Written by Carissa Chesanek and Melissa Wylie | Edited by Kurt Adams and Janet Schaaf | Updated on February 13, 2023
Learn more about how we chose the best small business loans.
| APR range | 7.5% to 10.29% [shortcode update] | |
|---|---|---|
| APR range | 10.50%-11.50% variable | |
| Loan amount | $30,000 to $350,000 | |
| Term (months) | 120 to 300 months | |
| Min. credit score | 650 | |
| Fees | Up to 3.5% of guaranteed portion up to $1,000,000, plus 3.75% of guaranteed portion over $1,000,000 | |
| Time to funding | As short as 7 days | |
| Read our SmartBiz review | ||
Down payment required
Businesses must show at least two years of operating history
SBA loans are widely available through banks and other financial institutions, but SmartBiz stands out for being quick and convenient. By matching you with a lender in its network, SmartBiz helps to accelerate the application process and funding timeline for SBA funding.
With repayment terms from a few months to two years, short-term loans are good for when you expect a quick return on what you’re investing in with the loan funds.
| APR range | Starting at 29.9% APR [shortcode] | |
|---|---|---|
| APR range | Starting at 29.90% APR | |
| Loan amount | $5,000 to $250,000 | |
| Term (months) | Up to 24 months | |
| Min. credit score | 625 | |
| Fees | Maximum origination fee of 4.00% | |
| Time to funding | Up to 3 business days | |
| Read our OnDeck review | ||
$100,000 annual revenue required
Lowest APRs reserved for strongest applicants
With lenient eligibility criteria, OnDeck’s short-term loans can be a viable option for many businesses that need extra cash. Whether it’s for plugging up cash flow gaps or covering an unexpected expense, you can get up to $250,000 from OnDeck relatively quickly.
Long-term business loans offer relatively low-rate financing for lasting investments, such as machinery or business acquisition.
| APR range | 12.45% to 40.51% | |
|---|---|---|
| APR range | 12.45% to 40.51% | |
| Loan amount | $25,000 to $500,000 | |
| Term (months) | 6 to 84 months | |
| Min. credit score | 660 | |
| Fees | Origination fee of 4.49% - 8.49% | |
| Time to funding | 2 days | |
| Read our Funding Circle review | ||
Requires collateral
Average Funding Circle borrower makes about $1.4 million in annual sales
Because of their longer repayment times and comparatively lower interest rates, most long-term loans come from traditional banks and take longer to approve. As an online, peer-to-peer lender, Funding Circle stands out because you can receive funding within two business days for long-term loans up to 84 months.
A line of credit is funding that you can draw upon as needed, and you’ll only have to pay interest on what you borrow.
| APR range | Simple interest rates starting at 4.80% [shortcode] | |
|---|---|---|
| APR range | Simple interest rates starting at 6.20% for a 26-week repayment term | |
| Loan amount | Up to $250,000 | |
| Term (months) | 6 to 12 months | |
| Min. credit score | 625 | |
| Fees | N/A | |
| Time to funding | 1 to 3 business days | |
| Read our Bluevine review | ||
$120,000 in annual revenue required
Weekly interest in a short repayment time frame can make Bluevine an expensive option
You don’t need perfect credit or a long time in business to qualify for a Bluevine line of credit, a revolving form of funding you can use for a variety of operating expenses. As long as you can meet its minimum monthly revenue requirements, you might be eligible for a credit line up to $250,000.
Working capital loans are short-term loans disbursed within 24 hours to a week of approval and designed to fund your company’s day-to-day operations during a lull in business activity.
| APR range | Factor rates starting at 1.15 [shortcode] | |
|---|---|---|
| APR range | Factor rates starting at 1.15 | |
| Loan amount | Up to $400,000 | |
| Term (months) | 3 to 15 months | |
| Min. credit score | 500 | |
| Fees | 2.50% origination fee | |
| Time to funding | May be same business day | |
| Read our Credibly review | ||
Six months in business required to qualify
Average of $15,000 in monthly bank deposits required
If you need cash to cover operating expenses or other relatively short-term business needs, Credibly’s working capital loans can offer you funding fast. With a minimum credit score of 500, Credibly may be willing to look past a checkered credit history, but you’ll need to prove a healthy annual revenue instead.
Equipment financing allows businesses to pay for equipment, such as commercial trucks, a restaurant oven or an office copier, a little at a time for relatively low rates.
| APR range | 3.49% to 28% [shortcode update] | |
|---|---|---|
| APR range | 3.49% to 28.00% | |
| Loan amount | Up to $2,000,000 | |
| Term (months) | 12 to 84 months | |
| Min. credit score | 550 | |
| Fees | Doc fee (amount not disclosed) | |
| Time to funding | Typically within 24 hours | |
| Read our Taycor Financial review | ||
Typically requires 2 years in business
Down payment is required
With its competitive interest rates and willingness to lend to newly established businesses, Taycor Financial may be worth considering for your businesses’ equipment financing needs.
