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Small business loans let eligible business owners borrow funds to cover company-related purchases and operating expenses. Whether you’re just starting your business or trying to grow, the best small business loans can help you access the capital your business needs to thrive.
$5,000 to $250,000
1 year
600
OnDeck was founded in 2006 and has since been a leading provider in the business lending space, offering both term loans and lines of credit. Today, they have extended $14 billion in funding to small businesses.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan between $5,000 and $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Note: OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. What’s more, while it lends to over 700 industries, there are some industries it cannot serve.
Eligibility: Prospective borrowers must have a minimum personal credit score of 600 to qualify for an OnDeck term loan or line of credit. Additionally, their business must have been in operation for at least one year and have annual gross revenue of at least $100,000. Applicants must also have an open business checking account.
Turnaround time: You can apply and receive a decision from OnDeck on the same day. What’s more, approved borrowers also can have their funds in their bank account as early as the day they’re approved.
$500 to $5 million
6 months
560
$500 to $5 million
6 months
560
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. By filling out one application, Lendio is able to connect business owners to over 75 lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop-shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners, and it will help you find the best offer for your specific needs.
Eligibility: Minimum credit score requirements vary by loan product. You can qualify for financing with a score as low as 560; however, we recommend scores of at least 680 to receive the most favorable terms. Additionally, your business should have been in operation for at least six months to one year, depending on the type of loan you apply for.
Funding time: Applying through Lendio takes 15 minutes. After you review your offers and are approved by your lender, you can receive your funds in as little as 24 hours.
$6,000 to $250,000
6 months
600
BlueVine is a financial technology company that provides financing solutions to small businesses nationwide. It specifically specializes in business lines of credit and checking accounts. As of December 2021, BlueVine no longer offers invoice factoring as one of its financing methods.
Small business owners looking to access a line of credit on an as-needed basis can receive funds between $6,000 and $250,000. BlueVine offers two payment structures: Flex 6 or Flex 12. Customers who choose Flex 6 make weekly payments over 26 weeks while Flex 12 customers make monthly payments over 12 months. What’s more, after 45 days of payment on Flex 6, or 90 days of payment on Flex 12, you may be eligible for a credit line increase.
BlueVine also charges weekly or monthly fees for its line of credit. Standard pricing is 1.7% per week or 7% per month for line of credit draws.
Note: BlueVine’s line of credit is available in all 50 U.S. states except North and South Dakota.
Eligibility: Eligibility varies on the specific program a business owner chooses.
Flex 6:
Flex 12:
Turnaround time: After you submit your application, you can receive a decision as quickly as five minutes. If approved, you’ll receive your funds in your bank account within a few hours if you choose its $15 bank wire option. Choose its free ACH transfer option, and you’ll receive your funds within one to three business days.
$5,000 to $500,000
6 months
500
Most business financing lenders require good to excellent credit. However, National Funding targets applicants with bad credit, which is the reason we chose them. Prospective borrowers can qualify with National Funding with personal credit scores as low as 500.
National Funding offers working capital small business loans between $5,000 and $500,000 with terms of four months to two years, paid daily or weekly. Borrowers can use their funds for all working capital needs, including inventory, payroll, marketing, taxes and more. National Funding also offers equipment financing up to $150,000 but applicants must have a minimum personal credit score of 575 to qualify for that financing method.
Unlike most business lenders, National Funding offers early pay-off discounts. Small business loan customers who repay their total remaining balance in full within the first 100 days of the contract will automatically receive a 7% discount off the total remaining balance. Equipment financing customers who repay the total remaining balance early, at any point during the term, will automatically receive a 6% discount off the total remaining balance.
Eligibility: Prospective borrowers must have a minimum personal credit score of 500 to qualify for a National Funding small business loan and 575 to qualify for equipment financing. Their business must also have been in operation for at least six months. National Funding requires minimum gross annual sales of $150,000.
Funding time: Most of National Funding’s loans are funded within 24 hours of approval. However, this is subject to receipt of required documentation, underwriting guidelines and processing time by your bank.
$1,000 to $150,000
6 months
600
$1,000 to $150,000
6 months
600
Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.
Prospective borrowers have two business financing options through Fundbox. First, business owners can apply for a term loan up to $150,000 with repayment terms of 24 or 52 weeks. However, it’s currently in beta and is not available to all applicants. Second, owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.
Fundbox also offers its Insights Advantage program, which lets borrowers view their combined balances and cash flow predictions in one place when they connect multiple business bank accounts. It also sends alerts when Fundbox predicts that a borrower’s cash flow may fall below the set threshold.
Eligibility: Applicants must have a minimum personal credit score of 600 to qualify for financing through Fundbox. The applicant’s business must only be in operation for at least six months, making it a possible option for startups. However, businesses must have at least $100,000 in annual revenue.
