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How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Jill A. Chafin | Edited by Kurt Adams and Janet Schaaf | February 27, 2024
Best small business loans in 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Learn more about how we chose our picks.
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Small business lenders at a glance
Small Business Administration: Best for SBA loans
| Loan amounts | Up to $5,000,000 |
| Maximum interest rate |
|
| Term length | Up to 300 months |
| Minimum credit score | 680 (recommended) |
| Minimum time in business | 24 months (recommended) |
Capped interest rates
Long repayment terms
Offers term loan, line of credit or microloan
May require a personal guarantee
Collateral required for loans over $25,000
Longer turnaround time than online lenders
The U.S. Small Business Administration (SBA) partners with lenders nationwide to offer finance options for businesses that don’t qualify for traditional funding. Since the SBA reduces lender risk by guaranteeing up to 75% to 90% of the loan, lenders can offer lower rates and extended repayment terms.The three main SBA loan programs are the SBA 7(a) loan for general expenses, the SBA CDC/504 loan for major fixed assets and the SBA microloan for smaller purchases.
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OnDeck: Best for short-term business loans
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 35.40% (for at least 5% of customers)* |
| Term length | 18 to 24 months |
| Minimum credit score | 625 |
| Minimum time in business | 12 months |
*Minimum APR offered to at least 5% of customers (not the lowest rate offered).
Fair to low credit accepted
Can help build business credit
Funds can be available within same business day
Requires daily or weekly repayments
Not all industries are eligible
Not available in Nevada, North Dakota or South Dakota
OnDeck is our top pick for short-term business loans because you can borrow large amounts, even with a low minimum credit score. If you qualify, you can even get funds on the same day you’re approved. Additionally, you can build your business credit by making on-time payments with an OnDeck loan.
Read our OnDeck review.
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Funding Circle: Best for long-term business loans
| Loan amounts | $25,000 to $500,000 |
| Starting interest rate | 11.29% |
| Term length | 6 to 84 months |
| Minimum credit score | 660 |
| Minimum time in business | 24 months |
Ideal for long-term funding needs
No hard credit check for most applicants
No minimum revenue requirement
Payments aren’t reported to all credit bureaus
Must be in operation for at least two years
Collateral and personal guarantee required
With a long-term business loan from Funding Circle, you can enjoy competitive rates, long repayment terms and no prepayment penalties. Additionally, you can receive funds as quickly as two business days. Funding Circle also offers funding options for women-owned businesses and minority entrepreneurs.
Read our Funding Circle review.
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American Express Business Line of Credit: Best for business line of credit
| Loan amounts | $2,000 to $250,000 |
| Starting interest rate |
|
| Term length | 6, 12 or 24 months |
| Minimum credit score | 660 |
| Minimum time in business | 12 months |
Quick application process
Only pay interest on what you use
No prepayment penalties
Requires a personal guarantee
Confusing fee structure
Must link bank account to determine eligibility
The American Express Business Line of Credit offers businesses access to revolving funds up to $250,000. With a business line of credit, you can borrow up to the credit limit as often as you like, only paying interest on what you use. The streamlined application takes minutes to complete, with funds available within one to three business days.
Read our American Express Business Line of Credit review.
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Credibly: Best for working capital loans
| Loan amounts | $5,000 to $400,000 |
| Starting interest rate | 1.11 factor rate |
| Term length | 3 to 3 months |
| Minimum credit score | 500 |
| Minimum time in business | Three months |
Ideal for almost any type of short-term business need
Low minimum credit score requirement
Businesses can qualify after only three months of operation
Need $180,000 annual revenue to qualify
Charges a 2.50% origination fee
Most products provided by third-party partners
Credibly’s working capital loans can provide funding in less than 24 hours if you need cash to cover operating expenses like payroll or inventory. With a minimum credit score of 500, Credibly may be willing to look past a checkered credit history if you have a healthy annual revenue.In addition to working capital loans and merchant cash advances, Credibly partners with lenders offering merchant cash advances, business lines of credit, equipment financing, SBA loans, invoice factoring and other loans for small businesses.