Exchange unpaid invoices for immediate cash, minus a fee. AR financing, also known as “invoice factoring,” may be a good option for risk-averse or poor-credit borrowers.
| APR range | Factor rates starting at 1.12 [shortcode] | |
|---|---|---|
| APR range | Factor rates starting at 1.12 | |
| Loan amount | $5,000 to $10,000,000 | |
| Term (months) | 120 days average repayment | |
| Min. credit score | 550 | |
| Fees | N/A | |
| Time to funding | Within 10 days | |
| Read our Elevation Capital review | ||
$150,000 in annual revenue required
10 days to receive funds
If your business has a steady stream of invoices, Elevation Capital may be able to help you convert those unpaid invoices into cash. Elevation Capital’s accounts receivable financing could be an option for those with lower credit scores, as long as your business meets the minimum revenue and time in business requirements.
A merchant cash advance is a lump sum of funding that businesses repay through their daily transactions.
| APR range | Factor rates starting at 1.1 [shortcode] | |
|---|---|---|
| APR range | Factor rates starting at 1.10 | |
| Loan amount | $5,000 to $400,000 | |
| Term (months) | 3 to 15 months | |
| Min. credit score | 525 | |
| Fees | Origination fee of $499 for funding amounts up to $50,000; No origination fee for higher amounts. | |
| Time to funding | As little as 24 hours | |
| Read our Reliant Funding review | ||
Faster-than-normal repayment terms could lead to higher daily payments
Six months in business required
If your business needs a lump sum of cash upfront, Reliant Funding’s merchant cash advances may be worth exploring. Funding is quick and interest rates are competitive, but be aware that this method of funding involves borrowing against future credit card sales.
Getting a business loan with bad credit can be challenging — but it’s not impossible. However, a lower score can come with higher interest rates and additional requirements from the lender.
| APR range | Factor rates starting at 1.24 | |
|---|---|---|
| APR range | Factor rates starting at 1.24 | |
| Loan amount | $3,000 to $1,000,000 | |
| Term (months) | 2 to 12 months | |
| Min. credit score | 450 | |
| Fees | No fees on MCAs | |
| Time to funding | Could receive on same day requested | |
| Read our Uplyft Capital review | ||
Required to provide three months of past bank statements
Required to deposited at least $12,000 per month
Uplyft Capital looks at more than just your credit score when determining your qualifications to borrow. If you meet their revenue requirements, you may be able to qualify for funding.
If you need fast funding for your business, same day business loans may be a good option for you.
| APR range | 4.66% to 8.99% | |
|---|---|---|
| APR range | 4.66% to 8.99% | |
| Loan amount | Up to $150,000 | |
| Term (months) | 12 to 24 weeks | |
| Min. credit score | 600 | |
| Fees | No origination fee | |
| Time to funding | Next business day after approval | |
| Read our Fundbox review | ||
Must have a business checking account
Must make at least $100,000 in annual revenue
Fundbox can transfer the funds for a line of credit as soon as the next business day after you’re approved — as a trade-off, however, be prepared for shorter repayment times.
Startup business loans may be an option for businesses in operation for less than two years that bring in consistent revenue.
| APR range | Factor rates starting at 1.10 | |
|---|---|---|
| APR range | Factor rates starting at 1.10 | |
| Loan amount | Up to $1,400,000 | |
| Term (months) | Up to 15 months | |
| Min. credit score | 500 | |
| Fees | Origination fee of 2.5% of the loan amount or $300, whichever is higher | |
| Time to funding | 72 hours upon approval | |
| Read our Fora Financial review | ||
No open bankruptcies
Must have at least $12,000 in gross sales
With many lenders requiring a minimum of two years in business, it can sometimes can be hard to get a startup business loan. Fora Financial’s business loan only requires you to be in business for six months to receive funding of up to $1,400,000.
Business expansion loans help you acquire a new business, expand to a new location or even hire more staff.
| APR range | Starting | |
|---|---|---|
| APR range | Factor rate: 1.10 | |
| Loan amount | Up to $500,000 | |
| Term (months) | Up to 60 months | |
| Min. credit score | 600 | |
| Fees | Origination fee 1.00% to 2.00% | |
| Time to funding | 24 hours after approval | |
| Read our National Funding review | ||
Minimum required annual revenue $250,000
Factor rate instead of interest rate makes calculating cost of borrowing confusing
Looking for a loan to help expand your business? National Funding’s business loans could be a great option. A business loan could help you open a new location, hire employees or buy the necessary inventory or equipment needed to scale.
Small business loans help entrepreneurs build, maintain or expand their companies. They can help to purchase inventory, buy new equipment or even cover unexpected expenses.
Getting business loans for your company doesn’t always require walking into a bank to secure the funds — there are also a variety of online small business lenders to consider, which may have easier qualifications and faster applications.
