If you’re a small business owner, whether you’re just getting started or have had your business for years, a small business loan can give you the capital you need to grow. But with so many different lenders and loan types on the market (including Small Business Administration or SBA loans), it can be challenging to know where to start.
We’ve rounded up a dozen of the best small business loans to help you narrow your search and find the perfect lending partner to help take your business to the next level.
Methodology
From their requirements to their uses and beyond, small business loans come in all shapes and sizes. So, to determine the best lenders, our editorial and data research teams cast a wide net. We judged 26 of the most popular small business lenders across 35 different features to arrive at out-of-five star ratings. View our complete methodology below.
- Number of companies reviewed: 26
- Number of data points analyzed: 884
- Number of features we considered: 35
- Number of primary data sources used: 31
Loan amount
$5,000 to $250,000
Via OnDeck’s Website
Credibly
Why we picked it
Credibly offers various loan types, a wide range of loan amounts and low credit score requirements, among other features. Available loan types include government small business loans (or SBA loans), working capital loans, merchant cash advances, long-term loans, business lines of credit, equipment financing and invoice factoring.
You can quickly pre-qualify for a loan by entering information on the lender’s website. And if you complete your more formal application, you could have the loan funds in your bank account the same business day.
Credibly does have a few downsides to consider. First, it has strict eligibility requirements, including being in business for at least six months and verifying $180,000 in annual revenue. You’ll also be limited to relatively short repayment terms — Credibly’s long-term loans span 18 or 24 months — and you’ll pay loan fees that could include origination fees as well as underwriting and monthly charges.
Pros
- Many business loan types
- Low minimum credit score
- Pre-qualification with no credit impact
- Same-day funding
Cons
- Repayment terms capped at 2 years
- Charges origination, underwriting and monthly fees
- Requires six months in business
- High revenue requirement
Who should consider it
Small and medium-sized, revenue-generating businesses of any credit profile who want fast loan funding.
*Rates as of Nov. 20, 2023
Accion Opportunity Fund
Best for women and minority business owners
Why we picked it
The Accion Opportunity Fund is a worthwhile option for small business loans if you run a women-owned or minority-owned business or want to support one: 90% of Accion’s loans go to borrowers who identify as a woman or person of color or have low income. And because of Accion’s nonprofit status and unique lending model, the funds you repay on your loan are reinvested into other small businesses.
Accion comes with various repayment terms: 1, 2, 3 or 5 years. There are also unique perks, including business advising services for less-experienced business owners.
That being said, Accion isn’t right for everyone. First, you can’t get a loan through Accion if your business is in Montana, North Dakota, South Dakota, Tennessee or Vermont. Additionally, Accion doesn’t offer the variety of loan types that most lenders do. Accion also doesn’t disclose its eligibility requirements, so you won’t know if you qualify until you fill out an application.
Pros
- Nonprofit lender that uses proceeds to support other small businesses
- Provides educational resources, coaching and support
- Customized loans and repayment schedules
Cons
- Doesn’t disclose eligibility requirements
- Doesn’t offer business lines of credit — term loans only
- Not available in all states
Who should consider it
Women- and minority-owned small businesses who want to support other small business owners.
*Rates as of Nov. 20, 2023
American Express Business Blueprint
Why we picked it
If you want a line of credit for your business, consider American Express Business Blueprint. American Express has a lower revenue requirement than many other lenders — you’ll only need $36,000 in annual revenue. Lines of credit through American Express are also relatively affordable, thanks to no origination or underwriting fees. There are low monthly fees, only charged on the portion of your credit line you actually use.
However, American Express isn’t available to brand-new businesses. You’ll need to be in business for at least one year before you can qualify, and you must provide a personal guarantee for the credit line. Additionally, American Express may not be appropriate if you want a long repayment term since repayment is limited to three options: 6, 12 or 18 months.
Pros
- Low rates for short repayment terms
- Low monthly revenue requirement
- No origination or prepayment fees
- Low fees, and only on the amount of your credit line you use
Cons
- Requires one year in business
- Repayment terms capped at 24 months
- Requires a personal guarantee
Who should consider it
Borrowers with low monthly revenue (as low as $3,000) who want an origination fee-free business line of credit on a short repayment term.
*Rates as of Nov. 20, 2023
Fora Financial
Best for a prepayment discount
Why we picked it
Fora Financial is a great option for businesses that need a large sum of money and want fast funding. Loan amounts go up to $1.5 million, which is considerably higher than most small business lenders. Additionally, you can expect a lending decision in between four and 24 hours, and if you’re approved, you can receive your funds in 24 to 72 hours.
