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Bankrate uses a careful methodology to select the top lenders for small business loans. You can compare the main features and pros and cons easily.
Click "get personalized rates" and fill out some information to see what loans you may be qualified for.
Bankrate will show you which lenders you match with. You can choose one and apply if you are qualified.
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OnDeck may be a good fit for businesses that want a short-term loan. It has relaxed eligibility requirements compared to other lenders and even offers same-day funding. This is especially useful for companies that need fast capital.
What to know
OnDeck requires applicants to have a minimum personal credit score of at least 625 and a minimum annual revenue of $100,000. However, you will not need a personal guarantee to qualify.
Business Credit Score: N/A
Personal Credit Score: 625
Personal guarantee requirement: No
Minimum time in business requirement: 1 year
Minimum business annual revenue: $100,000
In addition to fast funding and fair loan terms, you can apply for a loan with Fora Financial without impacting your credit. Fora does a soft pull when you apply, and it only conducts a hard credit check after you've been preapproved. This makes it highly popular for borrowers shopping around with several different lenders at once.
What to know
To qualify for a loan with Fora Financial, you'll need a personal credit score of at least 570. Your company will also need to be in business for at least six months and have a minimum of $240,000 in annual revenue. With that said, the company does not require a personal guarantee for loans.
Business Credit Score: N/A
Personal Credit Score: 570
Personal guarantee requirement: No
Minimum time in business requirement: 6 months
Minimum business annual revenue: $240,000
Flexible repayment terms help iBusiness Funding stand out. Loan terms range anywhere from six months to 30 years, giving business owners an opportunity to access capital and repay in a way that fits their business.
What to know
iBusiness Funding requires applicants to have a personal credit score of at least 660, but only requires a business credit score of 400 or above. You'll need to be able to prove your company has been in business for at least 2 years, which is a longer timeframe than other lenders require. However, applicants only need $50,000 in annual revenue to qualify.
Business Credit Score: N/A
Personal Credit Score: 600
Personal guarantee requirement: No
Minimum time in business requirement: 6 months
Minimum business annual revenue: $100,000
Fundbox only requires three months in business and $30,000 in revenue to qualify for one of its loans. It offers fast approval and flexible repayment terms on its lines of credit, making it a good option for newer businesses that are just getting up and running.
What to know
Business owners hoping to get a loan from Fundbox will need a personal credit score of at least 600 and they will need to be in business for at least six months. Applicants will also need at least $100,000 in annual revenue to qualify.
Business Credit Score: 400
Personal Credit Score: 660
Personal guarantee requirement: No
Minimum time in business requirement: 2 years
Minimum business annual revenue: $50,000
Borrowers can qualify for American Express's Business Blueprint line of credit with just $3,000 in monthly revenue — provided the business has been operation for at least a year and the owners have fair credit.
What to know
You will need a personal guarantee to get a small business loan from American Express, along with a personal credit score of at least 660. With that in mind, you will only need an annual business revenue of $36,000, which is lower than other lenders on our list.
Business Credit Score: N/A
Personal Credit Score: 660
Personal guarantee requirement: Yes
Minimum time in business requirement: 1 year
Applicants need only a minimum credit score of 550 to qualify for a loan with Credibly. Loans can be funded in as little as one business day, making Credibly a good option for business owners who don't have good credit but still need quick access to working capital.
What to know
You will need an annual business revenue of $300,000 to qualify for a loan with Credibly, which is considerably more than other lenders we looked at. You will also need a personal credit score of at least 550 and be in business for at least six months.
Business Credit Score: N/A
Personal Credit Score: 550
Personal guarantee requirement: No
Minimum time in business requirement: 6 months
Minimum business annual revenue: $300,000
Bank of America is one of the country's oldest and most well-known financial institutions. While there are plenty of competitive online lenders on the market, Bank of America has both physical branch location and online services. For those who value real-time guidance through the loan process, this is exceptionally helpful.
What to know
Bank of America has one of the highest personal credit score requirements on our list, with applicants needing a score of at least 700 to qualify. You will also need to be in business for at least two years with an annual revenue of $100,000 or more.
