A business loan can be used for a variety of purposes, from covering your day-to-day expenses while waiting for clients to pay their invoices to investing in your business’ growth by buying real estate for a new office or hiring staff that will help you serve more customers.
There are a variety of options when it comes to small business financing, and there’s one for every type of business with every credit profile.
With so many options available, however, it can be daunting
to choose the right one. Which lender has the best reputation? Which offers the
lowest rate? It could take you weeks to research and find the right lender for
your business needs…or you can let us take care of the legwork. We’ve invested
a lot of time researching the best small business loan providers. Here’s the
criteria we looked at to rank lenders.
Sometimes you need a little money fast and know you can pay it back within a few weeks or months rather than taking years to pay off a loan. Fundbox offers short-term loans to businesses, as well as lines of credit. The application process is simple, and funds can be deposited in as little as one business day. Fundbox offers flexible terms and has no prepayment penalty.
Watch our Fundbox review video
Fundbox offers term loans and lines of credit of up to $150,000. The term loan is repaid over either 24 or 52 weeks, and the line of credit has repayment terms of 12 or 24 weeks.
Interest rates are 4.66% to 18%. To qualify for a small business loan with Fundbox, you will need to have a credit score of 600 or more, $100,000 or more in annual revenue, and be in business for six months or longer.
Amount | Repayment Terms | Interest | Requirements |
Up to $150k | Term loan: 24 or 52 weeks Line of credit: 12 or 24 weeks | 4.66-18% | Credit score: 600+ Revenue: $100k+ Time in business: 6 mo+ |
If you need money for your business now that you know you can pay back in a few weeks or months, Fundbox offers a suitable solution. With the option of either a term loan or line of credit, you can get the capital you need for your business quickly.
Learn more about Fundbox in our comprehensive review.
Some lenders only offer business loans of $100k or so, but if you need more, turn to Biz2Credit. With higher value loans available, as well as fast turnaround on application approval and funding, Biz2Credit offers businesses looking for a little more financing to grow an ideal solution. In addition to small business term loans, Biz2Credit also offers working capital loans and commercial real estate loans, so no matter what your financing needs are, this lender can help.
Biz2Credit offers term loans of $25k to $500k, with repayment terms of 36 months. Interest rates start at 7.99%. Applicants are paired with a funding specialist who can help you determine the best financing solution for your needs.
To qualify for a term loan, you will need to have a credit score of at least 660, as well as have annual revenues of $250,000 or more. Your business must also have been in operation for at least 18 months.
Amount | Repayment Terms | Interest | Requirements |
$25k-500k | 36 months | 7.99%+ | Credit score: 660+ Annual revenue: $250k+ Time in business: 18 mo+ |
If you’re looking for up to $500k and aren’t finding it with other lenders, explore what Biz2Credit has to offer. With multiple financing options, you’re sure to find a solution that fits your business.
Not sure what type of financing is best for your business? Fundera offers a wide range of options, including: term loans, lines of credit, SBA loans, equipment loans, invoice financing, credit cards. You can get access to offers from multiple lenders with one application. Once you submit your application, a Funding Advisor will contact you and help you determine which is the best for your business.
Term loans with Fundera lenders provide up to $600,000, with repayment periods of one to five years. Interest rates are 7-30%.
Requirements to qualify for a term loan vary from lender to lender. The lowest credit score accepted by some lenders is 500, with $50,000 in annual revenue. Some lenders require a business to be in operation at least six months, while most require a minimum of one year.
Amount | Repayment Terms | Interest | Requirements |
Up to $600k | 1-5 years | 7-30% | Credit score: 500+ Annual revenue: $50k+ Time in business: 6 mo+ |
If you like having options in terms of what sort of business financing you can choose, Fundera’s got many offerings to select from. And with a personal Funding Advisor at your disposal, you can ask all the questions you have to ensure you get the right solution for your needs.
Learn more about Fundera in our comprehensive review
If you or your business don’t have stellar credit scores, you might feel limited in your financing options. But with Fora Financial, that’s not an issue. Fora looks at other criteria, like how long your business has been in operation and how much you make in revenue, to determine eligibility. Fora doesn’t have many (if any) restrictions on what you must use your business loan for, as long as it’s for your company.
Fora Financial offers term loans up to $750,000, with a
72-hour turnaround time on applications. Repayment terms are up to 15 months,
with interest ranging from 10% to 30%.
To qualify, your business must be in operation for at least
six months. You must make at least $12,000 a month in revenues and have no
bankruptcies on your credit report. There are no requirements for credit
scores.
Amount | Repayment Terms | Interest | Requirements |
$5-750k | Up to 15 months | 10-30% | Credit score: n/a Monthly revenue: $12k Time in business: 6 mo+ |
Just because you have poor credit doesn’t mean you shouldn’t have access to quality small business loans. Fora Financial sees you as more than a credit score and can work with you to get the capital you need to grow your business.
Learn more about Fora Financial in our comprehensive review.
