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Low-Interest Business Loans: Best Options of March 2024

By Randa Kriss
Last updated on February 28, 2024
Edited bySally Lauckner
Fact checked and reviewed

⏰ Estimated read time: 10 minutes

Low-interest business loans are available from bank, SBA and online lenders. You'll need good credit and strong finances to qualify.

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Traditional lenders, like banks and credit unions, tend to offer the lowest interest rates on business loans. The average interest rates on business bank loans range from 5.89% to 12.23%, according to the most recent data from the Federal Reserve.
To qualify for one of these small-business loans, however, you’ll need to be an established business with strong credit and excellent finances.
If you can’t qualify for a bank loan, SBA and online lenders can also offer low-interest business loans — with rates starting as low as 6% — and their requirements may be a little more flexible.
Below, compare some of the best low-interest business loan options and learn how to choose the right financing for your needs.

How much do you need?

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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.

Here are 8 low-interest business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Bank of America Business Advantage Unsecured Term Loan

5.0/5

Best for Bank low-interest business loans

Undisclosed700

SBA 7(a) loan

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Best for Government low-interest business loans

$5,000,000650

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SBA Express loan

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Best for Low-interest business loans for veterans

$500,000650

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Funding Circle - Online term loan

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4.5/5

Best for Fast low-interest business loans

$500,000660

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Accion Opportunity Fund - Small Business Working Capital Loan

4.0/5

Best for Low-interest business loans for startups

$250,000570

Wells Fargo Small Business Advantage® Line of Credit

5.0/5

Best for Low-interest business lines of credit

$50,000680

Triton Capital - Equipment financing

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4.0/5

Best for Low-interest equipment loans

$250,000575

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SBA Microloan

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Best for Low-interest business loans for women and minority groups

$50,000620

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Here are 8 low-interest business loans

Best for Bank low-interest business loans

Bank of America

Max Amount

Undisclosed

Min. Credit Score

700

Best for Government low-interest business loans

U.S. Small Business Administration

Max Amount

$5,000,000

Min. Credit Score

650

Best for Low-interest business loans for veterans

U.S. Small Business Administration

Max Amount

$500,000

Min. Credit Score

650

Best for Fast low-interest business loans

Funding Circle

Max Amount

$500,000

Min. Credit Score

660

Best for Low-interest business loans for startups

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Low-interest business lines of credit

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Best for Low-interest equipment loans

Triton Capital

Max Amount

$250,000

Min. Credit Score

575

Best for Low-interest business loans for women and minority groups

U.S. Small Business Administration

Max Amount

$50,000

Min. Credit Score

620

I'M INTERESTED IN:

Our pick for

Bank low-interest business loans

Bank of America offers a flexible term loan that can be used for a range of purposes. Interest rates vary, but start at 7.75%.

Bank of America Business Advantage Unsecured Term Loan

Max Loan Amount
Undisclosed
Min. credit score
700
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.

Max loan

Undisclosed

Min. Credit score

700

Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.

Our pick for

Government low-interest business loans

SBA 7(a) loans are available in amounts up to $5 million. These loans have long repayment terms and competitive interest rates. You can use a 7(a) loan for working capital, equipment purchases, renovations and more.

SBA 7(a) loan

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Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
11.50-15.00%
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Lowest interest rate

Max loan

$5,000,000

Min. Credit score

650

Apr range

11.50-15.00%

7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.

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Our pick for

Low-interest business loans for veterans

SBA Express loans offer lower loan amounts than the traditional 7(a) loan, but faster funding times. Veteran-owned businesses do not have to pay guarantee fees on Express loans.

SBA Express loan

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Max Loan Amount
$500,000
Min. credit score
650
Est. APR
11.50-15.00%
SBA Express loans are available in amounts up to $500,000 as either a term loan or line of credit. These loans typically fund faster than standard 7(a) loans.

Max loan

$500,000

Min. Credit score

650

Apr range

11.50-15.00%

SBA Express loans are available in amounts up to $500,000 as either a term loan or line of credit. These loans typically fund faster than standard 7(a) loans.

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Our pick for

Fast low-interest business loans

You can get an online term loan from Funding Circle in amounts up to $500,000 with repayment terms up to seven years. Funding can be available in as little as two days.

Funding Circle - Online term loan

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Max Loan Amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly

Max loan

$500,000

Min. Credit score

660

Apr range

15.22-45.00%

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.

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Our pick for

Low-interest business loans for startups

Accion is a nonprofit lender that has more flexible qualification requirements than banks and credit unions. You may be able to qualify for a loan with a minimum of 12 months in business.

