Small business loans are an integral component of the business world. Business owners rely on them to invest in new equipment or supplies, cover payroll, or manage cash flow. With a small business loan, business owners and entrepreneurs can access a lump sum of cash or a line of credit, which they can use to remain operational and continue growing their business for years to come. The best small business loans have convenient application and funding processes, with competitive fees and flexible terms. Investopedia compared more than 20 of the top small business loan lenders based on their loan products, rates, fees, eligibility requirements, and overall transparency, among other factors. See our top-rated lenders below. Best Small Business Loans Best Small Business Loans Compare Loans FAQs Methodology Key Specs Why We Chose It We chose Lendio as one of the best loan comparison sites based on the fact that they let you compare loan options from more than 75 lenders in one place, more than other marketplace sites. You can also have your loan funded in as little as 24 hours, which can be a major boon for business owners who need cash fast. Pros & Cons Pros Compare loan offers from more than 75 lenders Funding in as little as 24 hours Small business loans, SBA loans, and business lines of credit available Cons Lendio does not lend money directly. Eligibility requirements vary, depending on the lender. Overview Lendio is a loan marketplace, so it won't be lending you funds directly, and we believe they shine in this category since they let you compare loan offers with more than 75 lenders in the small business space. Having the chance to have lenders compete for your business is the best way to make sure you get a small business loan with the best rate and terms you can possibly qualify for. Lendio was founded in 2011, yet it has grown dramatically since then. So far, they claim to have funded over 300,000 small business loans worth more than $12 billion, and they don't plan to stop anytime soon. In terms of their small business loan offering, Lendio lets you borrow between $25,000 and $500,000, depending on your needs. You can repay your loan over one to five years, and your interest rate could be as low as 4.5%. Lendio has just a 15-minute application process, and you can get a decision on the same business day, making it an efficient place to shop for a loan. Key Specs Why We Chose It We chose Kabbage as best for business checking thanks to its comprehensive package of tools for your small business, including a checking account and mobile app. Pros & Cons Pros Transparent qualification requirements No application fees Multiple small business loan options available Access to a mobile app Business checking available Cons You need to be in business for one year. You must have at least $4,200 in revenue each month (or $50,000 in annual revenue). Overview Founded in 2008, Kabbage is a technology company that aims to provide cash flow to businesses of all sizes. While many online companies focus on small business lending, we believe Kabbage stands out due to its plethora of small business loan options and its added features and benefits. Kabbage offers a variety of small business loans and options for a line of credit, including both unsecured and secured options. You can also apply for industry-specific loans for trucking, pawnshops, retail, and more. Kabbage prides itself on its easy online application process and fast funding for those who are approved. Loan amounts from Kabbage vary depending on the type of loan you apply for. Kabbage also offers business lines of credit up to $150,000 and online loans in amounts from $500 to $150,000. Other loan types might offer larger limits. Kabbage Funding also offers repayment terms of six and 12 months, depending on your needs. With Kabbage, there are no hidden loan fees or prepayment penalties, either. You will pay a monthly fee, but they are upfront about it. Key Specs Why We Chose It Fundbox focuses on offering lines of credit for business owners, and they make it possible to get prequalified online without a hard inquiry on your credit report. Their focus on business lines of credit makes them an expert on this particular type of small business funding. They offer decisions in minutes as well as funding as soon as the next business day. Pros & Cons Pros Get prequalified online without a hard inquiry on your credit report Get a decision in minutes Only borrow what you need, unlike a small business loan that offers a lump sum Cons Lines of credit are only available for up to $150,000. Overview We chose Fundbox as the lender offering the best revolving line of credit, which allows you to qualify for a specific amount and borrow only what you need. Fundbox was founded in 2013, and the company uses technology to facilitate its B2B lines of credit with the goal of helping small businesses achieve significant success. Lines of credit from Fundbox are only available in amounts up to $150,000, but you can get prequalified online without completing a full loan application. Once you apply, you can get a credit decision within minutes, and you’re under no obligation to accept the loan funds. Because Fundbox