Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Rosalie Murphy covers small business topics for NerdWallet. Previously, she led editorial strategy for a local news startup and covered business at The Desert Sun. She holds a journalism degree from the University of Southern California and is currently pursuing an MBA.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
our
Editorial Guidelines.
Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
95+ years of combined
experience covering small-business and personal finance.
50+ categories of best
business loan selections.
Objective and comprehensive business loans ratings rubric
– learn more about our star ratings.
NerdWallet's small-business loans content, including ratings,
recommendations and reviews, is overseen by a team of writers and
editors who specialize in business lending. Their work has appeared in
The Associated Press, The Washington Post, MarketWatch, Nasdaq,
Entrepreneur, ABC News, MSN and other national and local media outlets.
Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
Advertiser disclosure
You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Rosalie Murphy covers small business topics for NerdWallet. Previously, she led editorial strategy for a local news startup and covered business at The Desert Sun. She holds a journalism degree from the University of Southern California and is currently pursuing an MBA.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
our
Editorial Guidelines.
Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
95+ years of combined
experience covering small-business and personal finance.
50+ categories of best
business loan selections.
Objective and comprehensive business loans ratings rubric
– learn more about our star ratings.
NerdWallet's small-business loans content, including ratings,
recommendations and reviews, is overseen by a team of writers and
editors who specialize in business lending. Their work has appeared in
The Associated Press, The Washington Post, MarketWatch, Nasdaq,
Entrepreneur, ABC News, MSN and other national and local media outlets.
Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
Advertiser disclosure
You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
When you’re self-employed, a small-business loan can provide funds to help you manage or grow your operations. Getting a self-employed business loan, however, isn’t always easy. Lenders may ask sole proprietors or freelancers for additional documentation to prove that their income is reliable.
Below, learn more about the best loan options for sole proprietors and self-employed business owners and how to get the right financing for your needs.
Who qualifies as self-employed?
The term self-employed generally means that you work for yourself as opposed to an employer. According to the IRS, self-employed individuals can fall into any of the following categories:
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Best Business Loans for the Self-Employed and Sole Proprietors
Accepts borrowers with a minimum credit score of 625.
Streamlined application process with minimal documentation required.
Can be used to build business credit.
Cons
Not available in North Dakota.
May require frequent weekly payments.
Interest rates can be high compared with traditional lenders.
OnDeck’s fast line of credit is a standout option for small-business owners with less-than-stellar credit who need working capital. This line of credit offers flexible repayment options, allowing you to choose between three term options and a weekly or monthly frequency. It’s also a good option for borrowers who don’t want to risk their company assets; OnDeck’s line of credit does not require physical collateral and it doesn’t take a UCC lien out on your business.
Charges a factor rate that makes it more difficult to compare costs with other lenders.
Can’t build business credit.
Longest loan term is 18 months.
Charges an origination fee.
Fora Financial stands out as a fast funding option for borrowers who may fall short of qualifying for traditional bank financing. The lender can work with startups and borrowers with bad credit — as long as they have strong revenue. Fora offers large maximum loan amounts and can provide prepayment discounts for those who repay early.
In business for at least six months.
At least $20,000 per month in revenue.
No open bankruptcies or dismissed bankruptcies within the past year.
Specifically designed for freelancers and self-employed individuals.
Cons
Funding maxes out at $10,000 ($20,000 for repeat customers).
Factor rate and fee information not available on website.
Charges an origination fee.
Giggle Finance is specifically designed to offer small amounts of capital to freelancers, contractors and self-employed individuals. The company provides same-day funding through a simple application process. Giggle is also a standout option for borrowers with bad credit — as the company does not check your credit and instead uses your bank information to underwrite your application.
Minimum credit score: All credit scores may be accepted (ranging from 300 to 850).
Minimum time in business: Three months.
Minimum annual revenue: $18,000.
Accion Opportunity Fund Small Business Working Capital Loan
Slower processing speed compared with online lenders.
Charges an origination fee.
Not available in all U.S. states.
Accion Opportunity Fund (AOF) stands out as an affordable option for business owners who can’t qualify for traditional financing. AOF offers competitive interest rates, long repayment terms and flexible qualification requirements. Startups and borrowers with bad credit may qualify. This lender also targets its funding efforts toward minority-, women- and low-to-moderate-income entrepreneurs.
Designed to finance traditionally underserved businesses.
Startups and business owners with bad credit may be able to qualify.
Competitive interest rates, low fees and long repayment terms.
Intermediaries typically offer business training and educational resources.
Cons
Loan amounts max out at $50,000.
Can’t be used to pay existing debt or purchase real estate.
Collateral is likely required.
