wall Street Journal Prime Rate;
- recommended terms of up to five years for equipment and three years for working capital, supplies and inventory;
- personal guarantees from all principal owners, and business and personal collateral may be taken;
- no real estate purchases.
With Prime at 7.00% as of November 2, 2026 (Federal Reserve H.15), that range is 5.00% to 9.00%. Ask the lender for your region about current availability.
Other funding options in Tennessee
| Option | Good for | Watch for |
|---|---|---|
| SBA 7(a) loan | Working capital, equipment, buying a business; up to $5 million | Paperwork and time |
| SBA 504 loan | Owner-occupied real estate and long-life equipment; $25,000 to $5.5 million | Not for working capital |
| Equipment financing | Construction machinery, trucks, trailers | Total cost over the term |
| Business line of credit | Covering payroll and materials between contractor draws | Renewal terms and fees |
| Invoice factoring | Carriers and B2B suppliers with slow-paying customers | Fees per period outstanding |
| Merchant cash advance | Short-term needs when cheaper options are closed | Not a loan; usually the most expensive |
SBA figures are from SBA's lender program comparison. Because construction and trucking are so large in Tennessee, see our guides to construction business funding and semi-truck financing.
Merchant cash advances in Tennessee
A merchant cash advance is a purchase of future receivables, not a loan. It is priced with a factor rate and repaid through daily or weekly remittances. Neighboring Georgia has a commercial-financing disclosure law (SB 90, signed in 2023), but we found no Tennessee statute of that kind as of this update. Get the amount you will receive after fees, the total payback and the payment schedule in writing, and use our guide to how much an MCA costs to estimate the annual cost.
Free help in Tennessee
- Tennessee SBDC: the Tennessee Small Business Development Center is TNECD's designated technical assistance partner for the SSBCI program and offers advising across the state.
- SBA: the Tennessee District Office in Nashville serves the entire state.
Frequently asked questions
How do I apply for a LendTN loan?
Contact a participating CDFI listed on the LendTN page, or fill in the LendTN interest form there. The lender decides the loan, the rate and the terms.
Is there a state loan for a small Tennessee business with revenue under $4 million?
The Small and Minority-Owned Business Assistance Program serves businesses with gross receipts under $4 million, with loans of up to $125,000 through regional lenders.
Does FSE work with Tennessee businesses?
Yes. FSE (Funding Solutions Experts) is an independent commercial finance brokerage that works with 50+ lending partners. It is paid by commission from those partners, never charges the business a fee and does not run a credit check to apply. Partners generally need at least 1 year in business and $10,000 or more in monthly revenue; each lender sets its own approval and terms.
If your Tennessee business meets those minimums, you can apply with FSE to compare offers from several lenders in one application.