Fora Financial stands out, however, because it offers a discount if you pay off your loan early. That’s quite the contrast from other lenders that may impose a prepayment penalty when you repay your debt ahead of schedule.
Fora Financial isn’t right for businesses that are just getting started. The lender requires at least one year in business and a monthly revenue of at least $15,000. Additionally, despite their high loan amounts, Fora Financial only offers financing terms of up to 15 months.
Pros
- Low credit score requirement
- High loan amounts available
- Offers an early payoff discount
- Fast approval and funding
Cons
- Charges a 2.5% processing fee
- Repayment terms limited to 15 months
- Requires one year in business
- High monthly revenue requirement
Who should consider it
Businesses that want large loan amounts and fast funding.
*Rates as of Nov. 20, 2023
Reliant Funding
Best for merchant cash advances
Why we picked it
Reliant Funding is a great option if you want a merchant cash advance, which is financing tied to your future income. This lender’s advances run the gamut in loan amount, from four to seven figures.
Reliant also has more flexible requirements than many lenders. You can qualify with a credit score as low as 525 and an annual revenue as low as $60,000. However, because your loan amount is based on future revenue, your maximum loan amount may be limited if you have low revenue.
There are some downsides to consider. First, you’ll have to make daily or weekly payments on your loan rather than monthly ones. The company’s website also lost points for its sometimes confusing and misleading marketing language, publicizing some loan types that may not actually be available, for example. It also doesn’t disclose some key information, such as loan APRs and fees.
Pros
- Large loan amounts
- Low credit score and monthly revenue requirements
- Funding in as little as 24 hours
Cons
- Requires daily or weekly payments
- Limited loan information on website
- Not all loan types currently available
Who should consider it
Borrowers who want high-limit merchant cash advances.
Uplyft Capital
Why we picked it
If you have a poor credit score and need capital for your business, consider Uplyft Capital. In addition to lines of credit and SBA loans, Uplyft offers merchant cash advances in amounts ranging from $5,000 to $500,000. Cash advances come with repayment terms from two months to one year, but all are renewable.
Most notably, Uplyft has the lowest credit score requirement of any lender on our list, though the company confirmed to CNN Underscored Money in mid-November 2023 that it recently raised its minimum criteria from 450 to 500 for merchant cash advances.
Uplyft Capital requires businesses to have at least six months under their belts and at least $12,000 per month of revenue, meaning you won’t qualify if you’re a new business. Additionally, Uplyft’s merchant cash advances may be more expensive than some competitors.
Pros
- Low credit score requirement
- Same-day loan funding
- Renewal available on cash advances
- SBA loans, lines of credit available
Cons
- High monthly revenue requirement
- Repayment terms limited to 12 months
- High factor rate
Who should consider it
Borrowers with poor credit who want a merchant cash advance.
*Rates as of Nov. 20, 2023
Rapid Finance
Why we picked it
Rapid Finance offers various loan types, including lines of credit, small business loans, merchant cash advances, bridge loans, SBA loans, invoice factoring and asset-based loans. The maximum loan limit varies by loan type, but some loan programs offer up to eight-figure loans.
The main highlight, however, is that Rapid Finance can fund your loan in hours after approval, not days as is typical. Just keep in mind that time to funding varies by loan type, with traditional small business loans and merchant cash advances available closer to 24 hours.
As a downside, Rapid Finance has strict repayment rules. Not only does it require either daily or weekly payments, but it also mandates automatic payments. Rapid Finance doesn’t disclose its interest rates, which makes it challenging to shop around. It also doesn’t display its minimum credit score requirements, though Rapid Finance reviews usually list it as 550.
Pros
- Funding within a few hours
- Various loan types and amounts
Cons
- Doesn’t disclose interest rates or minimum credit score
- Daily or weekly payments may be required
- Requires automatic payments
Who should consider it
Borrowers whose top priorities include large loan amounts or fast funding.
Triton Capital
Best for equipment financing
Why we picked it
Though it also offers SBA loans and other financing options, Triton Capital is one of the best small business lenders for equipment financing. You can borrow up to $250,000 for any type of equipment and pay it off over one to five years. And unlike other lenders, Triton Capital lets you pay monthly, quarterly, seasonally, semi-annually or annually. Loans are typically approved within hours and may land in your bank account as soon as the next business day.
Despite its myriad benefits, Triton Capital has some downsides. Its website lacks transparency, meaning you can’t learn about its loan fees, maximum interest rates or eligibility requirements without going through the preapproval process.