Slow funding timeline.
SBA microloans are funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders. Microloans stand out as a choice for traditionally underserved businesses, such as startups, women-owned companies and businesses located in low-income communities. Although SBA microloans only provide up to $50,000, they offer competitive interest rates and repayment terms. They also have flexible eligibility requirements — making them a good option for borrowers who can’t qualify for other business loans.
Be a U.S. business.
Show your ability to repay the loan.
Personal guarantee and collateral likely required.
Specific financial qualifications determined by individual lender.
Bank of America Business Advantage Unsecured Term Loan
Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
Can be slow to fund.
Prepayment fees may apply to early repayments.
Must be an existing Bank of America customer to apply online.
Charges an origination fee.
Bank of America’s unsecured term loan offers competitive interest rates and flexible repayment terms — with no collateral required. This loan can help established businesses with good credit expand their operations, purchase equipment or make other long-term investments. Preferred Rewards members may be able to access discounted rates.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
Accepts borrowers with a minimum credit score of 625.
Streamlined application process with minimal documentation required.
Can be used to build business credit.
Cons
Not available in North Dakota.
May require frequent weekly payments.
Interest rates can be high compared with traditional lenders.
OnDeck’s fast line of credit is a standout option for small-business owners with less-than-stellar credit who need working capital. This line of credit offers flexible repayment options, allowing you to choose between three term options and a weekly or monthly frequency. It’s also a good option for borrowers who don’t want to risk their company assets; OnDeck’s line of credit does not require physical collateral and it doesn’t take a UCC lien out on your business.
Accepts borrowers with a minimum credit score of 625.
Streamlined application process with minimal documentation required.
Can be used to build business credit.
Cons
Not available in North Dakota.
May require frequent weekly payments.
Interest rates can be high compared with traditional lenders.
OnDeck’s fast line of credit is a standout option for small-business owners with less-than-stellar credit who need working capital. This line of credit offers flexible repayment options, allowing you to choose between three term options and a weekly or monthly frequency. It’s also a good option for borrowers who don’t want to risk their company assets; OnDeck’s line of credit does not require physical collateral and it doesn’t take a UCC lien out on your business.
Charges a factor rate that makes it more difficult to compare costs with other lenders.
Can’t build business credit.
Longest loan term is 18 months.
Charges an origination fee.
Fora Financial stands out as a fast funding option for borrowers who may fall short of qualifying for traditional bank financing. The lender can work with startups and borrowers with bad credit — as long as they have strong revenue. Fora offers large maximum loan amounts and can provide prepayment discounts for those who repay early.
In business for at least six months.
At least $20,000 per month in revenue.
No open bankruptcies or dismissed bankruptcies within the past year.
Charges a factor rate that makes it more difficult to compare costs with other lenders.
Can’t build business credit.
Longest loan term is 18 months.
Charges an origination fee.
Fora Financial stands out as a fast funding option for borrowers who may fall short of qualifying for traditional bank financing. The lender can work with startups and borrowers with bad credit — as long as they have strong revenue. Fora offers large maximum loan amounts and can provide prepayment discounts for those who repay early.
In business for at least six months.
At least $20,000 per month in revenue.
No open bankruptcies or dismissed bankruptcies within the past year.
Specifically designed for freelancers and self-employed individuals.
Cons
Funding maxes out at $10,000 ($20,000 for repeat customers).
Factor rate and fee information not available on website.
Charges an origination fee.
Giggle Finance is specifically designed to offer small amounts of capital to freelancers, contractors and self-employed individuals. The company provides same-day funding through a simple application process. Giggle is also a standout option for borrowers with bad credit — as the company does not check your credit and instead uses your bank information to underwrite your application.
Minimum credit score: All credit scores may be accepted (ranging from 300 to 850).
Specifically designed for freelancers and self-employed individuals.
Cons
Funding maxes out at $10,000 ($20,000 for repeat customers).
Factor rate and fee information not available on website.
Charges an origination fee.
Giggle Finance is specifically designed to offer small amounts of capital to freelancers, contractors and self-employed individuals. The company provides same-day funding through a simple application process. Giggle is also a standout option for borrowers with bad credit — as the company does not check your credit and instead uses your bank information to underwrite your application.
Minimum credit score: All credit scores may be accepted (ranging from 300 to 850).
Minimum time in business: Three months.
Minimum annual revenue: $18,000.
Accion Opportunity Fund Small Business Working Capital Loan
Slower processing speed compared with online lenders.
Charges an origination fee.
Not available in all U.S. states.