Read our Credibly review.
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Taycor Financial: Best for equipment financing
| Loan amounts | $500 to $2,000,000 |
| Starting interest rate | 4.99% |
| Term length | 12 to 84 months |
| Minimum credit score | 550 |
| Minimum time in business | Startup |
Offers 100% financing with no down payment
Startup friendly — no minimum time in business requirement
No prepayment penalties
Equipment financing rates can go as high as 28.00%
Includes a documentation fee
Stricter criteria for equipment refinancing
Taycor Financial offers equipment loans at affordable rates, flexible terms and no prepayment penalties. Since the equipment acts as collateral to secure the loan, all business owners are encouraged to apply — including startups or low-revenue businesses. Additionally, Taycor Financial’s low minimum required credit score makes it a potential option if you’re looking for equipment loans with bad credit.
Read our Taycor Financial review.
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Wells Fargo: Best traditional bank for business loans
| Loan amounts | $10,000 to $15,000,000 |
| Starting interest rate | Varies by product |
| Term length | Up to 84 months |
| Minimum credit score | 680 for unsecured line of credit (not disclosed for other products) |
| Minimum time in business | 24 months for unsecured line of credit (not disclosed for other products) |
Offers a range of business products and services
Automatic enrollment in free rewards program
No collateral required for unsecured line of credit
High annual fees for unsecured line of credit
Personal guarantee required for some products
Must be in business for two years to qualify for most loans
With over 7,000 physical branches throughout the U.S., Wells Fargo could be a good option for business owners wanting a traditional brick-and-mortar bank experience. Wells Fargo offers unsecured and secured lines of credit, SBA loans, healthcare practice loans, business bank accounts and business credit card rewards. However, bank loans for business typically have longer funding times than online financing companies.
Read our Wells Fargo review.
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Fundbox: Best for startup business loans
| Loan amounts | Up to $150,000 |
| Starting interest rate |
|
| Term length | 3 or 6 months |
| Minimum credit score | 600 |
| Minimum time in business | Six months |
Ideal for startups
Unlock more discounts with Fundbox Plus
Available to businesses in all U.S. states
Only offers a business line of credit
Doesn’t fund all industries
Short repayment terms
If you need a quick startup business loan, Fundbox offers up to $150,000 with its business line of credit. New companies can qualify after six months of operation and at least $100,000 in annual revenue. Withdraw funds when needed, only paying interest on the amount you use.You can unlock additional benefits, including up to 20% off fees, by upgrading to Fundbox Plus.
Read our Fundbox review.
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Fora Financial: Best for bad credit business loans
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | 1.10 to 1.40 factor rate |
| Term length | Up to 15 months |
| Minimum credit score | 500 |
| Minimum time in business | Six months |
Low minimum credit score
Early payoff discount
Fast funding time
Doesn’t help build business credit
Need at least $15,000 monthly revenue to qualify
Factor rate makes it difficult to compare loan costs
If you’re looking for a bad credit business loan, Fora Financial considers borrowers’ credit scores as low as 500 without the need to pledge collateral. Your business could access funds up to $1,500,000 million within 24 to 72 hours after approval.
Read our Fora Financial review.
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National Funding: Best for fast business financing
| Loan amounts | $5,000 to $500,000 |
| Starting interest rate | 1.11 factor rate |
| Term length | 4 to 24 months |
| Minimum credit score | 600 |
| Minimum time in business | Six months |
Funding as soon as 24 hours
Early payoff discount
No down payment or collateral needed
Need $250,000 in annual revenue to qualify
Factor rate makes it hard to compare other lenders
Only two products available, despite misleading website marketing
National Funding provides quick business loans for companies needing fast access to capital. With a National Funding loan, you could borrow up to $500,000 with no collateral. Even better, you can get a discount for paying off your loan early.
Read our National Funding review.
