Updated on

Best Small Business Loans to Consider in 2023

Whether you're looking to expand your operations or need extra cash flow, our experts have compiled a list of the best loans available for your small business to help you achieve your goals. Browse through our selection and find the perfect loan that suits your needs.

Best Small Business Loans For 2022
Susan Guillory
Written by:Susan Guillory
Business Coach and Content Writer

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

Fact Checked by: Dr. JeFreda R. Brown, Financial Expert


Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.

A small business loan is a financial tool that can assist business owners cover day-to-day expenses, purchase or upgrade equipment or invest in business growth. 

In this review, our experts have done the homework for you by using our small business loans rating methodology. This methodology evaluates each platform based on factors like loan terms, repayment optionality, loan amounts, interest rates, fees, qualification requirements, application process, and many more.

Top Picks for best small business loans

Top Picks for The Best Small Business Loans

Nearly 25% of borrowers turn to online lenders to get the business financing they need, according to a report from the Small Business Credit Survey (SBCS). However, not all lenders offer the same rates and terms for business loan products. There are also a variety of options, including short-term loans, business lines of credit, equipment financing, business startup loans, and more.


Best Small Business Loans for 2023 - Full Overview

Best Overall
Lendzi logo

Lendzi - Best for Businesses With High Revenue

Factor Rate
Starting at 1.10
Loan Amounts
Up to $4 million
Min. Annual Revenue
Key Features
  • Borrow up to $4 million in working capital
  • Min. credit score: at least 500
  • Min. time in business: 6 months
  • Equipment financing up to $2 million
  • Business line of credit up to $250,000
  • See your options without hurting your credit
  • Flexible terms: 3 to 15 months
  • Excellent customer reviews on independent review sites
  • Get funding in as little as 24 hours
Pros & Cons
  • No minimum credit requirement
  • Multiple loans and lenders to choose from
  • Excellent customer service
  • Competitive rates
  • High annual revenue requirements
  • Phone calls may be required during application process

Lendzi offer seven different types of small business products and cater specifically to small businesses that have either been turned down for financing elsewhere or businesses with high revenue. Lendzi is a direct lender but the company also partners with more than 75 other lenders to increase your chances of getting a loan. If they can’t fund your loan themselves, odds are high they can find a lender who can. The application takes just a few minutes to fill out and approved borrowers can get the funding they need in as little as 24 hours.


Main Features

Whether you’re looking for a short-term loan, a merchant cash advance, or a small business loan backed by the SBA, Lendzi can meet your needs. Most products range from $5,000 to $500,000, with the exception of SBA loans that may be as large as $5 million. Rates and fees will vary depending on the product you choose, the lender you choose, and your overall credit and income profile. Minimum qualifications include six months of business history and $180,000 in annual revenue. Credit score doesn’t matter as much, but it should be noted that those with higher scores will receive better interest rates. Below is what you can expect to see with a working capital loan.

Lendzi wants to help your small business succeed by giving you the opportunity for a loan even if you’ve been denied elsewhere. They offer a multitude of loan products, have thousands for 5-star reviews, and will help you with the entire process once you get started. Filling out the application takes just a few minutes and will not impact your credit score, allowing you to explore your options prior to making a decision.

Bluevine - Best for Business Line of Credit

Interest rates
Starting at 6.2%
Loan Amounts
Up to $250,000
Min. Annual Revenue
Key Features
  • Funding up to $250,000
  • Min. credit score: 625
  • Min. time in business: 6 months
  • Interest rates starting at 6.2%
  • Loan Repayment 6-12 months terms
  • Quick and simple application
Pros & Cons
  • Cash when you need it
  • Funding within hours
  • Low interest rates
  • Personal guarantee required
  • Interest may be high for those with poor credit
  • Not available in some states

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, pay it back, then if you need more, you can borrow from the line again and again.


Main Features

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 6.2% and go up from there, depending on your the actual rate you receive and the time it takes you to pay it off.

To qualify for a line of credit with Bluevine, you must have a credit score of at least 625 and monthly revenues of $40,000 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 and no bankruptcies in the past three years. 