Business Credit Score: N/A
Personal Credit Score: 700
Personal guarantee requirement: No
Minimum time in business requirement: 2 years
Minimum business annual revenue: $100,000
Wells Fargo is our pick for small business loans for borrowers with good-to-excellent credit. It operates in most states and offers competitive rates on its lines of credit and term loans, making it a good fit for business owners who meet its credit requirements, regardless of their stage of growth.
What to know
Wells Fargo does not disclose their annual revenue requirements for most of their small business loans; however, you will need a personal credit score of at least 680 and you will need a minimum of two full years in business to qualify.
Business Credit Score: 680
Personal Credit Score: 680
Personal guarantee requirement: No
Minimum time in business requirement: 2 years
Minimum business annual revenue: $100,000
Since 1994, the Accion Opportunity Fund has been providing far more than just loans to budding small businesses. The community development financial institution (CDFI) also offer hands-on advising for business owners and webinars about a variety of topics related to entrepreneurship. Like all CDFIs, Accion specifically targets small-businesses that are located in or serve underserved communities.
What to know
Accion Opportunity Fund does not specify their personal credit score requirements, and they do not require a personal guarantee. However, you will need to have been in business for at least one year and have a minimum annual revenue of $50,000 before you are eligible for a loan.
Business Credit Score: N/A
Personal Credit Score: N/A
Personal guarantee requirement: No
Minimum time in business requirement: 1 year
Minimum business annual revenue: $50,000
National Funding stands out from competitors due to its fair lending terms, high loan amounts and minimal eligibility requirements. In addition to no early payoff penalty, National Funding offers an early payoff discounts, which is novel in the small business loans space.
What to know
To qualify for a loan with National Funding, you’ll need a personal credit score of at least 660 and be in business for 12 months or more. The company requires applicants to have at least $250,000 in annual revenue.
Business Credit Score: N/A
Personal Credit Score: 660
Personal guarantee requirement: Yes
Minimum time in business requirement: 6 months
Minimum business annual revenue: $250,000
Taking on too much debt can quickly spell the end for your business, especially if you have a low-revenue month or are low on cash reserves. Before you apply for a loan, it’s a good idea to assess your debt-to-income ratio and use a business loan calculator to determine how much you’re comfortably able to borrow.
In general, you shouldn’t borrow more than 36% of your business’ annual income. This counts for all debts you hold, so keep this in mind if you have multiple loans and balances.
Keep in mind that business loans can have daily, weekly or monthly payments, and taking on a payment schedule and amount that you can handle can prevent you from missing payments or defaulting on your loan.
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There are several types of small business loans to choose from. Some have more stringent requirements than others, particularly those offered by traditional banks. But online lenders typically have options available for new businesses and business owners with fair or bad credit.
The most common type of business loan among startups and established companies, term loans let you borrow a lump sum to cover business expenses. You then repay the loan over the agreed-on repayment term with interest. Term loans are accessible through most banks and credit unions, and loan amounts range from $1,000 to the millions.
To qualify for a term loan, you’ll likely have to generate a sizable amount of revenue and provide a personal guarantee to qualify for funding. Plus, you can expect higher borrowing costs if you’re starting out in your business.
Best for:
The most common type of business loan among startups and established companies, term loans let you borrow a lump sum to cover business expenses. You then repay the loan over the agreed-on repayment term with interest. Term loans are accessible through most banks and credit unions, and loan amounts range from $1,000 to the millions.
To qualify for a term loan, you’ll likely have to generate a sizable amount of revenue and provide a personal guarantee to qualify for funding. Plus, you can expect higher borrowing costs if you’re starting out in your business.
Best for:
Lines of credit provide access to a pool of funds you can repeatedly draw from up to your credit limit. While a term loan charges interest on the total borrowed amount the moment you receive funds, with a line of credit, you only pay interest on the funds you use. You also have the flexibility to withdraw more funds as you have more credit available, such as after you repay past loans.
There are drawbacks, including the limited draw period or time frame that you get to access the line of credit before it closes. The upside is that some lenders allow you to make interest-only payments during the draw period, which can be beneficial if you’re trying to get your company’s cash flow back on track.