Accion Opportunity Fund - Small Business Working Capital Loan

Max Loan Amount
$250,000
Min. credit score
570
Est. APR
8.49-29.67%
Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Max loan

$250,000

Min. Credit score

570

Apr range

8.49-29.67%

Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Our pick for

Low-interest business lines of credit

Wells Fargo’s unsecured line of credit has interest rates as low as the prime rate plus 4.5%. Businesses with less than two years in operation may be able to qualify.

Wells Fargo Small Business Advantage® Line of Credit

Max Loan Amount
$50,000
Min. credit score
680
Est. APR
13.00-15.00%
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Max loan

$50,000

Min. Credit score

680

Apr range

13.00-15.00%

Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Our pick for

Low-interest equipment loans

Triton Capital offers low-interest loans that can be used to purchase equipment and machinery for your business. Loans are available up to $250,000 and funding can be available in just a few days.

Triton Capital - Equipment financing

4.0
NerdWallet rating 

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Max Loan Amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

575

Apr range

5.99-34.99%

Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.

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Our pick for

Low-interest business loans for women and minority groups

The SBA microloan program targets traditionally underserved borrowers, including women, minority groups and those located in low-income communities. Loans are available up to $50,000.

SBA Microloan

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Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.

Max loan

$50,000

Min. Credit score

620

Apr range

8.00-13.00%

SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.

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How Much Do You Need?

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What is a low-interest business loan?

A low-interest business loan is a business loan with rates that are lower than average interest rates. Low-interest loans are usually easiest to get when you have strong personal credit, business history or assets. But some lenders, like certain CDFIs, may have special programs that offer lower interest rates to target demographics that wouldn’t normally qualify for the lowest rates.

Where to get a low-interest business loan

Banks and credit unions

Typically, banks and credit unions offer the lowest rates on business loans — as well as long repayment terms and large loan amounts. Bank of America, for example, offers an unsecured business term loan starting at $10,000 with terms up to five years. Interest rates will vary, but they can start as low as 7.75%.
However, business bank loans are generally the most difficult to qualify for, and they can be slow to fund. You’ll typically need at least two years in business, strong finances and a personal credit score of 700 or higher to get one of these low-interest loans. Banks and credit unions may also require you to put up collateral to secure the loan.
Although you’ll still need strong credit and financials, an existing relationship with a bank or credit union can help you access loans with competitive rates and terms — and it may even speed up the application process.

🤓 Nerdy Tip

In addition to your credit score and business financials, other factors such as the federal funds rate, current market conditions and lender policies, can also influence the interest rate you’re offered.

SBA lenders

SBA loans are partially guaranteed by the U.S. Small Business Administration and issued by lending partners, usually banks and credit unions. The government guarantee reduces the risk for these lenders, making them more likely to work with small businesses.
Although specifics can vary based on the type of loan, SBA loans generally have low interest rates, long repayment terms and large loan amounts — similar to bank loans. The most popular SBA loan program, the 7(a) program, offers loans of up to $5 million with terms up to 25 years, for example.
Per SBA guidelines, interest rates on these loans are based on the market prime rate, plus a markup rate known as the spread. Currently, interest rates on SBA 7(a) loans can range between
11.5
% to
15
%
.
Compared to bank loans, SBA loans may be somewhat easier to qualify for, but in most cases, you’ll still need good credit, solid finances and a few years in business to get financing. These loans are also slow to fund, taking anywhere from one to three months to complete the application and funding process.
If you’re looking for an expedited option, the SBA Express loan can offer loans up to $500,000. All SBA Express lenders have the authority to approve, process and close loans without the SBA’s review.

Online lenders

Some online lenders can offer low-interest business loans. And with streamlined application processes, certain lenders can offer financing in as little as two business days.
For instance, Funding Circle offers term loans up to $500,000 with a repayment period up to seven years. Interest rates will depend on your business’s qualifications, among other factors, but they generally range between
15.22
% to
45
%. You can complete the entire application online, work with an account manager to explore your options and receive funding in just two days.
Typically, online lenders have more flexible requirements than bank or SBA loans. However, to qualify for the lowest rates and most competitive terms from an online lender, you’ll need to be an established business with good credit and strong finances.
Of course, there are online lenders that are willing to work with newer businesses or those with fair or bad credit. Note though, that interest rates on these loans can range significantly — anywhere from 6% to 99% — so you should always compare several different financing options and think carefully about how much debt you can realistically afford.