Funding time: Whether you’re getting a term loan or line of credit, your funds transfer to your bank account as soon as the next business day.
$10,000 to $5 million
1 year
660
$10,000 to $5 million
1 year
660
Business owners can apply for traditional term loans and lines of credit, U.S. Small Business Administration (SBA) loans and even other products like credit cards and checking accounts through TD Bank.
TD Bank offers business loans between $10,000 and $1 million with terms ranging from one to five years. If you’d rather have access to a line of credit, it offers credit lines between $25,000 and $500,000. What’s more, TD Bank is an SBA-approved lender, meaning you can apply for an SBA through the bank. SBA loans typically have loan amounts of up to $5 million and terms up to 25 years.
The company also stands out for healthcare professionals and offers unique financing options for dentists, veterinarians, physicians and eye care professionals. For instance, it offers lending solutions up to $12 million with 100% practice financing plus working capital, in addition to partnership buy-ins and buy-outs, equipment purchase, and practice mergers and acquisitions.
Note: While online applications are available for loans up to $100,000, you must apply in person for loans over $100,000. TD Bank has branches in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington D.C.
Eligibility: To qualify, applicants must have a minimum personal credit score of 660. Their businesses must also have been in operation for at least one year. Generally, TD Bank is more difficult to qualify for compared to nonbank online lenders on this list.
Turnaround time: While TD Bank offers same-day approval for its business loans and lines of credit, it may take up to two business days to receive your funds. SBA Loans, on the other hand, may take several weeks to fund.
$25,000 to $500,000
2 years
660
$25,000 to $500,000
2 years
660
Funding Circle has been a direct lender specializing in small business loans since 2010. Since its inception, it has helped 100,000 businesses in 700 industries and lent $15.2 billion globally. We chose Funding Circle because it provides fast, affordable loans with a simple application process and funding in as little as 48 hours. Prospective borrowers have three options: business term loan, line of credit or SBA loan.
Funding Circle term loans range from $25,000 to $500,000 with repayment terms from six months to five years. If you choose to apply for a business line of credit, you can access credit lines between $6,000 and $100,000. However, Funding Circle doesn’t specify its line of credit repayment terms. You can also apply for SBA loans, which range from $25,000 to $500,000 with terms up to 10 years.
There are two main drawbacks of Funding Circle. First, there’s a one-time origination fee on each loan ranging from 3.49% to 6.99% of the approved loan amount. Second, due to state lending regulations, Funding Circle does not lend to businesses that operate out of Nevada, making it available in only 49 of the 50 U.S. states.
Eligibility: The minimum qualifications for a loan through Funding Circle are:
SBA loans, however, require two years in business, a minimum credit score of 650, a minimum annual revenue of at least $400,000, no current federal tax liens and that your business operates in one of the SBA’s eligible industries.
Turnaround time: Depending on the financing method you apply for, you can receive your funds within two to three days. However, SBA loans may take several weeks due to long underwriting turnaround times, which typically take up to three weeks.
$25,000 to $6 million
6 months
575
$25,000 to $6 million
6 months
575
Biz2Credit is a business financing lender that provides three loan options—term, working capital and commercial real estate (CRE) loans—ranging from $25,000 to $6 million. It only takes a few minutes to apply and, depending on the loan type, 24 hours to receive a decision.
Biz2Credit can connect business owners with working capital loans between $25,000 and $2 million and term loans between $25,000 to $500,000. Working capital loans are paid back with your business receipts through daily, weekly or bimonthly payments while term loans are repaid through weekly, bimonthly or monthly payments over the course of 12 to 36 months. Biz2Credit also offers CRE loans between $250,000 and $6 million with terms between 12 and 36 months; payments are due monthly.
In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “in the vast majority of cases, [it] will make a financing decision without referral to any external party.”
Eligibility: To qualify for a working capital loan, applicants must have a minimum personal credit score of 575, have been operating their business for at least six months and have annual revenue greater than $100,000. Term loans, on the other hand, require a minimum score of 660, 18 months in business and annual revenue greater than $250,000. CRE loans share the same minimum requirements as term loans but also require that prospective borrowers already own commercial property.
Funding time: Business owners can typically apply within four minutes, get a decision as fast as 24 hours and receive funds in 72 hours from approval. However, CRE loan approvals may take up to 30 days.
$1,000 to $150,000
1 year
640
$1,000 to $150,000
1 year
640
Kabbage from American Express launched Kabbage Funding in December 2021. With the backing of American Express, Kabbage is able to offer a broader set of cash flow management tools to small businesses.
Business owners can apply for business lines of credit through Kabbage between $1,000 and $150,000. Repayment terms range from six to 18 months.