If you’re seriously investing in the growth of your business, you may need a sizeable loan that you can repay over several years, not months. Meet Credibly, a great lender for long-term business loans. While Credibly also offers SBA loans, lines of credit, merchant cash advances, invoice financing, and working capital loans, its long-term loans are the ideal solution for a business geared for growth like yours.
Credibly offers long-term loans up to $250,000, with
repayment periods of 18 to 24 months. Interest rates range from 8% to 25%.
To qualify for a long-term loan with Credibly, you will need
a credit score of 500 (that’s one of the lowest requirements a lender offers
for small business loans) and a minimum annual revenue of $180,000. Your
business must be in operation for at least six months, so startups can qualify.
Amount | Repayment Terms | Interest | Requirements |
Up to $250k | 18-24 months | 8-25% | Credit score: 500+ Annual revenue: $180k+ Time in business: 6 mo+ |
While some loans on this list have to be repaid within just a few months, Credibly lets you repay your loan of up to $250,000 over a couple of years, which gives you a little breathing room with your budget. And with lower credit requirements, you may qualify, even if you have poor credit.
Learn more about Credibly in our comprehensive review.
Sometimes you want to borrow a lump sum all at once, and other times, you need a little money now and a little later. In that case, a line of credit from BlueVine is worth exploring. Borrow what you need, then pay it back, then if you need more, you can borrow from the line again and again.
Watch our BlueVine review video
BlueVine offers lines of credit up to $250,000, with
repayment in either six or 12 months. You can choose either weekly or monthly
payments. Interest rates start at 4.8% and go up from there, depending on your
qualifications.
To qualify for a line of credit with BlueVine, you must have
a credit score of at least 625 and monthly revenues of $10,000 or more. Your
business must be in an eligible U.S. state: businesses in Nevada, North Dakota,
and South Dakota are not eligible. It must also be in operation for at least
six months.
Amount | Repayment Terms | Interest | Requirements |
Up to $250k | 6 or 12 months | Starts at 4.8% | Credit score: 625+ Monthly revenue: $10k+ Time in business: 6 mo+ |
If you aren’t sure how much money you need to borrow over time, a line of credit from BlueVine can be the flexible solution you seek. Take some money now and then more down the road when you need it.
Learn more about BlueVine in our comprehensive review
You might just want a lender that provides only small business loans…or you might like a lender that offers more. Kabbage, now owned by American Express, offers not only lines of credit but also interest checking and payment processing services. If the idea of bundling your financial services with one provider is appealing, check out Kabbage.
Watch our Kabbage review video
Kabbage offers a line of credit of $1,000 up to $150,000.
Each time you draw from your line, you must repay the money borrowed in six,
12, or 18 months, depending on your agreement. Interest rates vary, depending
on the repayment period:
To qualify, you must have a business that’s been in
operation for at least 12 months. You must also have a valid business checking
account and be 18 or older.
Amount | Repayment Terms | Interest | Requirements |
$1k-150k | 6, 12, or 18 months |
| Credit score: n/a Monthly revenue: n/a Time in business: 12 mo |
If you like the idea of an interest-bearing checking account (that earns 1.1%) and/or payment processing services, these are the icing on the cake with a Kabbage line of credit.
Startups are often limited in their options for financing, but at Torro, brand new businesses are welcome. Whether you need funds to develop an innovative business idea, get your office outfitted and ready for business, hire staff, or acquire another business, you can get the capital your startup needs with Torro. Torro is an alternative financial service provider that connects borrowers with lenders, which means you are spoiled for choice when it comes to financing options for your startup.
Watch our Fundera review video
Torro’s network of providers that offer startup loans
provide between $5,000 and $575,000. Loan terms are 12 to 48 months, and
interest rates can climb up to 36%.
To qualify, a business must be in operation for at least six
months, with revenues of $5,000 or more a month. Torro looks for a credit score
of at least 700.
Amount | Repayment Terms | Interest | Requirements |
$5k-575k | 12-48 months | Up to 36% | Credit score: 700 Monthly revenue: $5k Time in business: 6 mo |
If you’re getting turned down elsewhere for financing because your business is too new, Torro may be the solution for you. By connecting you to multiple lenders willing to work with startups, you will be able to choose the one that best fits your needs.
Who doesn’t want to build their credit? Unfortunately, not every business lender reports borrowers’ activity to credit bureaus, which means your payments aren’t…pun intended…giving you credit. OnDeck, however, does report to credit bureaus, which means if your credit score could use a little oomph, all you have to do is pay your term loan on time each month, and over time, you should see that score rise. And that being said, if you’ve got bad credit, you can still qualify for financing with OnDeck.
OnDeck provides both term loans and lines of credit. Its term
loans range from $5,000 up to $250,000, with repayment terms up to 24 months.
Lines of credit are available from $6,000 to $100,000, with a 12-month
repayment period.