focuses on lines of credit, you get the chance to borrow only as much money as you need. Funds can transfer from your line of credit to your business checking account as soon as the next business day. This provider gives you the option to save money by paying off your balances early and ahead of schedule without any prepayment fees. Fundbox lets you see the fees for your line of credit upfront, and they’ll automatically debit your bank account to pay your amount due, so you won’t have to think about it. You get the option to repay your line of credit over 12 or 24 weeks. Key Specs Why We Chose It Kiva is the best option for small business owners who only need to borrow a small amount of money. Their microloans currently come with a 0% interest rate, and you can borrow up to $15,000. Pros & Cons Pros Borrow money with no interest Get the chance to market your product to a growing community of Kiva lenders, currently 1.6 million strong Repay your loan for up to 36 months Cons You can only borrow up to $15,000 with Kiva. It can take 30 days or longer for your loan to be funded. Overview We chose this lender as the best option for microloans based on the fact that you can borrow money at 0% APR and repay it over three full years. Founded in 2005, Kiva aims to help underserved communities and their members qualify for the small business funding they need to get their dreams off the ground. So far, 2.1 million Kiva lenders have funded more than $1.74 billion in loans to more than 4.3 million borrowers in 77 countries around the globe. Interestingly, Kiva is not a bank but is instead a peer-to-peer lending platform. Kiva loans are geared to disadvantaged entrepreneurs, so investors who lend money through the platform get the chance to help people around the world. In terms of their loan product, Kiva only lets you borrow up to $15,000. You can apply online in 20 to 30 minutes and earn the ability to advertise your funding project on their marketplace within 30 days; you get the chance to repay your loan over 36 months. Kiva also lists easy requirements to qualify, including living in the U.S. and being at least 18 years old. To qualify for a Kiva loan, you also have to agree to use your loan for business purposes only. Key Specs Why We Chose It We chose Fundera as the best option for Small Business Administration (SBA) loans due to the fact that it offers the most SBA options, including loans through the popular SBA 7(a) loan program. You can apply for an SBA loan directly on Fundera with your loan funded through a variety of top SBA lenders. Pros & Cons Pros Fundera offers an array of business loans and lines of credit, including loan offers through the SBA. Compare loan options through multiple lenders in one place Gauge your ability to qualify without a hard inquiry on your credit report Cons Fundera is a small business marketplace and not a direct lender, meaning the company won’t actually fund your loan itself. Credit score of at least 550 required Collateral required for some SBA loans and loan amounts Overview Fundera is an excellent option for consumers hoping to qualify for an SBA loan, mostly because it lets you fill out a single application and compare multiple SBA loan options in one place. Founded in 2013, Fundera is a loan marketplace instead of a direct lender. This means the company connects small business owners with the best small business loans and lines of credit on the market today, but it does not lend money itself. Because Fundera is a marketplace, it can offer nearly any type of business loan or line of credit available today. This includes loans through the Small Business Administration, which tend to come with flexible repayment terms and affordable interest rates. Loan amounts and repayment terms vary, but it’s possible to qualify for an SBA loan in amounts up to $5.5 million. You may also be able to repay your loan over a period of up to 25 years, although it can take two weeks to get your loan funded. Note that SBA loans may require collateral, and that’s especially true for larger loan amounts. Key Specs Why We Chose It We chose OnDeck due to the fact they offer small business loans with funding as soon as the same business day. This can be crucial for business owners who need fast access to cash to keep up with business expenses or pay for an important piece of equipment right away. Pros & Cons Pros Funding available as soon as the same business day Borrow up to $250,000 with a small business loan or up to $100,000 with a line of credit OnDeck is transparent about loan details and eligibility requirements. Cons Minimum personal credit score of 600 required Applicants need at least one year in business with a minimum of $100,000 in annual business revenue. Overview Since its founding in 2006, OnDeck has grown to become one of the most prominent small business lenders offering capital on the market today. We chose OnDeck as best for same-day funding due to its easy online application process and rapid approval and fulfillment of your small business loan. OnDeck makes it easy to qualify for a line of credit in amounts from $6,000 to $100,000 or a small business loan in amounts from $5,000 to $250,000. Repayment terms on