Accion Opportunity Fund (AOF) stands out as an affordable option for business owners who can’t qualify for traditional financing. AOF offers competitive interest rates, long repayment terms and flexible qualification requirements. Startups and borrowers with bad credit may qualify. This lender also targets its funding efforts toward minority-, women- and low-to-moderate-income entrepreneurs.
Minimum credit score: 600.
Minimum time in business: 12 months.
Minimum annual revenue: $50,000.
Accion Opportunity Fund Small Business Working Capital Loan
Slower processing speed compared with online lenders.
Charges an origination fee.
Not available in all U.S. states.
Accion Opportunity Fund (AOF) stands out as an affordable option for business owners who can’t qualify for traditional financing. AOF offers competitive interest rates, long repayment terms and flexible qualification requirements. Startups and borrowers with bad credit may qualify. This lender also targets its funding efforts toward minority-, women- and low-to-moderate-income entrepreneurs.
Designed to finance traditionally underserved businesses.
Startups and business owners with bad credit may be able to qualify.
Competitive interest rates, low fees and long repayment terms.
Intermediaries typically offer business training and educational resources.
Cons
Loan amounts max out at $50,000.
Can’t be used to pay existing debt or purchase real estate.
Collateral is likely required.
Slow funding timeline.
SBA microloans are funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders. Microloans stand out as a choice for traditionally underserved businesses, such as startups, women-owned companies and businesses located in low-income communities. Although SBA microloans only provide up to $50,000, they offer competitive interest rates and repayment terms. They also have flexible eligibility requirements — making them a good option for borrowers who can’t qualify for other business loans.
Be a U.S. business.
Show your ability to repay the loan.
Personal guarantee and collateral likely required.
Specific financial qualifications determined by individual lender.
Designed to finance traditionally underserved businesses.
Startups and business owners with bad credit may be able to qualify.
Competitive interest rates, low fees and long repayment terms.
Intermediaries typically offer business training and educational resources.
Cons
Loan amounts max out at $50,000.
Can’t be used to pay existing debt or purchase real estate.
Collateral is likely required.
Slow funding timeline.
SBA microloans are funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders. Microloans stand out as a choice for traditionally underserved businesses, such as startups, women-owned companies and businesses located in low-income communities. Although SBA microloans only provide up to $50,000, they offer competitive interest rates and repayment terms. They also have flexible eligibility requirements — making them a good option for borrowers who can’t qualify for other business loans.
Be a U.S. business.
Show your ability to repay the loan.
Personal guarantee and collateral likely required.
Specific financial qualifications determined by individual lender.
Bank of America Business Advantage Unsecured Term Loan
Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
Can be slow to fund.
Prepayment fees may apply to early repayments.
Must be an existing Bank of America customer to apply online.
Charges an origination fee.
Bank of America’s unsecured term loan offers competitive interest rates and flexible repayment terms — with no collateral required. This loan can help established businesses with good credit expand their operations, purchase equipment or make other long-term investments. Preferred Rewards members may be able to access discounted rates.
Minimum credit score: 700.
Minimum time in business: 24 months.
Minimum annual revenue: $100,000.
Bank of America Business Advantage Unsecured Term Loan
Best for Established self-employed business owners
Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
Can be slow to fund.
Prepayment fees may apply to early repayments.
Must be an existing Bank of America customer to apply online.
Charges an origination fee.
Bank of America’s unsecured term loan offers competitive interest rates and flexible repayment terms — with no collateral required. This loan can help established businesses with good credit expand their operations, purchase equipment or make other long-term investments. Preferred Rewards members may be able to access discounted rates.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
Where to get business loans for sole proprietors and self-employed individuals
In general, self-employed individuals, such as sole proprietors and independent contractors, can access the same types of business loans as larger companies — provided they have proof of steady income.
Financing is available from:
Banks and credit unions
Banks and credit unions typically offer the lowest interest rates and most competitive repayment terms. These lenders can provide a variety of financing options, including both term loans and lines of credit.
To qualify, however, you’ll likely need at least two years in business and good credit (often a score of 700 or higher). Some banks may also require you to secure your loan with physical collateral, such as equipment or real estate.
SBA lenders
SBA loans are issued by participating lenders, like banks and credit unions, and partially guaranteed by the U.S. Small Business Administration. The most popular SBA loan, the 7(a) loan, offers funding up to $5 million and repayment terms up to 25 years.
SBA 7(a) loans can be a good option for purchasing equipment, making renovations, expanding to a new location and buying inventory or supplies, among other uses. Although these loans may be slightly easier to qualify for than bank loans, you’ll still need good credit and finances to get funding.
Online lenders can be a good option for those who can’t qualify for bank or SBA loans, as well as for those who want financing quickly. These lenders offer streamlined applications with minimal documentation and may fund applications in as little as 24 hours.