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Headway Capital: Best for unsecured business loans
| Loan amounts | Up to $50,000 |
| Starting interest rate | Not disclosed |
| Term length | 12, 18 or 24 months |
| Minimum credit score | Not disclosed |
| Minimum time in business | Six months |
No collateral required
Short time-in-business requirement
No monthly or annual service fees
Higher interest rates than secured loans
Weekly payments may be required
Not available in all states
If you can’t provide collateral, consider an unsecured business loan with Headway Capital. You can borrow up to $50,000 for expenses like payroll, inventory, marketing or covering seasonal dips in income.Headway Capital uses a holistic approach to evaluate your loan application, considering factors beyond your credit score. However, you need an annual revenue of at least $50,000 to qualify.
Read our Headway Capital review.
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eCapital: Best for invoice factoring
| Loan amounts | Up to $30,000,000 |
| Invoice factoring rates | 0.90% to 2.50% |
| Minimum credit score | Not needed |
| Minimum time in business | 12 months |
Provides non-recourse invoice factoring
Offers same-day funding
High funding limits
Must apply via contact form or phone call
Slightly higher fees than recourse factoring
Need $10,000 monthly revenue to qualify
If a significant amount of your capital is tied up in unpaid invoices, consider fast invoice factoring with eCapital. You can receive a cash advance of up to 90% for your outstanding invoices, allowing you to focus on your business while eCapital collects customer payments. eCapital provides non-recourse invoice factoring, enabling you to keep the advance even if your customer never pays.
See Your Business Loan Offers
Accion Opportunity Fund: Best for business microloans
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 8.49% |
| Term length | 12 to 60 months |
| Minimum credit score | Not disclosed |
| Minimum time in business | 12 months |
Offers business coaching and mentorship
Fixed monthly payments
Over 90% of clients are women, people of color or low-income business owners
Not available in all states
Must generate $50,000 or more in annual revenue
Doesn’t list minimum credit score requirements
If you can’t qualify for traditional financing, you may find success with a microloan. The Accion Opportunity Fund (AOF) is a nonprofit organization focused on providing affordable funds to diverse business owners.AOF also offers microloans for immigrant-owned businesses, as well as grants for Black small business owners. Entrepreneurs can take advantage of AOF’s extra resources, coaching and support in English and Spanish.
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What is a small business loan?
Small business loans help new and established companies access capital for various business needs. With business financing, you can purchase inventory, invest in new equipment, build an expansion or cover unexpected expenses.
Traditional banks, online lenders and government agencies all offer small business loans.
The best business loan for your company depends on how much you need, your business’s qualifications and how quickly you need the funds.
On this page
- What is a small business loan?
- Types of small business loans
- Additional business funding options
- Business loan requirements
- Getting a business loan in three easy steps
- How to compare small business loans
- How we chose the best small business loans
- Best small business summary
- Frequently asked questions
Types of small business loans
Business loans come in a variety of flavors, with terms as short as a few months or as long as 25 years. You can find business loans with traditional brick-and-mortar banks, credit unions, online lenders and even the U.S. Small Business Administration. Here are some common types of business loans to choose from:
Term loans
Business term loans provide a lump sum of cash upfront, paid with interest in fixed monthly or weekly installments. Short-term business loans have repayment terms of a few months to a year or more and are commonly available from online lenders. Long-term business loans, usually offered by traditional brick-and-mortar banks, can last 10 years or more.
Line of credit
Similar to a credit card, a business line of credit is a revolving form of funding that requires you to pay interest only on the amount you borrow. Lines of credit are best for recurring expenses like rent and inventory purchases or seasonal fluctuations in income..
Equipment financing
Also known as equipment loans, equipment financing enables businesses to purchase heavy machinery, computers, vehicles or other necessary equipment to operate the business. The equipment acts as collateral for the loan.
Commercial real estate loans
Commercial loans help large companies to purchase materials, finance equipment or build property for business uses. Commercial real estate loans are similar to a home mortgage, but often require a higher upfront down payment.
SBA loans
SBA loans are guaranteed by the U.S. Small Business Administration (SBA), offering long repayment terms with comparatively low interest rates.The SBA 7(a) loan provides up to $5 million for various business purposes, while the504/CDC loan is more commonly used for purchasing equipment or real estate. You’ll apply with a bank or online lender, not directly through the SBA.