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. Borrow money now and then borrow again down the road when you need it.
Backd business loans

Backd - Best for Cheapest Interest Rates

Factor Rate
Starting at 1.10
Loan Amounts
Up to $2 million
Min. Annual Revenue
Key Features
  • Borrow up to $2 million
  • Min. Credit Score: 640
  • Min. Time in Business: 2 years
  • Industry best factor rate for MCA - as low as 1.10
  • APR for the Line of credit product starts at 35%
  • Flexible repayment terms up to 16 months
  • Get funding in as little as 24 hours
  • Check your rate with a soft credit pull
Pros & Cons
  • Fast and easy online application
  • Flexible payment terms
  • Large loan amounts up to $2 million
  • Funding within 24-48 hours of loan approval
  • Rates and fees not disclosed
  • Not all industries will qualify
  • Must be in business at least one year

Backd offers personalized small business loans tailored to your specific financial needs. Founded in 2018, Backd was created to give more businesses access to funding, without having to wait months for a decision. In fact, it takes just a few minutes to apply for funding from Backd and a lending decision is made almost instantly.


Main Features

Backd offers two loan products - working capital loans and small business lines of credit. Working capital loans range from $10,000 to $2 million with no collateral required. Terms are up to 16 months and payments are made daily, weekly, or semi-monthly. Backd lines of credit range from $10,000 to $750,000 with unlimited terms and competitive rates. You can draw from the line at any time, use the funds, pay them back, and draw from the line again.

To qualify for funding from Backd, you need to be in business at least two years, have an annual revenue of $200,000 or more, and 640+ FICO score. Your business must be based in the U.S. and you must have a business bank account.

If you’ve been in business for one year and have an annual revenue of $100,000 or more, Backd is worth looking into. They offer fast lending decisions and funding times, large loan amounts, and tailor their funding specifically to meet the needs of your business.

National Funding - Best For Working Capital and Payroll Expenses

Factor Rate
Starting at 1.10
Loan Amounts
Up to $500,000
Min. Annual Revenue
Key Features
  • Min. Time in Business: 6 months
  • Min. Credit Score 600
  • Borrow up to $500,000 in working capital
  • Equipment financing up to $150,000
  • Factor rate From 1.10
  • Fast funding
  • Early payment discounts
  • Equipment financing repayment 2-5 years
  • Working capital repayment 4 months - 2 years
Pros & Cons
  • Early repayment discount
  • Solid reputation
  • Funding in as little as 24 hours from loan approval
  • Daily or weekly repayments
  • Personal guarantee required
  • Factor rates can be expensive

National Funding offers working capital loans to help your small business cover everyday expenses like rent, utilities, payroll, and taxes. A working capital loan may also come in handy during slow seasons when you need to manage gaps in cash flow. While you can borrow up to $500,000, you must repay your loan daily or weekly.


Main Features

National Funding’s short-term working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. For a chance at approval, you’ll need a minimum credit score of 600, a business track record of at least six months, and $250,000 or more in annual revenue.

National Funding also offers equipment financing and leasing of up to $150,000. You can use equipment loans to cover the cost of new or used equipment. To be approved, you'll need an annual revenue of $250,000, be in business for at least 2 years, and have a credit score of 600 and higher.

To ensure your small business has enough cash to operate smoothly, a National Funding working capital loan can be a smart move. This is especially true if you earn at least $250,000 in annual revenue and feel confident you can repay your loan within 100 days to lock in the early repayment discount.
SMB Compass

SMB Compass - Best for Large Loan Amounts

Interest Rate
Starting at 7.99%
Loan Amounts
$10K -$10 million
Min. Monthly Revenue
Key Features
  • Loans up to $10 million
  • Min. credit score: can go as low as 550 for certain loans
  • Min. time in business: 1+ years in business, no startups
  • Funding times: 5 to 7 days for term loans and 24 - 48 hours for line of credit
  • Flexible terms: 2 – 10 years for term loans
  • Interest Rates: starting at 8.99% for term loans
  • Applying does not impact credit score
  • Nine loan products to choose from
Pros & Cons
  • Low, competitive rates
  • Large loan amounts
  • Loan terms up to 25 years
  • Excellent customer service
  • Poor credit not accepted
  • Not available in all states
  • Must be in business at least one year
  • High revenue requirements

If you need a small business loan but aren’t quite sure what type of loan will be best for your business, turn to SMB Compass. The lender offers nine different types of business loans, including invoice factoring, business lines of credit, asset-based financing, equipment financing, SBA loans, and more. Customer service is excellent, and they want to help you along the way and see your small business succeed. 


Main Features

SMB Compass offers nine different types of small business loans to borrowers. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.

SMB Compass tailors their products to fit your unique business needs, making them stand out amongst the pack. Whether you need a small business line of credit to help pay for everyday expenses or you’re looking for a large, asset-based loan up to $10 million, SMB Compass can help get you approved for the financing your business needs to thrive.