small business loans are available for up to 24 months, and you will benefit from transparent pricing and no prepayment penalties. Meanwhile, you can repay one of OnDeck's lines of credit over 12 months, plus you get the benefit of borrowing only what you need. Either option can work for small business owners who need access to capital, and both types of funding let you apply and receive a decision within the day. OnDeck lists some basic requirements to qualify for a business loan, which include a minimum personal credit score of at least 600 for a long-term loan. You also need to be in business for at least two years and you need to have a least $250,000 in annual business revenue to qualify. A business loan is a type of loan business owners take out in order to access funds for inventory, payroll, and other business expenses. Business loans come in many different forms, although traditional small business loans tend to be offered in one lump sum and with a fixed monthly payment and interest rate. However, there are other types of funding available for small businesses. Lines of credit are a popular option since they let business owners borrow only what they need. Further, invoice factoring can be helpful for some business owners who are short on cash but have plenty of unpaid invoices to use as collateral. Small business owners can also apply for an SBA loan, which is a type of loan that is backed by the Small Business Administration. While the SBA does not loan money themselves, they connect borrowers with SBA-approved lenders that offer SBA-backed loans with competitive rates and terms. When applying for an SBA loan, you must provide an unlimited personal guarantee if you own 20% or more of the business. This means that if you fail to repay the loan because the business fails, you are still on the hook for repaying the entire loan amount. Also note that, in the case of a borrower defaulting, the lender can recover 50% to 85% of the outstanding loan balance from the SBA. Approved applicants can use their small business loan funds to pay for any ongoing expenses as well as payroll or investments in equipment or inventory. Small business loans are also frequently used as a means to manage or smooth out cash flow in times when expenses exceed income. If you’re a small business owner who needs to buy some equipment but you’re waiting to be paid by a few major clients, for example, it could help you keep up with your expenses and buy equipment while you wait for your invoices to be paid. Other popular uses of small business loans include raising capital to hire new staff or to launch a new marketing or ad campaign that could help boost revenue. We looked at more than 20 lenders who offer small business loans, small business lines of credit, and unique funding options like invoice factoring. We looked for lenders who offer transparency when it comes to their loan products and eligibility requirements, and we also looked for lenders who post fees and ongoing costs prominently on their websites. To find the best small business loans, we compared loan options and lenders to find companies with excellent ratings and user reviews on websites like Trustpilot. We also looked for lenders who offer high loan amounts and flexible repayment options, as well as the ability to apply and set up loan funding online. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Lendio. "Business Loan Types | Lendio." Kabbage. "Kabbage Funding Loans." Kiva. "How Kiva US works." Small Business Administration. "504 Loan Program - Small Business Administration." Small Business Administration. "Loan Fact Sheet - Small Business Administration."Best Lender Comparison Site : Lendio
Best for Business Checking : Kabbage
Best Revolving Line of Credit : Fundbox
Best for Microloans : Kiva
Best for SBA Loans : Fundera
Best for Same-Day Funding : OnDeck
Compare Small Business Loans
Lender Mobile App Best Perk Loan/LOC Amount Lendio
Best Lender Comparison SiteYes 24-hour funding $25,000-$500,000 Kabbage
Best for Business CheckingYes Business checking Up to $150,000 Fundbox
Best Revolving Line of CreditYes Decision in minutes Up to $150,000 Kiva
Best for MicroloansYes Zero percent interest Up to $15,000 Fundera
Best for SBA LoansNo Multiple offers Up to $5.5 million OnDeck
Best for Same-Day FundingYes Same-day funding Up to $250,000 for a loan; up to $100,000 for a line of credit Frequently Asked Questions
What Is a Business Loan?
Are You Personally Liable for an SBA Loan?
What Can I Use a Small Business Loan For?
Methodology
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FAQs
What is the best loan option for a small business? ›
Here are Bankrate's picks for the best small business loans:
- National Funding: Best for early payoff discounts.
- QuickBridge: Best for loan variety.
- Funding Circle: Best for flexible repayment terms.
- Fundbox: Best for startups.
- American Express Business Blueprint: Best for low revenue requirements.
What is an SBA Express loan? This term loan or line of credit offers fixed or variable SBA loan rates as well as the easiest SBA application process, quick approval times, flexible terms, and lower down payment requirements than conventional loans.