Nonprofit organizations and microlenders

Nonprofit organizations and microlenders can be another source for low-interest loans. For example, the nonprofit Accion Opportunity Fund offers a working capital loan starting at an interest rate of
8.49
% that may be easier for a small business to qualify for.
Depending on the lender and products offered, loan amounts can be smaller and interest rates may be higher than bank or SBA loans, but these lenders can be a good option if you can’t qualify for those types of funding.
Nonprofits and microlenders tend to focus their lending efforts on traditionally underserved businesses, including women- and minority-owned businesses and those located in low-income communities. Some organizations also work with startups or businesses with bad credit (a score of below 630).
For example, CDC Small Business Finance is a nonprofit that specializes in financing for new and underserved businesses in Arizona, California and Nevada, as well as Atlanta, Dallas-Fort Worth, Detroit, Miami and Washington, D.C. Loans range from $20,000 to $350,000, with terms from five to 10 years and interest rates ranging from the prime rate plus 4.5% to 5%.

Pros and cons of low-interest business loans

Pros

  • Less expensive. Lower interest rates mean the cost of borrowing money is lower, which means your overall repayment amount and monthly payments are usually lower.
  • Can help your business grow. Accessing capital can help promote the growth of your business, but high interest or strict repayment terms can make it more difficult to manage your finances. Because a low-interest loan is a less expensive form of capital, it can aid your business growth whether you’re expanding your staff or refinancing high-interest debt.

Cons

  • Can be harder to qualify. Low-interest loans can be difficult to qualify for if you don’t have good credit and strong business finances.
  • May require collateral. Because offering lower interest rates can be riskier for lenders, they may require higher-value collateral to counter that risk.
  • May have a shorter loan repayment period. Some loans with low interest rates can have shorter repayment periods which can mean higher monthly payments.

How to get a low-interest business loan

1. Evaluate your qualifications

For most low-interest business loans, you’ll need to meet strict eligibility criteria in order to qualify. In general, you should be able to meet the following requirements:
  • Credit score: 650 or higher.
  • Time in business: Two years or more.
  • Annual revenue: $100,000 or more.
You may also need to provide physical collateral.
Specific business loan requirements will vary based on your lender and loan type. Typically, bank loans will be the most difficult to qualify for, followed by SBA and online loans. Nonprofits and microlenders, on the other hand, may be more flexible with their eligibility criteria.

2. Research your options

Once you have a better understanding of your business’s qualifications, you can research and explore different small-business lenders. You’ll want to consider the loan types offered, interest rates, repayment terms, maximum loan amounts and funding speed, among other factors.
If you can qualify, a bank or SBA loan will likely offer the lowest interest rates and most competitive repayment terms. However, both of these types of loans will require a detailed application and will be slow to fund.
Online loans will be a worthwhile alternative if you want faster financing and a streamlined application process.

3. Compare loan offers

You should always compare multiple loan offers to make sure that you’re getting the best deal for your business — especially when you’re looking for the lowest interest rate.
The best way to compare business loan rates is to use the annual percentage rate, or APR. This number includes your interest rate, as well as additional loan fees.
Not all lenders express the cost of their financing as an APR, however. Some may use a simple interest rate or even a factor rate. In this case, you’ll want to calculate the rate into an APR so that you can get a better understanding of how much the loan costs and how it compares to other options.
While getting the lowest interest rate will typically save you on interest expense, you also want to consider the monthly payment requirement and whether the amount fits into your business budget.

Alternatives to low-interest business loans

If you can’t qualify for one of these low-interest business loans — or you simply want to explore alternative options — there are other types of affordable financing you can consider. Here are a few possibilities.

Business grants

Small-business grants are essentially free financing, since you don’t have to repay the money you receive. Grants can be a particularly good option for businesses focused on technology, research and development, and projects in their local community.
However, finding and applying for business grants is often time-consuming and competitive, so this type of financing may not be suitable for all businesses.

Personal loans

If you have good personal credit, but you're just starting your company, you might use a personal loan for your business. Instead of relying on your time in business and revenue, personal loan providers will focus on your income and personal credit history.
These loans also tend to have lower APRs than many online alternative lenders, but defaulting on them could hurt your personal credit score and put your personal assets at risk.

Business credit cards

Business credit cards are a good option for financing recurring or everyday purchases. You can use your credit card to pay for business expenses, plus you can earn rewards — like cash back — for your spending. You’ll want to make sure that you can pay your bill every month, however. Otherwise, you’ll start accumulating interest on your balance.
To qualify for a business credit card, you’ll typically need good personal credit, but you don’t need to have an established business history.

Find the right business loan

The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on February 28, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from both traditional and online lenders. We collect over 30 data points on each lender, taking into account features we consider to be small-business friendly, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices.
Each small-business loan option on this list meets the following criteria:
- Maximum loan amount of at least $50,000. - Transparent rates and repayment terms. - Funding available within two weeks of applying. - Personal credit score requirements of 700 or below. - No more than two years in business required.

Wondering if you qualify?

It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.

Learn more

Frequently Asked Questions

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