Business loan for app development

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With smartphones and digital platforms becoming the norm, many small and medium-sized businesses are turning to custom apps to serve their customers better, streamline operations, and stay competitive. But building a high-quality app doesn’t come cheap. Design, development, testing, and deployment all require upfront capital, and for many businesses, that kind of budget isn’t just sitting in the bank.

A business loan for app development can help fill the gap. Whether you’re launching a customer-facing mobile app or a custom internal platform, financing can give you the runway to build without delaying progress or stretching your resources thin.

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Can you get a loan to develop an app?

Yes, you can use an asset business loan to fund app development. In fact, many businesses finance tech projects just like they would equipment or marketing investments. As long as the app serves a legitimate business purpose (whether that’s generating revenue, improving efficiency, or enhancing customer engagement), it qualifies as a fundable expense in the eyes of most lenders.

Business loans can cover a wide range of development-related costs, including:

Research and strategy
UI/UX design
Frontend and backend development
Integrations with existing systems
App store deployment and marketing
Post-launch maintenance and updates

What loans are available for app development?

Several types of financing can be used to support app development. The right choice depends on your business’s stage, budget, and how quickly you need funds.

A term loan is one of the most straightforward options. You borrow a lump sum and repay it over a fixed period with interest. This model works well for funding a full build from start to finish, especially if you’re working with a single development firm or agency.
A business line of credit offers flexibility for phased projects. You can draw down funds as needed—useful if your app will be developed in stages or if you want to leave room in the budget for ongoing iterations.
For early-stage businesses or startups, SBA loans can offer more favorable terms, though they may take longer to secure and come with more documentation requirements.
Revenue-based financing may also be an option if you already have some sales and expect a boost once the app launches. In this model, repayments are tied to monthly revenue rather than a fixed schedule.

Some lenders offer technology-specific funding, which can include software development as part of a broader digital transformation initiative. These may be easier to qualify for if you already have a broader digital strategy in place.

What are the pros and cons of financing app development

There are several advantages and a few potential drawbacks to financing an app project. Today, we’re going to focus on four pros and four cons that can help you weigh whether taking out a loan is the right move for your business.

Pros

Preserves cash flow
Financing allows you to start development without draining your operating capital. This means you can continue to invest in other parts of the business (like staffing, marketing, or inventory) while building your app.
Enables faster time to market
With immediate access to funds, you can get your app built and launched faster. This is especially important in industries where timing and user demand are competitive advantages.
Supports higher-quality development
Instead of cutting corners to stay within a limited self-funded budget, financing can enable you to work with experienced developers, add robust features, and invest in user testing.
Opportunity for long-term ROI
A well-built app can increase customer engagement, unlock new revenue streams, or reduce operational inefficiencies—often more than justifying the cost of financing.

Cons

Interest and repayment obligations
Loans come with interest, which adds to the total cost of your project. If your app doesn’t generate revenue quickly, it could be a strain on cash flow in the short term.
No guaranteed return
Not every app succeeds. There’s a risk that the app won’t deliver the expected results, meaning the business is left repaying a loan without a matching financial benefit.
Time and resource commitments
Loan applications require documentation, financial reviews, and in some cases, detailed project plans. For small teams, this can take time away from core business activities.
Ongoing development needs
Building the app is just the start. Maintenance, updates, and user support often require additional investment. If the initial loan doesn’t account for these, you may need further financing later on.

What businesses could benefit from having an app?

Not every business needs an app, but for many, it can be a key differentiator. If your business depends on customer interaction, booking systems, digital content, or managing services at scale, an app could significantly improve efficiency and user experience.

Retailers can use apps for mobile shopping and loyalty programs.
Service-based businesses (like salons, fitness studios, or healthcare providers) can simplify scheduling and payments.
B2B firms may want internal apps to streamline operations or provide tools for their clients.
Restaurants can benefit from custom apps that handle ordering, delivery, or reservations.
Construction, logistics, or field service companies can build apps for project tracking and team communication.

Investing in an app is often worth considering if your business model involves frequent customer touchpoints, remote work coordination, or the opportunity for mobile-first sales.

How to apply for app development finance

Applying for a business loan for app development typically takes two to six weeks, depending on the lender and loan size. Having a clear plan in place can make the process more efficient and improve your chances of approval.

Start by outlining your app development goals. What is the purpose of the app? What features will it include? How will it support or grow the business? Next, put together a basic budget, including quotes from developers or agencies if available. This helps clarify how much funding you’ll need and where the money will go.

Then, review your business’s financial health—cash flow, revenue, existing debt, and credit history. Lenders will want to see that your business can manage loan repayments, even if app revenue takes time to develop. Once you’ve gathered your documentation, compare financing options. You can approach banks or online lenders or use a funding platform like Swoop to access multiple offers at once.

Submit your application with all required materials. If approved, review the terms carefully, especially repayment schedules and any restrictions on how the funds must be used.

Get started with Swoop

Developing an app can open new doors for your business, but financing it smartly is just as important as building it well. Swoop helps you find the right funding faster. Compare business loan options, get matched with lenders who understand your goals, and explore financing that fits your timeline and budget.

Register with Swoop today to check available business loans and start building your app with the support your business needs.