Credibly - Best for Long-Term Business Loans

Interest Rate
Loan Amounts
Up $250,000
Min. Annual Revenue
Key Features
  • Min. Credit Score: 550+
  • Min. Time in Business: 6 months
  • Borrow up to Up to $250,000 in term loans
  • Borrow up to $400,000 in working capital
  • Term loan rates range between 8-25%
  • Working capital factor rate starts at 1.09
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Pros & Cons
  • Longer repayment periods
  • Fast approval and funding
  • High value loans available
  • Interest may be high for some
  • May have origination fee
  • May be more difficult to qualify for than short-term loans

Credibly offers long-term business loans that are ideal for a business geared for growth. If you’re seriously investing in the growth of your business, you may need a sizable loan that you can repay over several years, not months.

Credibly also offers SBA loans, lines of credit, merchant cash advances, invoice financing, and working capital loans.


Main Features

Credibly offers long-term business loans up to $250,000, with repayment periods of 18 to 24 months. Interest rates range from 8% to 25%. Credibly also offers working capital loans of up to $400,000 with repayment terms between six and 18 months.

To qualify for a long-term loan with Credibly, you will need a credit score of 550 and a minimum annual revenue of $180,000. Your business must be in operation for at least six months, so startups can qualify.

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 score requirements, you may qualify, even if you have poor credit.
biz2credit review

Biz2Credit - Best for Short-Term Financing

Interest rates
Starting at 7.99%
Loan Amounts
$25K to $500K
Min. Annual Revenue
Key Features
  • Working capital up to $2 million
  • Term loans up to $500,000
  • Term loan interest rate starts at 7.99%
  • Loan Repayment 12-36 months terms
  • Variable APR depending on the applicant
  • Funding in 72 hours
  • Soft credit pull
Pros & Cons
  • Higher value loans available
  • Little to no restrictions on loan use
  • Fast turnaround on application
  • Must borrow at least $25k
  • Requires high annual revenues
  • May include fees

Biz2Credit offers an ideal solution to businesses looking for higher value loans, as well as fast approval times. In addition to business term-loans, Biz2Credit offers working capital loans and commercial real estate loans. No matter what your financing needs are, this lender can help.


Main Features

Biz2Credit offers term loans of $25,000 to $500,000, with repayment terms up to 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.

If you’re looking for up to $500,000 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.
fora financial logo reviewed on

Fora Financial - Best for Low Credit Score Requirements

Factor Rate
Loan Amounts
$5K-$1.4 million
Min. Monthly Revenue
Key Features
  • Min. time in buisness: 6 months
  • Min. credit score: 550+
  • Borrow up to $1.4 million
  • Factor rate from 1.15 to 1.40
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Pros & Cons
  • Free online quote that will not affect your credit
  • Discounts for early repayment
  • Not strictly credit-based
  • Loan approval within 24 hours
  • Interest rates can be high
  • Origination fee may apply
  • Not available if you have a bankruptcy

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 Financial looks at other criteria, like how long your business has been in operation and how much you make in revenue, to determine eligibility.

Fora Financial also doesn’t have many restrictions on what you must use your business loan for, as long as it’s for your company.


Main Features

Fora Financial offers term loans up to $1.4 million, with a 72-hour turnaround time on applications. Repayment terms are up to 15 months, with factor rate ranging from 1.1 to 1.9.

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. The minimum credit score requirement is just 550. Keep in mind, though, that the better your credit score, the better the interest rate you’ll receive on your loan.

Poor credit shouldn’t prevent you from having 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.

SmartBiz- Best for SBA Loans

Interest Rate
7.5% - 10.29%
Loan Amounts
$30K - $350K
Min. Annual Revenue
Key Features
  • SBA 7(a) loans up to $350,000
  • SBA commercial real estate loans up to $5 million.
  • Min. Credit Score: 660
  • Min. time in business: 2 years
  • Loan Repayment 10 - 25 years
  • SBA 7(a) loan rates: 10.75% - 11.75%
  • SBA Commercial real estate loan rates: 5.50-6.75%
  • Receive multiple loan offers
Pros & Cons
  • Lower interest rates
  • Longer repayment terms
  • High approval rates
  • Additional fees may apply
  • Slow turnaround for SBA loan
  • Long application process

SmartBiz offers short-term business loans, business line of credit and SBA loans. SBA loans are backed by the Small Business Administration and come with lower interest rates and more favorable terms. The qualification requirements are higher for SBA loans than term loans, but if you meet them, the savings in interest and longer repayment periods may make the loan worth it.