Pros
- Multiple loan types
- Financing for any equipment type
- Low minimum APR
Cons
- Doesn’t disclose maximum APR
- Doesn’t disclose eligibility requirements
Who should consider it
Borrowers in any industry who need equipment financing.
*Rates as of Nov. 20, 2023
National Funding
Best for mid-sized businesses
Why we picked it
National Funding offers small business loans and equipment financing for mid-sized businesses with annual sales of at least $250,000. This lender offers high loan amounts — you can get up to half a million dollars and have your loan funded in just one business day. There’s also an early payoff discount, so you can save on interest when you repay your loan ahead of schedule.
National Funding isn’t appropriate for very small businesses, as it has a high minimum revenue requirement, and you’ll need at least six months in business before you qualify. Additionally, National Funding requires daily payments on loans, which may not work for all businesses.
Pros
- High loan limits
- Low minimum credit score
- Offers an early payoff discount
- Loan funding in 24 hours
Cons
- High annual revenue requirement
- Requires daily payments
- Doesn’t disclose interest rates
Who should consider it
Mid-sized businesses with at least a quarter of a million dollars in annual revenue that want short-term financing.
SMB Compass
Why we picked it
SMB Compass is the best small business lender for large loans, with amounts spanning $10,000 to $10 million. Exact amounts vary by loan type, including term loans, lines of credit, equipment financing, inventory financing and invoice financing.
SMB Compass offers competitive rates on many of its loans and some of the longest loan terms you’ll find, such as 10 to 25 years on SBA loans; two to 25 years for business term loans; and up to 10 years for equipment financing.
On the other hand, SMB Compass isn’t right for everyone. First, the lowest loan amount is $10,000, which is more than some small businesses may need. Secondly, you’ll need good or excellent credit and annual business revenue of at least $500,000 to qualify. And while the minimum business history is just six months, SMB Compass generally looks for businesses that have been around for at least two years.
Pros
- Competitive APRs
- High loan amounts
- Many loan types to choose from
Cons
- Requires good or excellent credit
- High revenue requirement
- Slow funding time for some loans
Who should consider it
Businesses with solid revenue and good credit that want to borrow large loan amounts.
*Rates as of Nov. 20, 2023
Biz2Credit
Best for flexible loan options
Why we picked it
Biz2Credit offers flexible loan options — you can choose between either working capital or a term loan. Qualifying for working capital is relatively easy — you’ll only need six months in business and a credit score of 575. You can also borrow up to $2 million in working capital or $500,000 in term loan funds. Each loan type has multiple repayment options, including daily, weekly, bimonthly, and monthly.
Unfortunately, the requirements for a term loan are quite a bit steeper. You’ll need at least 18 months in business and a credit score of at least 660. Both loan types also require high business revenue of at least $250,000. Finally, Biz2Credit’s starting interest rates on term loans are quite high compared to competitors (15.99% and up), meaning your loan is likely to cost more.
Pros
- Flexible repayment options
- Large loan amounts
- Low credit score requirement
Cons
- High revenue requirement
- Requires 18 months in business for term loan
- High minimum APR on term loans
Who should consider it
Borrowers who want flexibility in loan amounts, loan types and repayment schedules.
*Rates as of Nov. 20, 2023
SmartBiz
Why we picked it
SmartBiz isn’t a direct lender, but rather a lending marketplace. When you apply for a small business loan through its platform, it recommends lending options that fit your needs.
Though SmartBiz helps to facilitate several loan types, it’s especially well suited to SBA loans. In fact, on its website, it claims to be a leading facilitator of SBA loans (by volume) under $500,000.
SmartBiz also has a few downsides. First, because it’s not a direct lender, it can’t necessarily guarantee the loan product you’re getting. You may be happy with your experience with SmartBiz, but then have a bad experience with your direct lender. Additionally, SmartBiz has steep eligibility requirements — you’ll need at least fair credit and two years in business to qualify.
Pros
- Leading facilitator of SBA loans below $500,000
- Multiple loan types to choose from
- High loan amounts
Cons
- Requires two years in business
- Not a direct lender
- Requires fair credit
Who should consider it
Borrowers who want to see SBA loan options from multiple lenders.
*Rates as of Nov. 20, 2023
Our picks at a glance
Why get a small business loan?
- Start a business: If you’re just getting started, a small business loan can provide the capital you need to establish your venture and fund the upfront costs.
- Expand your operations: If you already have a business, a small business loan can help you expand. You might finance another location or acquire a second business.