Online lenders typically have lenient qualification requirements and may be able to work with startups or borrowers with bad credit. As a result of their speed and flexibility, however, online lenders often charge higher interest rates and offer shorter repayment terms.
Nonprofit and community lenders
Nonprofit and community lenders usually focus their lending efforts on traditionally underserved businesses, such as those owned by women, minority groups or veterans. These lenders have flexible qualification requirements, but still offer competitive interest rates and repayment terms.
Some lenders also participate in the SBA microloan program, which offers loan amounts up to $50,000. Nonprofit and community lenders can be a particularly good option for self-employed individuals who are looking for business training — in addition to funding. Many of these organizations provide business training and coaching, among other resources.
Merchant cash advance companies
Merchant cash advance companies provide you with an upfront sum of capital that you repay using a percentage of your debit and credit card sales, plus fees — otherwise known as a merchant cash advance, or MCA. MCAs are usually fast to fund and easy to qualify for, but can be expensive, with APRs reaching triple digits.
Merchant cash advances are typically used by businesses that bring in significant credit and debit card sales. Generally, however, you’ll want to consider all other options before turning to an MCA.
How to get a business loan if you’re self employed
Self-employed individuals are typically held to the same lending standards as more established businesses, which can make the loan application process difficult.
From a lender’s perspective, self-employed business owners are often riskier to fund compared to employer-based businesses. For sole proprietorships or partnerships, there’s no legal separation between the business owner and the business itself. As a result, the business owner’s personal assets could be at a greater risk if their business is sued or runs into financial trouble. This may hurt their ability to make loan payments on time, even if they meet the lenders’ requirements.
To put yourself in the best position to get a self-employed business loan, keep these tips in mind:
Show consistent revenue
Although lenders will also consider your personal credit and time in business when evaluating your loan application, it’s particularly important to show consistent revenue as a self-employed business owner. Lenders want to feel confident that you’ll be able to repay your debt. To help illustrate your revenue, you may need to provide:
Personal and business bank statements.
Tax forms, with Schedule C and SE included.
1099 forms.
Business financial statements, such as balance sheets, profit and loss statements and cash flow statements.
Bolster your loan application
You can improve your loan application by offering collateral, a down payment or adding a cosigner. Offering collateral or a down payment, especially when it’s not required, can help make your application more attractive to lenders.
Similarly, adding a cosigner can give the lender additional security that someone will repay your debt in the case of default. Typically, you’ll want to add a cosigner that has strong credit and personal assets.
Compare multiple lenders
You should research and compare multiple lenders to determine which company can give you the best offer. You’ll want to consider factors such as maximum loan amounts, interest rates, repayment terms, funding speed and application process.
You may also want to refine your search to look for lenders that work specifically with freelancers and independent contractors. Working with one of these companies, like Giggle Finance, for example, may increase your chances of approval.
Utilize expert resources
As a sole proprietor or self-employed business owner, it can be difficult to manage loan applications while running your business. Local business organizations can assist you through the process, often at little or no cost. Professionals at these organizations can help you prepare your financial statements and other application documents, answer questions and provide additional resources.
Alternative funding options for self-employed individuals
Here are some alternative financing options that sole proprietors and self-employed individuals might consider for their businesses:
Business credit cards
A business credit card is a simple way to quickly unlock a small amount of financing and can help you establish a business credit history to qualify for larger loans in the future. Credit limits, interest rates and annual fees on business credit cards can vary depending on each applicant's credit history. Like personal credit cards, some business credit cards offer rewards such as cash back, 0% APR introductory periods or travel points and miles.
To apply, you’ll need information about your personal finances since you may have to personally guarantee the debt. Be prepared to provide the details about your business, too, including the legal structure, estimated monthly spending and employer identification number.
Personal business loans can be a solid source of funding for self-employed individuals who haven’t been in business long enough to qualify for a business loan, want to avoid online lenders’ high interest rates or lack the collateral to secure a business loan.
You can qualify for a personal loan based on your credit score and income. If you can’t repay one of these loans, however, your personal credit and assets will be at risk. Additionally, traditional business loans usually offer larger loan amounts and longer repayment terms than personal loans.
Crowdfunding
If your business has a large online or social media presence, crowdfunding can be a good way to get capital. With crowdfunding, you create a campaign on an online platform and interested individuals can donate to your business. Typically, you offer a reward (e.g. exclusive products, access to events) or equity in exchange for these donations.
A successful crowdfunding campaign requires active maintenance, however, and online platforms may take a cut of your proceeds.
Additional resources for self-employed business owners:
See Your Loan Options