Main Features

SmartBiz offers term loans and 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 SBA commercial real estate loans of $500,000 to $5 million. Both have repayment periods of 10 to 25 years. Here are the interest rates: SBA 7(a) loan: 10.75%-11.75%, SBA Commercial real estate loan: 5.50-6.75%

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.

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.
Uncapped - Fast, flexible funding for your online business

Uncapped - Best for No Credit Check Business Loans

Revenue Share Rate
5% to 25%
Loan Amounts
Up to $10 million
Min. Annual Revenue
Key Features
  • Borrow up to $10 million
  • Flat fee instead of interest rate for term loans: 2% - 12%
  • Revenue-based financing: 5% -25% revenue share rate
  • No minimum credit score
  • No personal guarantees required
  • Best for online businesses
Pros & Cons
  • No personal guarantees required
  • No collateral required
  • No minimum credit score requirement
  • Fast funding
  • No origination fees or prepayment penalties
  • Not offered in some states
  • Not open to sole proprietors
  • Must be established for six months
  • Must have an online business model

Uncapped offers business funding through a revenue-shared agreement. It’s ideal for businesses with an online model, such as ecommerce, subscription, SaaS, or those with a mobile app. Uncapped offers both fixed-term and revenue-based loans that don’t require collateral or personal guarantees. There’s no minimum credit score requirement, and you’ll even have the option to repay Uncapped as a percentage of your revenue.


Main Features

You can get an unsecured business loan from Uncapped in an amount ranging from $10,000 to $10 million. Other than a flat finance fee that varies from 2% to 12% of the loan amount, there are no fees or prepayment penalties. There are also no minimum credit requirements to qualify, but you will need at least six months of business history and at least $50,000 in monthly revenue.

Your business must also process more than 40% of its payments online. You have two repayment options with Uncapped: Fixed installments over three to 24 months, or revenue-based repayment, which requires you to pay 5% to 25% of your sales until your obligation is fulfilled.

Uncapped offers unsecured loans that can meet a variety of business needs. The transparent fees and flexible financing options make the lender worth comparing if you’re seeking an unsecured business loan.

Main Features of the Best Small Business Loans

National Funding4.1
SMB Compass4.5
Fora Financial4
  • Min. Credit Score - At least 500
  • Min. Time in Business - 6 months
  • Min. Annual Revenue - $180,000
  • Loan Amount - Up to $400,000
  • Interest Rate - Factor rate from 1.15

Tips for Comparing Small Business Loans

With so many options available, it can be daunting to choose the right one. Which lender has the best reputation? Which offers the lowest rate? Here are the criteria we looked at to rank lenders.

  • Loan Features: Every lender offers different loan amounts and terms. Look at a variety of types of loans and financial products.
  • Application process: Consider whether applying for a loan would result in a hard pull or soft pull on applicants’ credit, as well as how complicated the application was.
  • Interest rates and fees: In addition to interest rates, some lenders charge other fees, like origination or late fees.
  • Qualification process: Explore what it takes to qualify for a loan, including minimum credit score, annual revenue, and business history requirements.
  • Customer support: Look for lenders that are easy to contact through various channels, including phone, email, and chat.
  • Online user reviews: Look at reviews of lenders from customers on independent review sites like Trustpilot.
  • Perks and Bonuses: Look at what makes a lender stand out, with perks like payment flexibility, advertising transparency, and advanced technology.


Small Business Loan User Survey

The survey was commissioned by FinImpact and conducted by the market research company Pollfish. The company uses the Organic Sampling survey methodology known as Random Device Engagement (RDE). The Pollfish research team maintains response quality and accuracy by utilizing a proprietary machine-learning algorithm that detects fraudulent responses early and removes respondents immediately who aren’t up to their standards.

We have run a Pollfish survey among 2292 participants in the U.S. to find out if they’ve ever taken a small business loan; 750 participants (~33%) said yes. The data was collected in June of 2023. 

Small Business Loan Demographics

According to a FinImpact survey of 750 adults who applied for a business loan, there are slightly more female than male participants, 57.2% female vs. 42.8% male.