We also confirmed with a Kabbage representative that customers are assigned monthly fees based on their eligibility and pay monthly fees if they carry a balance. Six-month term lines of credit charge fees between 0.25% to 3.50%; 12-month terms charge fees of 2.75%; and 18-month terms charge fees of 2.50%.
In addition to its line of credit, Kabbage provides other tools beneficial to small business owners, including an interest-bearing business checking account and its own mobile app that provides comprehensive cash flow insights.
Eligibility: To be eligible for financing through Kabbage, applicants must have a minimum personal credit score of 640, have been in business for at least one year and have a valid business checking account. Kabbage does not disclose minimum annual revenue requirements.
Funding time: Once you complete your loan application and sign the loan agreement, funds are sent to your verified bank account. Funds can take up to three business days to appear in your account, depending on your bank.
Consider these tips when comparing small business loans:
We reviewed 15 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the nine best lenders based on the weighting assigned to each category:
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
A small business loan is a source of funding business owners can access to cover the costs associated with operation and growth. Like personal loans, business owners can get small business loans through traditional banks and credit unions as well as online lenders—including those backed by the U.S. Small Business Administration (SBA). Depending on the type of loan, you can use funds for everything from working capital and equipment acquisition to larger purchases like real estate.
Small business loans help companies make large purchases and cover the cost of doing business. Loans generally are issued as a lump sum that can be used to make a specific purchase or manage cash flow and then repaid with interest. However, there are other types of small business loans—like lines of credit, merchant cash advances and invoice financing—that can be used to access cash more quickly and on an as-needed basis.
The best loan for a business depends on a number of factors, including its creditworthiness, how much it needs to borrow, what the funds will be used for and how quickly it needs access to loan proceeds.
In general, small business loans help businesses access the money they need to operate and grow. However, there are several types of small business loans, and it’s important to find the best fit for your needs.
SBA loans are small business loans that are guaranteed by the Small Business Administration, including the SBA 7(a), 504, CAPLines, Export, Microloan and Disaster loan programs. These loans typically range from $30,000 to $5 million and come with low interest rates and extended repayment terms—up to 25 years. That said, qualification requirements are more demanding than for other loans not backed by the government, and the application process typically takes longer.
Common types of SBA loans include:
Terms loans are a traditional form of financing that’s repaid over a set period of time. In general, short-term loans range from just three to 18 months, whereas long-term business loans may be extended for up to 10 years. While some term loans are designed for specific uses—like financing equipment or inventory—term loans traditionally can be used to fund most large business-related purchases. Business term loans are typically available up to around $500,000, and annual percentage rates (APRs) start around 9%.
Unlike a term loan that’s paid out in a lump sum, a business line of credit is a set amount of money that a business owner can access on a revolving basis. This means the borrower can draw against the line of credit for a set period of time—usually up to five years. If the borrower pays back a portion of the line of credit early, they can access it again until the draw period ends.
Once the draw period is over, the borrower enters the repayment period and can no longer access the revolving funds. Rather than pay interest on the entire amount, as with a term loan, a business owner who accesses a line of credit is only charged interest for what they actually use.
Lines of credit are a good option for businesses that want to access cash on an as-needed basis for things like unexpected expenses and other cash-flow issues. Borrowing limits generally range from $2,000 to $250,000 and come with APRs from 10% to 99%.
Invoice factoring is the process of selling a business’ outstanding invoices in exchange for a lump sum cash payment. Invoices are sold to a third-party factoring company at a discount, so you won’t get paid for invoices in full. And, once you sell an invoice to a factoring company, the factoring company assumes responsibility for collections.
However, this form of financing can be an effective way to access cash quickly without having to wait the 30 to 90 days customers usually have to pay invoices. For that reason, invoice factoring is a helpful strategy when you need short-term financing or help managing cash flow. In general, invoice financing amounts can extend up to $5 million with APRs between 10% and 79%.
Merchant cash advances (MCAs) let business owners access a lump sum of cash by giving the lender—often a merchant services company—a portion of future sales receipts. In contrast to a traditional business loan, a merchant cash advance and related fees are repaid from the business’ individual sales or through automatic clearing house (ACH) payments on a daily or weekly basis.
Under this strategy, a business owner borrows a set amount of cash at a factor rate usually between 1.2 and 1.5. To repay the loan, the business must repay the advance with a set percentage of daily credit card sales over an estimated repayment term. A merchant cash advance may be a good option for businesses that experience a high volume of sales and need to access cash quickly—without qualifying for a traditional business loan.
Equipment financing is a form of small business loan that helps businesses purchase the equipment and machinery needed to start and maintain operations. This flexible financing can typically be used for everything from office furniture and electronics to manufacturing equipment.