To qualify for either option, you will need:
Amount | Repayment Terms | Interest | Requirements |
Loan: $5k-250k Line of credit: $6k-100k | Loan: up to 24 mo Line of credit: up to 12 mo | Loan: 11.98-46.06% Line of credit: 10.99-35.2% | Credit score: 600 Annual revenue: $100k Time in business: 1 year |
A loan should help you build credit, not lower it. Because OnDeck reports to credit bureaus, making your loan payment on time each month could boost your scores.
Most of the loans on this list are from alternative lenders and may come with higher interest, especially if you don’t have good credit. But if you do have good credit, why pay too much in interest? SmartBiz offers loans backed by the Small Business Administration, and these loans come with lower interest rates and favorable terms.
In addition to offering term loans, SmartBiz also offers two
types of loans through the SBA: 7(a) loans of $30,000 to $350,000, which can be
used for a variety of business expenses, and commercial real estate loans, of
$500,000 to $5 million. Both have repayment periods of 10 to 25 years. Here are
the interest rates:
To qualify for an SBA loan through SmartBiz, you must be in
business for at least two years and have a credit score of 650 for the 7(a) loan
or 675 for the real estate loan. You cannot have a bankruptcy or foreclosure on
your credit report over the last three years, nor any outstanding tax liens.
Amount | Repayment Terms | Interest | Requirements |
7(a): $30,000-350,000 Commercial real estate: $500,000-5 million | Both: 10-25 years | 7(a): 6.75-7.75% Commercial real estate: 5.50-6.75% | Credit score: 650-675 Monthly revenue: n/a Time in business: 2 years+ |
Loans backed by the SBA offer low rates and long repayment terms. If you qualify, SmartBiz can help you get low-cost financing to grow your business.
| Company | Max/Min Loan
|
Loan Rates | Special Requirements |
| Fundbox | Up to $150K | 4.66 - 8.99% | $100K+ in annual revenue, 6+ months in business |
| Biz2Credit | $25K - $6M |
Starting from 10% | $250K+ in annual revenue |
| Fundera | $5K-$5M | Varies | Varies based on the lender |
| Fora Financial | $5K-$750K | 1.1 to 1.3 factor rate | $12K in gross sales, 6+ months in business, no open bankruptcies |
| Credibly |
$5K-$400K | 8% - 25% | $15K+ average monthly bank deposits, 6+ months in business, and $50K+ in annual revenue |
| BlueVine | Up to $250K | 0.25 - 25% | $10,000+ in monthly revenue, and 6+ months in business |
| Kabbage | $1K-$150K | 9.00-36.00% | 12+ months in business, and, a valid business checking account |
| Torro | $3,000 / $575,000 | Varies | 680+ FICO credit score |
| OnDeck | $5k-250k | 11.98-46.06% | Credit score: 600 Annual revenue: $100k Time in business: 1 year |
A small business loan provides the capital your business
needs to pay expenses or invest in growth. You are given a lump sum of money,
which you repay over an agreed-upon period of time, with interest. A small business loan may be used to hire
employees, buy inventory, pay bills, or rent or buy a property. Each small
business lender may have certain requirements to qualify for financing, including
credit scores, time in business, and annual or monthly revenue.
There are actually several types of small business loans
available. Which you choose depends on your business needs.
Though the application process may vary a bit from lender to
lender, there are a few basic steps you can expect once you choose the right
lender for your business.
- Photo ID
- Social Security number
- Bank or accounting records
- Business licenses
- Business address
- Industry
- Annual revenues
- Time in business
- Personal details, including
address, Social Security number, income
- Amount you want to borrow
We’ve discussed online lenders in this article, but they’re
not your only option for small business financing. Both banks and credit unions
also offer small business loans and lines of credit, though their requirements
may be more stringent than with online lenders.
Banks and credit unions may offer both term loans as well as
SBA loans, though typically you must be in business for at least two years with
high credit scores to qualify.
For those who don’t meet these requirements, there are many
online lenders like the ones we’ve discussed here who look at other criteria
besides credit scores or time in business. The caveat is that you may pay more
in interest to get the financing you need.
Small business loans are available for almost any industry. The type of funding that's available may depend on your specific business type.
According to the 2021 Small Business Credit Survey, (Source: Small Business Credit Survey, Federal Reserve Banks), manufacturing companies led the way with receiving the full amount of financing sought. Retail businesses reported receiving funding the second most, followed by healthcare and education organizations and leisure and hospitality industry.
Manufacturing - 47%
Retail - 36%
Healthcare and education - 32%
Leisure and hospitality - 32%
(Source: Small Business Credit Survey, Federal Reserve Banks)
Your small business needs capital to thrive. Whether you
need money to get through a slow period or to expand your business by opening a
second location, there are financing options available. The good news is that
your credit score, if it’s not great, won’t keep you from getting the money you
need.
That being said, take the time to shop around because rates
and terms can vary wildly from one lender to the next. You want the loan with
the terms that best suit your business. Start with the list we’ve provided
here.
Kevin is an expert in banking, credit cards, car insurance, savings, checking accounts, and insurance.
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