- Buy or upgrade equipment: Small business loans are commonly used to buy or upgrade vital business equipment. No matter what type of business you run, chances are there’s a piece of equipment that would be useful.
- Access working capital: A small business loan or line of credit can give you working capital to help manage your cash flow. It can help finance your day-to-day business expenses, from inventory to accounts payable.
- Refinance business debt: If your business already has debt, especially if it’s at a high interest rate, a small business loan can help you refinance it at a more affordable rate.
Types of small business loans
There are many types of small business loans for startups and established businesses. The first decision you’ll have to make is whether to get an SBA loan or a non-SBA small business loan, which some people mistakenly use interchangeably.
An SBA loan is a small business loan that’s backed by the Small Business Administration. Because the SBA backs these loans, lenders can offer them to more business owners and at more competitive rates.
However, there are plenty of small business funding options that aren’t SBA loans. Here are some examples:
- Term loan: It’s an installment loan with a fixed interest rate and repayment term. It may be best suited to large purchases and growth opportunities.
- Business line of credit: This revolving credit line can provide ongoing financing for businesses, similar to a credit card. It can help businesses manage their cash flow or finance long-term projects.
- Commercial real estate: A business might use this product to purchase commercial real estate. Just like when you use a mortgage to buy a home, the loan is secured by the property itself.
- Microloan: This is a term loan for a small amount, typically $50,000 or less. Businesses that might need microloans are very small businesses.
- Franchise loan: If you’re considering opening your own franchise, you might consider a franchise loan. Many lenders offer this financing option, and there are even SBA loans for franchises.
- Invoice factoring: It’s a type of financing where you sell your accounts receivable — meaning not-yet-paid invoices — in exchange for cash. You get the money upfront and the lender gets your unpaid invoices.
- Invoicing financing: Similar to invoice factoring, it allows you to use your accounts receivable to get a loan. But instead of selling the invoices outright, you simply use them as collateral for the loan.
- Equipment financing: If you’re planning to purchase equipment for your business, you would use this financing type. It can be used to purchase equipment of all kinds and at all price points.
- Merchant cash advance: Similar to invoice financing, it lets you leverage future revenue to help you get funds. You receive a loan amount that’s based on your projected sales and then make frequent — often daily — payments on the loan.
- Personal loans for business: A personal loan isn’t a business loan at all. Instead, a business owner might take out a personal loan in their own name and use the proceeds to fund their business expenses. Keep in mind that many personal loan lenders prohibit this practice.
- Business credit cards: If you need a financing tool to manage your cash flow, a business credit card might be right for you. It’s a revolving credit line, meaning you can continually use and repay the card for business expenses. You may even be able to earn rewards for your business spending.
Pros and cons of small business loans
Small business loans can provide plenty of benefits when you’re trying to start or grow a company. These loans can help speed up your growth by years, compared to the time it would take if you simply used your existing cash flow to expand.
Additionally, there are various types of business loans (see above), many of which can be used for nearly any purpose in your business. This flexibility is key when you’re in the growth years of your business.
However, small business loans also have some downsides. First, the application process may be more intensive than what you’re used to with a loan for personal use. You’ll need to prove a certain number of months or years in business, must meet certain business or sales revenue metrics and may even need to provide a personal guarantee on behalf of your business.
Requirements to qualify for a small business loan
Eligibility requirements vary by lender, but there are some common themes you can expect to encounter when you’re shopping for a loan:
- Credit scores: Lenders may look at both your personal and business credit scores to determine your loan eligibility. Some lenders require good credit, while others may offer loans to borrowers with poor credit.
- Gross revenue: Most lenders have a minimum monthly or annual revenue requirement. These minimum requirements generally range from $36,000 to $500,000 per year.
- Years in business: It’s common for lenders to require that you’re in business for at least six months before getting a loan, but some lenders may require one or two years instead.
- Personal financial history: As a business owner, lenders may look at your personal finances in addition to your business finances when determining loan eligibility.
- Industry type: Some lenders only work with businesses in select industries or have certain industries they won’t lend to. For example, you may have a harder time getting a loan in industries like cannabis, cryptocurrency, adult entertainment and gambling.
- Business plan: Lenders may require that you provide a business plan that outlines projected revenues and income sources.
- Loan proposal: It’s a pitch that tells the lender how you’ll use the funding, how it will benefit your business and how you’ll repay the debt. Though not all lenders require a loan proposal, some may.
- Down payment: Some business loans may require a down payment, especially if you’re getting a loan to purchase an asset such as equipment or commercial real estate.