Equipment loans are collateralized by the items being purchased, so the size of a loan depends on the value of the equipment and the size of the down payment. However, the best equipment financing companies offer terms and limits of up to 25 years and $1 million or more.
Interest rates on equipment financing may be lower than available through other types of financing and typically range from 8% to 30%. As with other small business loans, rates vary by lender and borrower creditworthiness.
The business loan application and underwriting process varies by lender, but most banks and lenders follow the same general guidelines. To get a small business loan, expect to follow these general steps:
Related: Business Loan Requirements: How To Get The Financing You Need
Just as certain types of loans are more appropriate for certain businesses, some lenders may be better suited to your business than others. Consider these factors to choose a small business loan:
Small business loans are available from a variety of traditional banks and credit unions as well as online lenders. However, each lender is limited by its own financial products and lending requirements.
Traditional banks and credit unions typically offer a limited range of small business loans, including those backed by the SBA. While traditional banks often have tighter borrowing standards than online lenders, small business owners may still find it easier to qualify at an institution where they have an existing banking relationship.
Not only will the bank already have the business’ financial statements on file, but it may also be easier to get approved with a local lender who is familiar with your operation.
In general, online lenders may have more flexible borrower qualifications than larger, traditional banks. And, while APRs may be higher through online banks than traditional lenders, approval rates also are higher and borrowers are less likely to need collateral. What’s more, many online lenders provide faster funding speeds than their brick-and-mortar counterparts, making them a good option for businesses that need cash quickly.
Find the best business card for you & identify which factors matter for your business
Company | Company - Logo | Forbes Advisor Rating | Forbes Advisor Rating | Loan amounts | Time in business | Minimum credit score | Learn More CTA text | Learn more CTA below text | Learn More |
---|---|---|---|---|---|---|---|---|---|
OnDeck | 4.5 | $5,000 to $250,000 | 1 year | 600 | View More | Via Ondeck's Website | |||
Lendio | 4.5 | $500 to $5 million | 6 months | 560 | View More | ||||
BlueVine | 4.0 | $6,000 to $250,000 | 6 months | 600 | View More | ||||
Fundbox | 4.0 | $1,000 to $150,000 | 6 months | 600 | View More | ||||
TD Bank | 4.0 | $10,000 to $5 million | 1 year | 660 | View More | ||||
Funding Circle | 4.0 | $25,000 to $500,000 | 2 years | 660 | View More | ||||
National Funding | 4.0 | $5,000 to $500,000 | 6 months | 500 | View More | ||||
Biz2Credit | 4.0 | $25,000 to $2 million | 6 months | 575 | View More | ||||
Kabbage | 4.0 | $1,000 to $150,000 | 1 year | 640 | View More |
As with personal loans, it’s possible to get a small business loan with bad credit—scores as low as 580. However, you’ll have to demonstrate strong cash flow, and banks are more likely to require collateral to reduce the risk of lending. Small business borrowers with bad credit also qualify for less competitive rates and pay more in interest over the life of the loan. If you have a low credit score—under 580—an alternative option like invoice factoring may be your best bet.
There are a number of steps you can take if you’re denied a small business loan. First, try to find out why your application was denied. If your SBA loan application is denied, you’re entitled to a notice of denial that details the reasons; you may receive this directly from the SBA or from your lender.
If, instead, you are denied a small business loan through an online lender or other financial institution, contact them to find out why you were not approved. They may be able to provide insight into how to improve your future approval odds.
Once you know why your loan application was rejected, take steps to rectify the underlying issues. For example, you may need to improve your credit score, establish more consistent sales or reassess the amount you need to borrow.
When applying for a small business loan, expect to provide business bank statements, personal and/or business tax returns, business licenses and permits, proof of business registration and your business’ Employer Identification Number (EIN) or Federal Tax Identification Number (TIN).
To obtain financing for your business, you may also have to provide a business plan and copies of financial statements, including a profit and loss statement, balance sheet and cash flow statement. Likewise, expect to furnish information regarding current accounts receivable and accounts payable as well as the specifics of existing debt. Depending on your creditworthiness and the type of loan, you may also need to provide proof of collateral.
Kiah Treece is a licensed attorney and small business owner with experience in real estate and financing. Her focus is on demystifying debt to help individuals and business owners take control of their finances.
Jordan Tarver is the assistant editor for loans at Forbes Advisor. Before joining Forbes Advisor, Jordan was an editor and writer for multiple finance sites, focusing on loans, credit cards and bank accounts. His goal is to create actionable content that enables people to make sound personal financial decisions. When he is not working on personal finance content, Jordan is a self-help author and world traveler who helps people experience the world and discover themselves.