What is the average interest rate for a small business loan? ›Average business loan interest rates
| Business loan | Interest rate |
|---|---|
| Bank business loan | Average 7.85% to 8.79% APR* |
| Online business loan | 9.00% to 75.00% APR |
| Business lines of credit | Average 7.58% to 9.35% APR* |
| SBA loans | Fixed rate: 13.50% to 16.50% APR Variable rate: 11.50% to 15.00% APR |
6 days ago
Compare the best banks for business loans
| Bank | Notable feature | Loan amounts |
|---|---|---|
| JP Morgan Chase | Range of products for small businesses. | $5,000 - $5 million |
| Wells Fargo | Active SBA lender. | $5,000 - $5 million |
| U.S. Bank | Friendly to new businesses. | $5,000 - $5 million |
| Citibank | In-person service. | $5,000 - $10 million |
Jul 3, 2024
In 2024, there is expected growth in demand for working capital loans, which provide funding to cover day-to-day operational expenses like payroll, rent, utilities, inventory purchases, etc. – especially when cash flow may be tight due to seasonal fluctuations or unexpected challenges.
How much can I realistically get for a small business loan? ›How much of a business loan you can get depends on your business's annual gross sales, creditworthiness, current debts, the type of financing, and the chosen lender. In general, lenders will only provide loans up to 10% to 30% of your annual revenue to ensure you have the means for repayment.
What disqualifies you from an SBA loan? ›The most common reasons SBA loans are denied are poor credit, too much existing debt, or insufficient collateral. Other reasons include: Prior bankruptcy. Negative taxable income.
What credit score is needed to get a SBA loan? ›While there's no official required SBA loan minimum credit score from the Small Business Administration, lenders will often set minimum credit score requirements for both personal and business. An SBSS of 140 to 160+ or a personal score of 620 to 640+ are commonly needed to qualify.
What percent down do you need for an SBA loan? ›Do SBA loans require a down payment? Yes, the minimum SBA loan down payment requirement is 10% for 7(a) and 504 loans, although this amount can vary based on a business's cash flow and collateral. For example, weak cash flow or low-value collateral can increase the down payment requirement to 30% of the loan amount.
What is the current interest rate for a small business loan of $25000? ›SBA 7(a) fixed loan interest rates
| Loan amount | Fixed maximum allowable (with current 8.50% prime rate) |
|---|---|
| $0 to $25,000 | 16.50% |
| $25,000 to $50,000 | 15.50% |
| $50,000 to $250,000 | 14.50% |
| Over $250,000 | 13.50% |
Jun 28, 2024
What are the current SBA loan rates? ›
| SBA 7(a) (variable rates) | 10.75% to 13.25% |
|---|---|
| SBA 7(a) (fixed rates) | 13.5% to 16.5% |
| SBA Express loan rates | 12.75% to 14.75% |
| SBA CDC/504 loan rates | 6.597% to 7.063% |
| SBA Economic Injury Disaster Loan (EIDL) rates | 2.75% to 3.75% |
Jun 24, 2024
A down payment for an SBA 7(a) or 504 loan ranges from 10 percent to 20 percent. For loans from banks, credit unions and alternative lenders, you may see down payment requirements that range from 10 percent to 30 percent — and some lenders that don't require any down payment.
Which loan is best for a startup business? ›Best Startup Business Loans
- OnDeck – Best for Short-term.
- Lendio – Best for Lender Comparison.
- American Express® Business Line of Credit – Best for Lines of Credit.
- BlueVine – Best for Flexible Lines of Credit.
- Fundbox – Best for Quick Approvals.
- Biz2Credit – Best for Funding Options.
3 days ago
If you want the fastest option for small business funding, a business loan from an online lender may be the best option. These lenders require minimal documentation and use software to streamline the approval process.
What type of loan is best for a small business? ›SBA loan
SBA loans — loans backed by the U.S. Small Business Administration — are one of the most sought-after types of small business loans. Its different programs meet different business needs: 7(a) loans. These are good for businesses looking for working capital up to $5 million.
This could be equity finance – investment; debt finance – loans/overdrafts; grants. They may well be willing to help lend money to a new business starting up. This can be particularly good if they don't want any interest repaid on the loan that they make to you.
What is the most common small business loan? ›- Term loan. Term loans are the standard business loan option for both established businesses and startups. ...
- Line of credit. ...
- Merchant cash advance. ...
- Invoice factoring. ...
- Invoice financing. ...
- SBA loan. ...
- Microloan. ...
- Equipment financing.
4 days ago
It can be difficult to qualify for a small business loan. Lenders place many requirements on business loans, including minimum credit scores, annual revenues and time in business.