Age Distribution

  • Majority of respondents aged 25 – 44
  • 41% of respondents aged 35-44
  • 33% of respondents aged 25 - 44
Small Business Loan Demographics - age distribution - Finimpact Survey

Income Status of Small Business Loan Applicants

The most commonly represented income groups of respondents who have taken a small business loan included:

  • People earning $25,000-$49,999 – 22%
  • People earning $50,000 - $74,999 – 13% 
  • People earning $75,000 - $99,999 – 16%
  • People earning $100,000 or more - 25%

Low to middle-income earners ($25 K – $74 K) constituted the majority of the respondents - up to 35%.

The percent of the upper-class population ($100 K +) participants adds up to 25% of the respondents, followed by the medium-to-high level earning population (16%).

Income Status of Small Business Loan Applicants - Finimpact survey

That means small business loans are most attractive for the low-to-middle-earning population.

Employment Status & Other Small Business Loan Stats

  • The vast majority of the respondents taking a small business loan were employed for wages (~67%)
  • Self-employed constituted only ~13% of the respondents
  • The majority of the respondents have a University education (~37%) and high-school education (~29%), followed by almost equal numbers of post-graduates and technical college graduates (~15% each)
  • More respondents living with a spouse (39% married and 13% living with a partner) than single (35%) respondents participated in the survey
  • 40% of the survey participants didn’t have any children, followed by 23% having 1 and 21% with two children
  • The respondents came from all over the U.S. The most numerous locations included: 
    • Florida - ~10%
    • California - ~10%
    • Texas - ~8%
    • Georgia and New York – ~5% both


What Is a Small Business Loan?

A small business loan is a type of financing that provides the capital your business needs to pay expenses or invest in growth. You receive a lump sum of money, which you repay over an agreed-upon period, with interest.

You may use a small business loan to hire employees, buy inventory, pay bills, rent or buy a property, or buy equipment such as equipment for starting a bakery. Each small business lender may have certain requirements to qualify for financing, including credit scores, time in business, and annual or monthly revenue.


How Do Business Loans Work?

Small business loans work much like any other loan type: after you apply for a loan, you’ll receive access to a certain amount of funds. Use those funds for whatever business expenses you may have. 

You’ll be required to make monthly or weekly payments, including principal and interest until the loan is paid off. Be sure to carefully review your loan agreement to understand how much you will pay in interest and how long you have to repay the loan before you sign it.

If you're not be able to repay the loan, the lender has the right to seize any asset you put up as collateral to cover your debts. That’s why it’s important to only borrow what you are sure you can afford to pay back.


Small Business Loans Requirements

Lenders often consider a combination of multiple factors, and each lender may have specific requirements and evaluation criteria.

  • Credit ScoreLenders consider personal and business credit scores. A good credit score improves loan approval chances. Higher scores indicate responsible financial management, reducing lender risk.
  • Time in BusinessLenders prefer businesses with at least 1-2 years of operation. Longer histories signify stability and reliable revenue generation, increasing loan eligibility.
  • Business RevenueLenders evaluate revenue to assess repayment capability. Higher revenues indicate strong cash flow, boosting loan approval prospects.
  • IndustryIndustry impacts loan requirements. Some industries are perceived as higher risk, making loan acquisition more challenging due to market conditions, regulations, or historical performance.
  • Business OwnershipLenders assess ownership structure and the owner's level of investment and commitment. Personal involvement demonstrates accountability and motivation for business success, influencing loan decisions.
  • BankruptciesLenders consider the presence of past bankruptcies. Recent bankruptcies can adversely impact loan eligibility, while older bankruptcies may have less significant effects. Each lender has specific policies regarding bankruptcies in loan applications.


Types of Small Business Loans

There are several types of small business loans available. Which you choose depends on your business needs.

  • SBA Loans: These are loans backed by the Small Business Administration, and come with some of the lowest interest rates and most favorable terms. Generally speaking, you need to have good to excellent credit to qualify.
  • Term Loans: These are offered by banks and online lenders and may range in their criteria to qualify, as well as their rates and terms. There are term loans available even for businesses with poor credit, though these may charge more interest.
  • Lines of Credit: Rather than getting all your money upfront, with a line of credit, you have access to a certain amount of money, which you can borrow from and repay again and again.
  • Merchant Cash Advances: This isn’t a loan but rather an advance on future credit and debit card sales. You repay this through automatic payments made daily or weekly from card transactions.
  • Invoice Factoring: With invoice factoring, you sell your unpaid invoices to a factoring company, minus a fee. The factoring company then collects the payment on the invoice.
  • Equipment Financing: This is specifically for purchasing heavy machinery or company vehicles.  The equipment you purchase acts as collateral on the loan, which may help you get a lower interest rate.


Where Can You Get a Small Business Loan?