- Collateral: If you’re applying for a secured business loan, you’ll have to provide collateral like a financial account or physical asset.
- Personal guarantee: This essentially tells a lender that if your business can’t repay its loan, you can be held responsible for it.
- Debt-service coverage ratio: Just like a personal lender will calculate your debt-to-income ratio, a business lender will calculate your business’s debt-to-cash-flow ratio and will likely have a maximum.
- Documentation: When you apply for your business loan, be prepared to provide documentation like financial statements.
How to get a small business loan
- Determine your loan needs. Before applying for a loan, decide how much you need to borrow and which type of loan is best suited to your situation. Consider how you plan to use the funds, how quickly you need them and how fast you’d like to repay the debt.
- Assess your business finances. Evaluate your business’s credit, revenue and assets. Also, take a look at your personal finances, as many lenders will examine your personal credit scores and reports to determine eligibility.
- Shop around. Before settling on a single lender, browse various options (including your current financial institution, which might offer loyalty rewards) and narrow your list down to several that fit your needs. Some lenders may even allow you to pre-qualify for a loan, meaning you can get an idea of whether you’ll qualify without it impacting your credit.
- Gather financial documents. As you prepare to apply for a small business loan, gather your business licenses, business plan, financial statements, tax returns and more. Consult your lender to get a final list of documents needed.
- Complete the application. Depending on your lender, you may be able to apply either online or in person with a loan officer. Loan approval can take anywhere from minutes to days.
- Finalize your loan agreement. Once your loan is approved and you sign your loan agreement, you’ll get your funds, which typically happens as quickly as the same business day.
Methodology
To make apples-to-apples comparisons and find the best small business loan, our editorial team designed a rubric to score widely available lenders across the following four categories. We weighted the “rates” and “loan details” categories heaviest, believing that business owners care most about their bottom line. That said, “eligibility” and “repayment experience” also received sizable influence in the out-of-5-star rating.
Rates (30%)
Rates determine the cost of your loan, but they can be hard to parse in the world of small business loans, where some lenders advertise APRs, some offer factor rates and others don’t publicly share terms at all. In this category, we rewarded lenders for low and transparent rates, offering pre-qualification or preapproval and providing discounts.
Loan details (30%)
Given the sheer variety of small business loans, much of this category was dedicated to scoring lenders higher for offering flexible options, including the widespread SBA program. We also reviewed these companies’ fees (origination and otherwise), loan amount ranges and time to funding.
Eligibility (20%)
Here, lenders scored better than competitors if their eligibility requirements were shared publicly and they didn’t unnecessarily exclude borrowers based on factors like credit score, years in business and revenue. We also considered these financial institutions’ rules for requiring collateral, personal guarantees and down payments.
Repayment experience (20%)
After you borrow a small business loan, you’ll want to work with a lender that will help you along in repayment. That’s why we considered not only repayment terms and options but also the lender’s customer service. The Better Business Bureau and Consumer Financial Protection Bureau, among other primary sources, helped us get to the bottom of whether past and current customers were satisfied with each of the lenders under review.
What didn’t make the cut
A dozen of the 26 lenders we put under the microscope made our list of the best small business loans. Here are three examples of lenders that fell short.
Frequently asked questions (FAQs)
A secured business loan requires collateral, such as a financial account or physical asset, such as real estate or equipment. An unsecured loan, on the other hand, doesn’t require collateral. Whether you need a secured or unsecured loan depends on the purpose of the loan and your creditworthiness. You’re more likely to qualify for an unsecured business loan if you have strong business and personal credit scores.
Many small business lenders use both your business and personal finances to determine your loan eligibility. Lenders may require that you have a certain personal credit score to qualify. Not only does a good credit score improve your chances of qualifying, but it can also help you get a lower interest rate.
There are many small business loans for startups. However, if you’re truly just getting off the ground, you may have a more challenging time getting a loan, since many lenders require six months to two years in business to qualify, plus a minimum revenue or sales amount.
Unfortunately, defaulting on your business loan can have negative consequences for both your business and personal finances. First, you’ll see a negative impact on your business and personal credit scores. You also may have assets seized, especially in the case of a secured loan. If you provided a personal guarantee on the loan, a lender may be able to come after your personal assets to recover its loan funds.
It may be challenging to get a business loan if your business is not yet (or no longer) profitable since many lenders require a minimum revenue or sales figure or a certain amount of time in business.
However, there are select lenders that offer loans before you’ve seen a profit or before you have any business history. This type of loan will be based on your personal credit and finances rather than your business’s.