Best for:
Backed by the Small Business Administration, SBA loans are loan products featuring competitive rates and generous loan terms to meet the needs of small business owners. They’re accessible through SBA-approved lenders you can locate through the SBA Lender Match Tool, but they come with a few downsides.
Though the SBA’s intention is to provide small business owners with the funding they need, SBA loans come with an application process that’s challenging to navigate. Plus, it could be several months before the loan proceeds are disbursed to you.
Best for:
Equipment loans let business owners purchase business-related equipment such as machinery, office furniture, tools and computers. This type of loan can be beneficial if you don’t have the funds available to cover the costs of vital resources to keep your business operating efficiently.
Business owners should consider equipment loans for several reasons. Since the equipment acts as collateral for the loan, interest rates tend to be more favorable compared to unsecured term loans. Lenders are also more likely to approve startups and bad credit borrowers, making equipment loans accessible to more business owners.
Best for:
Both invoice financing and invoice factoring allow you to borrow against your unpaid receivables. They’re both accessible types of business loans, often open to startups and bad-credit borrowers. To get approved for these loans, lenders are more concerned with the creditworthiness and repayment history of your invoiced clients.
There’s a key difference between the two. Invoice financing involves receiving an advance of your company’s accounts receivables that you’ll repay the amount borrowed (plus fees) once the client pays you.
If you choose invoice factoring, you’ll sell the outstanding invoices directly to the lender in exchange for a lump sum of up to 90 percent of what’s owed. The client will pay the lender directly, and any amount that remains after fees are deducted will be distributed to you.
Best for:
These loans are available as SBA-approved microloans or through non-profits, banks and online lenders offering their own microloan programs. With most microloans, you can access up to $50,000 in working capital or startup funding for your business.
These loans tend to relax eligibility requirements by accepting lower credit scores, making them a more accessible type of loan. Some lenders will also offer mentoring and resources to help your business succeed beyond finances.
You can use a commercial real estate loan to purchase or lease a physical space for your company. Some lenders offer up to $5 million in funding with extended repayment periods and competitive interest rates.
Qualifying may be difficult if you’re starting out or your revenue is on the lower end. Plus, you can expect a lengthy application process.
Merchant cash advances are a type of bad credit business loan that charges a flat fee, called a factor rate. The dee is payable to the lender through a percentage of your daily or weekly sales — this means if you're having a slow period, you could wind up with very little working capital. These typically come with faster repayment terms of a year or less, and may end up costing significantly more than comparable loans.
From lines of credit to microloans, find the right lending product for your unique business needs.
Learn moreThere are a huge variety of loans, lending products and lenders to choose from in the business loan sphere. Which one is right for your business will depend on your needs, limits and priorities. Here’s what you should consider.
| If your most important deciding factor is… | …then you should consider |
|---|---|
| Interest rate |
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| Funding flexibility |
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| High amounts |
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| Low amounts |
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| Ease of approval |
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| Speed of approval |
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Small business loans can be used for a variety of purposes, making them a versatile and popular lending product.
Learn moreSmall business loans are available from lenders, including banks, credit unions, online lenders and community lenders. Each type of lender has its own requirements that business owners will need to meet. Research your options because the interest rates and application processes vary widely between lenders.
Variety of lending products.
More personalized service.
Typically lower interest rates.
Opportunity to build a relationship with the lender.
May have strict qualification requirements.
Customer service can be difficult to access.
Often has much slower approval times.
Lower interest rates and fees.
More personalized service.
Focused on local small business and community needs.
Business hours and locations can be limited.
Products may be limited.
Slower approval times.
Fast approval timeline.
24/7 availability and service.
Lower interest rates and fees.
Lacks opportunity for building a relationship.
May be unavailable in certain states.
Lending products may be limited.
Limited interest rates.
Variety of loan and line of credit options.
Lower credit requirements.
Can be difficult to qualify for.
Long approval times.
Stricter business qualifications.
Fixed interest rates and fees.
Non-profit focused.
Offers opportunities for underserved communities
Limited funds.
Competitive to apply for.
Unique requirements.