There are multiple ways you can get a small business loan, including:

Banks and credit unions

Most banks and credit unions in your area will offer loans and lines of credit to small businesses. The qualifications are typically more stringent than online lenders, but you will typically receive better interest rates if your credit is in good standing. Also, more documentation is required and funding may take up to a few weeks from loan approval.

Online lenders

Acquiring a small business loan through an online lender is most likely going to be the quickest form of financing. Qualifications are not as strict, with some lenders catering specifically to businesses with less-than-ideal credit, and start-ups may qualify. Due to the speed of funding and flexible requirements for loan approval, interest rates may be higher than other small business lending options.

Small Business Administration

The Small Business Administration doesn’t lend to businesses directly, but instead partners with online lenders, banks, community development organizations, and microlending institutions to help fund your small business. Requirements for a loan backed by the SBA are higher than other options, but you most likely will receive better interest rates and longer loan terms.


How to Get a Small Business Loan

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.

Step 1: Gather Documents: Start by seeing what your lender requires with the application. Many lenders will ask for:

  • Photo ID
  • Social Security number
  • Bank or accounting records
  • Business licenses

Step 2: Apply: Each application may vary in its complexity. Some may take just five minutes to fill out, while others may take a lot longer. If you’ve gathered your documents, this step should be fairly straightforward. Expect to be asked about:

  • Business address
  • Industry
  • Annual revenues
  • Time in business
  • Personal details, including address, Social Security number, income
  • Personal and business tax returns
  • Amount you want to borrow

Step 3: Wait: Some lenders approve loans instantly whereas others take a few days. SBA loans have the longest approval rate, typically taking a few weeks or more.

Step 4: Review Loan Agreement: Once you’ve been approved, you will be sent a loan agreement that includes how much you are borrowing, the interest rate, and repayment terms. If you agree with the terms, sign and return to the lender.

Step 5: Get Paid: Once the lender receives your signed loan agreement, the loan funds will be deposited into your business bank account in as little as one business day.

how to get a small business loans - Finimpact

Conventional Business Loans vs. SBA Loans

Small business owners with good credit might consider applying for either a conventional business loan or an SBA loan.

  • Conventional small business loan: offered through a bank or online lender, such as the ones listed above. Some have strict criteria to qualify, while others may approve borrowers with less than perfect credit. Some require repayment in a few months, while others have repayment periods of a few years.
  • SBA loan: Backed by the Small Business Administration, which sets the rates and terms. Those rates and terms tend to be the lowest and best option for small business financing, but you’ll need good to excellent credit and a track record of doing business to qualify. Many banks and online lenders offer SBA loans, but they can take weeks or months longer than conventional loans to process and be approved.


Which Industries are Most Likely to Apply for Loans?

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 2022 Small Business Credit Survey, companies most likely to seek financing include manufacturing, retail, leisure and hospitality, healthcare and education, and professional services and real estate. The report found that loans and lines of credit are the most common forms of financing sought by applicants.

Other industries that may need financial assistance to help with growth and day-to-day operations include construction, transportation, restaurants, and specialty niches like vending machine businesses and internet-based companies.



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. Most lenders offer both small business loans and business lines of credit, so you can decide which type of financing is right for you.

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.

Frequently Asked Questions(FAQ)

What credit score is needed for a small business loan?

Credit score requirements vary depending on the lender. Some lenders allow borrowers to qualify with low credit scores, but your odds improve with a FICO credit score of 600 or higher.

Do business loans look at personal credit?

Your personal credit score may be factored into decisions by lenders for a business loan. This is especially true for sole proprietors and newer business owners without an established business credit history.

What can I use a small business loan for?

A small business loan can be used in a variety of ways including working capital, inventory needs, renovations, technology upgrades, staffing, real estate, business acquisitions, and more.

How do I qualify for a small business loan?

The qualifications to be eligible for a small business loan vary depending on the lender. All lenders will perform a credit check as part of the application process. Some lenders allow you to prequalify without it negatively affecting your credit score. Eligibility for a small business loan may depend on your current annual or monthly business revenue or how long you've been in business.

Susan Guillory

Written by: Susan Guillory

Professional Intuitive Business Coach and Content Writer

Susan Guillory is an intuitive business coach and content magic maker. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi.

More about me
Sarah Brooks Personal Finance Writer and Editor

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me
Dr. JeFreda R. Brown

Fact Checked by: Dr. JeFreda R. Brown

DBA, CFEI, and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal...

More about me

Related Loan Picks

Show More