Microloans
Microloans are loans for $50,000 or less. The SBA offers microloans, along with several nonprofit or community organizations. Microloans are often geared towards startups or underrepresented business owners, such as women or people of color.
Working capital loans
Working capital loan is an umbrella term for financing that covers short-term operating expenses, like payroll or cash flow gaps. Working capital loans can come in various forms, like working capital lines of credit, term loans and cash advances.
Invoice factoring
Invoice factoring enables businesses to sell unpaid invoices to a factoring company in exchange for a cash advance. This may be a good option for cash-strapped businesses or businesses with poor or limited credit, but you can typically get only 70% to 90% of your invoice face value. It can also get expensive, with factoring rates going as high as 8.25%.
Additional business funding options
In addition to traditional business loans, there are several other sources of business funding to consider.
Merchant cash advance
A merchant cash advance also gives you a lump sum of cash upfront, but the advance is against your future sales. Because of this, the merchant cash advance is repaid through a preset percentage of daily or weekly credit card sales. This type of funding can deliver cash fast, but it can be a very expensive method of borrowing.
Credit cards
You probably have one or more personal credit cards, but business credit cards can help track business expenses, unlock travel or cash-back rewards or just help monitor employee spending. To avoid paying a high annual percentage rate, make sure to pay off your statement balance in full by the due date.
Small business grants
The federal government, state governments and private corporations and foundations offer grants for small businesses. Because grants are free money that usually doesn’t need to be repaid, competition can be quite stiff. There are also minority business grants and women-owned business grants.
Crowdfunding
Business crowdfunding is when you ask family, friends and the general public for donations to kickstart your business. This method helps you test out a business idea and may appeal most to startups or other businesses struggling to get funding. Just be aware that crowdfunding platforms may charge a fee.
Personal loans
Personal loans for business may be easier to get if you struggle to meet the strict eligibility criteria for a business loan. Because this relies on your personal credit and income, your personal credit and assets are at risk. And personal loans won’t help you build business credit, nor can you claim the loan interest as a qualified business tax deduction.
Bootstrapping
Bootstrap financing is when you use your own financial resources to fund your business. Startup businesses may use bootstrapping to get off the ground, but you risk not recouping your investment if your business fails to thrive.
Business loan requirements
When you apply for a business loan, lenders want to know that your business and credit history are stable. Common business loan requirements include reviewing your credit profile, time in business, capacity to take on debt and any collateral you may have.
TIME IN BUSINESS
In general, your business will be in a stronger position to borrow if you can prove you have a track record of solid revenue over the past two years. This is more attractive to a lender than a company with spotty revenue over the past six months.
CREDIT SCORE
Lenders use your credit score to determine your riskiness as a borrower. In most cases, you’ll need a good to excellent credit score in the mid-600s or higher to get a business loan, although certain lenders allow scores as low as 500. Your business credit score should be at least 80, although some lenders may rely on just your personal score when reviewing your loan application.
CASH FLOW
A business cash-flow projection shows when money is collected, when cash goes out and what’s left. Lenders typically like to see that you understand where your business’s money is going each month.
COLLATERAL
Collateral is an asset that lenders can legally seize if you can’t make payments. Common forms of collateral including real estate, equipment, accounts receivable and even cash. Some business owners use their personal assets — including their homes — as collateral on a business loan.
FIXED CHARGE COVERAGE RATIO
Your business’s fixed-charge coverage ratio measures how well your company can pay its fixed expenses, including any debts and interest you have. Lenders use this metric to help determine whether or not to approve a business loan application.
WORKING CAPITAL
Your working capital refers to the available money you have to fund your company’s day-to-day operations. You can calculate your working capital by subtracting the business’s debt liabilities due within a year from current assets that you can convert to cash.
View Your Small Business Loan Options
The process to get a business loan depends on the lender and the type of funding you need. But that doesn’t mean it has to be complicated. Start by answering these questions.
Why do you need the funds?