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 as long as 10 years.
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. A flexible lending product, it can be useful for recurring expenses like rent or inventory purchases.
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 allow businesses to purchase, build or renovate property for business uses. They function similar to a home mortgage, but a commercial real estate loan may require a higher down payment upfront.
SBA loans are guaranteed by the U.S. Small Business Administration (SBA), offering long repayment terms with comparatively low interest rates. The 7(a) loan offers up to $5 million for a wide range of business purposes, but the 504/CDC loan is more commonly used for purchasing fixed assets, like equipment or real estate. You’ll apply with a bank or online lender, not directly through the SBA.
Microloans are loans for $50,000 or less. The SBA makes microloans, as do several nonprofit or community organizations. Microloans are often geared towards startups or underrepresented business owners, such as women or people of color.
Working capital loan is an umbrella term for financing used to cover short-term operating expenses, like payroll or covering cash flow gaps. Working capital loans can come in a variety of flavors, like lines of credit, term loans and cash advances.
Invoice factoring is a type of financing that allows a business to unlock cash from unpaid invoices. The business sells the invoices to a factoring company in exchange for a cash advance. This may be a good option for businesses with poor or limited credit, but it can be expensive – you’ll only get 60% to 90% of your invoice value, depending on your industry.
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.
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.
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 grants specifically designated for minority- and women-owned businesses.
Crowdfunding allows you to ask family or friends for donations to help 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 — but be aware that crowdfunding platforms may charge a fee.
Personal loans may be easier to obtain if you’re struggling with the eligibility criteria for a business loan. But, because this relies on your personal credit and income, your personal assets are at risk and it won’t help you build business credit.
Bootstrapping is when you use your own financial resources to fund your business. Startup businesses may use bootstrapping to get off the ground, but the risk is that you may not recoup your investment if your business struggles.
TIME IN BUSINESS
In general, a business that’s been around for a couple of years is more stable than a startup. This is key for lenders, as a business that has a proven track record of revenue over the past two years is a more attractive borrower than a company with spotty revenue over the past six months.
CREDIT SCORE
Your credit score is a data point lenders use to determine your reliability as a borrower. In most cases, you’ll need a credit score in the 600s to qualify for financing, although certain lenders and loan types may allow scores as low as 500.
CASH FLOW
A cash-flow projection shows when money is collected, when cash goes out and what’s left. Lenders typically like to see that the borrower has a thorough understanding of the financial operating cycle of the business.
COLLATERAL
Collateral is an asset that lenders can legally seize if you can’t make payments, including company buildings, equipment and accounts receivable. Some business owners choose to use their personal assets — including their homes — as collateral on a business loan.
DEBT-TO-EQUITY RATIO
Your company’s debt-to-equity (D/E) ratio measures the proportion of your company’s debt divided by shareholders’ equity. This metric helps a lender understand how likely you are to cover new debt based on the debt you’re already paying. While high D/E’s are common in some industries, your goal should be to keep your business’s D/E ratio as low as possible.
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.
We chose small business loans from online lenders that could cover small, medium or large expenses. Small business lenders that appear on this list meet the following criteria:
Business owners can take out small business loans — generally between $5,000 and $500,000 or more — to finance expenses like payroll, 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.
Several types of business loans are available for small business owners, including term loans and business lines of credit for general business expenses. Financing is also available for specific purchases like equipment and commercial real estate. In addition, invoice factoring and accounts receivable financing are available for businesses that collect a high volume of invoices.
Yes, bad credit business loans are available for business owners with personal credit scores as low as 500. However, lenders may assign high interest rates to low-credit borrowers.
A personal guarantee is a common feature of small business loans, which requires the business owner to be personally responsible for their company’s debt in case of default. A personal guarantee lowers the risk for a lender, but for the business owner, it may limit any protections your business structure offers.
Online lenders may be the best option for a startup business loan. They typically require only a few months in business, as opposed to brick-and-mortar banks that often have stricter eligibility requirements. Other options for startup capital include crowdsourcing, self-funding or grant funding.
It depends. Each lender will have its own criteria, sometimes varying based upon the loan type. The lowest interest rates are often reserved for applicants with higher credit scores, however. If this doesn’t fit your business, online lenders may be more lenient with credit score requirements.
If your application for a business loan is denied, revisit the reason why. Focus on repairing your credit if your credit score was too low; if you haven’t operated in business long enough, simply wait until you’re eligible. In the meantime, consider a small business credit card to get access to the capital you need.
Most lenders look for minimum monthly or annual revenue requirements as part of the application eligibility process. While many traditional banks do not publish their minimum revenue requirements to qualify, online lenders tend to be more transparent. It’s not uncommon to expect a minimum annual revenue requirement of $100,000 for unsecured loans, but you may be able to have lower annual revenue if you provide collateral to secure your business loan.