A business loan makes sense when it helps a company grow or overcome a business challenge without creating unsustainable level of debt. Taking out a loan can be a very prudent way to raise capital, assuming the business has a strong credit profile, consistently positive cash flows and a well-defined plan for using the money and repaying the debt.Thomas Brock: CFA, CPA
When you’re comparing the best business loans, it’s important to take multiple factors into consideration.
Decide which features of a loan are most important for your business, such as flexible terms or startup support, and then take a closer look at Bankrate's list of best small business loans.
Each lender has its own set of eligibility criteria for small business loans. That said, you’ll want to keep some general guidelines in mind as you research your options and prepare to apply for a business loan.
Most lenders will typically evaluate the following to determine if you’re a good fit for a small business loan:
Getting the capital your business needs doesn’t have to be complicated. Let Bankrate walk you through the process and help you find the right loan for you.
How much you can borrow can depend on the lender and loan type, as well as your business’s features and finances: time in business, annual revenue amounts, credit score and so on. Because startups pose more of a risk to borrowers, their borrowing limits may be lower.
It can be hard to get a small business loan if you struggle to meet minimum requirements. If you meet the lender's funding requirements, you may be able to avoid difficulties when seeking small business funding. It helps to research borrowers to find possible good fits before formally applying so you’ll know what to expect.
A good or excellent credit score is ideal when applying for a small business loan to qualify for a competitive interest rate. But some lenders offer funding to bad credit borrowers. Some lenders accept personal credit scores starting at 500, but many lenders require a score in the 600s or higher. Be mindful that a bad credit score means your interest rates will likely be higher.
This varies widely by lender. Many require an annual minimum revenue of $100,000. But you can find lenders that offer loans for businesses with at least $30,000 to $50,000 in revenue. The lender may still be willing to work with you if you don't quite meet the revenue requirement but have other signs of good financial health.
The total cost of a business loan includes repaying the amount you borrow, plus interest and fees charged by the lender. Annual percentage interest rates (APRs) can start as low as seven percent for a standard term loan for a business with solid credit, but can get up to 99 percent or higher based on variables with your financial standing. Fees can also differ by the lender. They may include origination or closing fees that add hundreds of dollars to your loan cost.
You could be disqualified from getting a business loan if you don’t meet the lender’s minimum lending requirements. Those usually include a minimum credit score, time in business and revenue threshold. You could also be disqualified if you don’t have enough of a down payment, can't provide collateral or if your finances show a recent decline in revenue.
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Access to small business funding is a challenge for many business owners. Rate hikes and bank turmoil have led to lenders tightening credit standards and eligibility requirements. This tightened lending environment can make it difficult for startups, bad-credit borrowers and business owners in underserved areas to get approved for small business loans.
Our experts consider several factors in this category and award higher scores to lenders that offer flexible loan amounts, fast approval and funding and inclusive time in business and annual revenue requirements.
The affordability of a business loan often depends on a business owner's financial profile. A business with high revenue and a flexible budget will likely be able to afford most loan options. Businesses considered high risk, such as startups or those with bad credit, may struggle to find affordable loans with low interest rates and reasonable fees.
We consider a business loan affordable if the payments are manageable, you have the lowest possible rate based on your creditworthiness and there are minimal fees. Lenders that have lower rates, offer rate or fee discounts and have minimal fees receive higher scores.
A good customer experience requires a lender to be transparent, efficient and responsive. Reputable lenders that value their customers are easy to communicate with, responsive to your questions and concerns and willing to go the extra mile to make sure you have a positive experience for the life of the loan.
Lenders offering online accounts and applications and a range of customer support availability score higher in this category.
While the Truth in Lending Act (TILA) protects consumers against unfair or harmful lending practices, it doesn’t apply to business loans. This lack of legal protection makes it harder to get straightforward and upfront information on loan costs when comparison shopping. We score lenders that clearly state their rates and fees, as well as eligibility and credit score requirements, higher than those who do not disclose information.
Loan flexibility is finding a loan to meet your needs, even if you don’t have high annual revenue, several years in business or the best credit score. Loan flexibility can look like lenders that offer multiple lending products, variety in loan terms or unique options to give business owners the opportunity to fund their businesses in a way that works for them.
Lenders scoring high in this category offer varied products and services to cater to all types of borrowers and businesses.
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