Are you looking to buy a vehicle for your new food truck business? Are you looking for commercial real estate so you can expand to a second location across town? Or maybe you need some quick cash to fill in the gaps during the off-season.
What you can afford?
Look at your business budget to decide what you can afford. Some business loans are repaid monthly over long periods, while others require weekly or even daily repayment. Business loans are debts you must repay, so make sure your business can handle the extra payment.
How can you get the best rates?
Before you decide to apply, take the extra time to shop around. Compare offers to get the best rates. This extra bit of legwork may reduce your interest or fees in the long run. Read small business lender reviews to ensure you are working with a reputable lender.
Small business loan application checklist
Once you’ve determined that your business can handle taking on debt, the process of applying for a small business loan involves rounding up the necessary documents for your loan application. The exact paperwork differs across business funding partners, but will most likely include the following documents:
2+ years of personal and business tax returns
Recent profit-and-loss statement
Past business bank statements
Recent balance sheet
Legal filings related to ownership
Information on existing debts
Business license (if applicable)
Business plan
A certificate of good standing
How to compare small business loans
In order to pick the best business loan, make sure to compare the following:
- Interest rate: Is the business loan interest rate variable or fixed? Does the lender charge a factor rate? How much will you pay in interest charges over the life of the loan?
- Repayment term: When do payments start? Do you prefer daily, weekly or monthly payments?
- Time to fund: How long does the application process take? Keep in mind that the quickest business loans aren’t always the most affordable.
- Additional fees: Read your loan contract’s fine print for extra fees, such as origination fees, late charges and business loan prepayment penalties.
Before closing your loan
After approval, the closing process involves reviewing documentation that will determine the terms of your selected loan. A business loan agreement is a legally binding contract that dictates your interest rate and repayment schedule.
Ensure you thoroughly understand what the lender is asking of you and the implications these terms have on your business’s financial future. After you sign, you’ve agreed to everything in the contract — including what happens when you make late payments or default.
How we chose the best small business loans
We reviewed the leading small business lenders to determine the overall best 13 small business loans. To make our list, lenders must meet the following criteria:
- Maximum amounts no less than $150,000
- Funding available within two weeks of approval
- No more than two years in business required
- Personal credit score requirements below 680
- Transparent rates and repayment terms
We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide unique perks to customers, like free business coaching.
Frequently asked questions
Business owners can take out small business loans — generally between $5,000 and $500,000 or more — to finance expenses like payroll financing, inventory, equipment and other costs. Repayment terms could be as short as three months or as long as 25 years. Both traditional financial institutions and alternative online lenders offer small business loans.
Yes, bad credit business loans are available for business owners with personal credit scores as low as 500. However, lenders may offer you a higher interest rate if you want to borrow money and have a lower credit score.
A personal guarantee requires you as the business owner to be personally responsible for the company’s debt in case of default. A personal guarantee is pretty common on small business loans because it lowers the risk for a lender. But as the business owner, it may limit any protections your business structure offers.
Online lenders may be the best option to get a startup business loan with no revenue. Unlike brick-and-mortar banks that often have stricter eligibility requirements, alternative lenders typically require only a few months in business. Other options beyond new business loans include crowdsourcing, self-funding or grant funding.
Each lender will have its own criteria based on the loan type. In general, you need a personal FICO Score of at least 500 and a business credit score of 80 to get a small business loan. But, the lowest business loan interest rates are typically reserved for borrowers with higher credit scores. If this doesn’t fit your business, online lenders may be more lenient with credit score requirements.
Most lenders look for minimum monthly or annual revenue when you apply for a loan. Many traditional banks do not publish their minimum revenue requirements, but online lenders tend to be more transparent. It’s common to expect a minimum annual revenue requirement of $50,000 or more for unsecured loans. However, you may be eligible for a business loan with a lower annual revenue if you can provide collateral.
If you were rejected for a business loan, revisit the reason why. Focus on improving your personal credit and business credit scores. If you haven’t operated in business long enough, wait a bit. In the meantime, consider a small business credit card or a personal loan to access capital for any immediate business needs.
