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Here are 7 of the best low-interest business loans, at a glance
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for Government-backed financing | $5,000,000 | 650 | with Fundera by NerdWallet |
Bank of America Business Advantage Unsecured Term Loan | 4.8/5 Best for Bank term loans | Undisclosed | 700 | Read Review |
Wells Fargo Small Business Advantage® Line of Credit | 4.7/5 Best for Business lines of credit | $50,000 | 680 | Read Review |
Accion Opportunity Fund - Small Business Working Capital Loan | 4.6/5 Best for Bad credit | $250,000 | 570 | Read Review |
SBA Microloan with Fundera by NerdWallet | Best for Startups | $50,000 | 620 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Fast funding | $500,000 | 660 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.1/5 Best for Equipment financing | $250,000 | 575 | with Fundera by NerdWallet |
Here are 7 of the best low-interest business loans, at a glance
Best for Government-backed financing
Best for Bank term loans
Best for Business lines of credit
Best for Bad credit
Best for Startups
Best for Fast funding
Best for Equipment financing
I'M INTERESTED IN:
Our pick for
Government-backed financing
SBA 7(a) loans are available in amounts up to $5 million. These loans have long repayment terms and interest rates that range from 11.5% to 15%. You can use a 7(a) loan for working capital, equipment purchases, renovations and more.
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
11.00-14.50%
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
Low interest rate
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
11.00-14.50%
SBA 7(a) loans are available in amounts up to $5 million. These loans have long repayment terms and interest rates that range from 11.5% to 15%. You can use a 7(a) loan for working capital, equipment purchases, renovations and more.
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
Qualifications:
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Low interest rate
Our pick for
Bank term loans
Bank of America offers a flexible unsecured term loan that can be used for a range of purposes. Interest rates vary, but start at 8.50%. Members of Bank of America’s Preferred Rewards program may also qualify for an interest rate discount.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- 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.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Bank of America offers a flexible unsecured term loan that can be used for a range of purposes. Interest rates vary, but start at 8.50%. Members of Bank of America’s Preferred Rewards program may also qualify for an interest rate discount.
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- 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.
Qualifications:
- Minimum credit score: 700.
- Minimum time in business: Two years.
- Minimum annual revenue: $100,000.
Our pick for
Business lines of credit
Wells Fargo’s unsecured line of credit is available in amounts up to $50,000 with a five-year revolving term. Interest rates range from 13% to 15%. 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
12.50-13.50%
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Wells Fargo Small Business Advantage® Line of Credit
Max loan amount
$50,000
Min. credit score
680
Est. APR
12.50-13.50%
Wells Fargo’s unsecured line of credit is available in amounts up to $50,000 with a five-year revolving term. Interest rates range from 13% to 15%. Businesses with less than two years in operation may be able to qualify.
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Qualifications:
- Minimum credit score: 680.
- Available to borrowers with less than two years in business.
- Household personal liquid assets must be less than $500,000.
- Must meet standard SBA loan requirements.
Our pick for
Bad credit
Accion offers loans of up to $250,000 with repayment terms of five years. Interest rates range from 8.49% to 24.99%. As a nonprofit lender, Accion has more flexible qualification requirements than banks and credit unions. You may be able to qualify for a loan with a minimum credit score of 570.
Accion Opportunity Fund - Small Business Working Capital Loan
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Accion Opportunity Fund - Small Business Working Capital Loan
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
Accion offers loans of up to $250,000 with repayment terms of five years. Interest rates range from 8.49% to 24.99%. As a nonprofit lender, Accion has more flexible qualification requirements than banks and credit unions. You may be able to qualify for a loan with a minimum credit score of 570.
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.
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Qualifications:
- Minimum credit score: 570.
- Minimum time in business: 12 months.
- Minimum annual revenue: $50,000.
Our pick for
Startups
The SBA microloan program provides traditionally underserved borrowers (including startups) with affordable financing up to $50,000. Although interest rates are set by individual lenders, they typically range from 8% to 13%. So far in fiscal year 2024, a quarter of SBA microloans have been issued to startups.
SBA Microloan
Max loan amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
Pros
- Can be used for a variety of funding purposes.
- 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 Microloan
Max loan amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
The SBA microloan program provides traditionally underserved borrowers (including startups) with affordable financing up to $50,000. Although interest rates are set by individual lenders, they typically range from 8% to 13%. So far in fiscal year 2024, a quarter of SBA microloans have been issued to startups.
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Pros
- Can be used for a variety of funding purposes.
- 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.
Qualifications:
- 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.
Our pick for
Fast funding
You can get an online term loan from Funding Circle in as little as two days. Loans are available in amounts up to $500,000 with repayment terms up to seven years. Interest rates range from 15.22% to 45%.
Funding Circle - Online term loan
Max loan amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
Cons
- Requires business lien and personal guarantee.
- Must be in business for a minimum of two years.
- Minimum credit score is higher than some other lenders.
May fund quickly
Funding Circle - Online term loan
Max loan amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
You can get an online term loan from Funding Circle in as little as two days. Loans are available in amounts up to $500,000 with repayment terms up to seven years. Interest rates range from 15.22% to 45%.
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
Cons
- Requires business lien and personal guarantee.
- Must be in business for a minimum of two years.
- Minimum credit score is higher than some other lenders.
Qualifications:
- Minimum credit score: 660.
- Minimum time in business: Two years.
- Minimum annual revenue: $50,000.
- No bankruptcies in the past seven years.
May fund quickly
Our pick for
Equipment financing
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. Interest rates range from 5.99% to 34.99%.
Triton Capital - Equipment financing
4.1
NerdWallet rating with Fundera by NerdWallet
Max loan amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
- Typically requires a personal guarantee and UCC lien.
- Requires high minimum annual revenue.
Triton Capital - Equipment financing
NerdWallet rating
4.1/5
Max loan amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
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. Interest rates range from 5.99% to 34.99%.
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
- Typically requires a personal guarantee and UCC lien.
- Requires high minimum annual revenue.
Qualifications:
- Minimum credit score: 575.
- Minimum time in business: Two years.
- Minimum annual revenue: $250,000.
What is a low-interest business loan?
A low-interest business loan is simply a loan with lower-than-average rates. It’s easier to get a cheap business loan if you have a high personal credit score, have been in business for several years and have a track record of strong business revenue.
Some lenders, like certain CDFIs, however, may have special programs that offer lower interest rates to target demographics that wouldn’t normally qualify for the lowest rates.
🤓 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.Types of low-interest business loans
These are some of the most common types of low-interest business loans:
A business term loan provides a lump sum of cash that you repay with interest over a set period of time. A fixed monthly payment amount is common, although some lenders may require weekly or daily payments.
Business term loans can be used for various purposes such as equipment and inventory purchases, working capital and debt refinancing. Longer term loans typically come with a lower interest rate than shorter term loans.
A business line of credit allows you to access money as you need it, up to a set limit, only paying interest on what you borrow. You typically make a minimum payment on a monthly or weekly basis that includes interest and a percentage of the outstanding balance.
Business lines of credit are often used for short-term needs, such as purchasing inventory, covering payroll expenses and managing cash-flow. Just beware that like personal lines of credit and credit cards, some business lines have variable interest rates, meaning the rates go up or down based on market conditions. Variable interest rates tend to start out lower than fixed rates for similar loans, but that low rate isn’t guaranteed forever.
SBA loans are term loans and lines of credit that are partially guaranteed by the U.S. Small Business Administration and offered through lenders who partner with the SBA. These loans typically require monthly payments that include principal and interest.
They can be used for a variety of purposes including short- and long-term working capital, and buying supplies, equipment and commercial real estate. Because SBA loans are partially guaranteed by the government and their interest rates are capped, they tend to have lower rates compared to conventional business loans.
Microloans are small-business loans with amounts up to $50,000. They generally work like a typical term loan with funds distributed as lump sums and repayment with interest over a set period of time.
Microloans can be used for a variety of purposes such as covering daily operating expenses, inventory needs and large asset purchases such as machinery and equipment. Because microloans are smaller in size and tend to be funded by nonprofits or the SBA, they often come with low interest rates.
Equipment loans are similar to term loans except that they are specifically designed for the purchase of equipment, machinery and other assets that are necessary for running your business.
Equipment loans can offer some of the lowest interest rates because they are typically secured by the equipment you purchase. This lowers the risk for the lender by allowing them to take possession of the asset if you default on the loan.
Pros and cons of cheap business loans
Pros
Lower interest rates mean the cost of borrowing money is smaller, so your total repayment amount and monthly payments are usually lower.
Because a low-interest loan is a cheaper form of capital, it can aid your business growth.
Cons
Can be harder to qualify for if you don’t have good credit and strong finances.
Lower rates can be riskier for lenders, so they may require higher collateral to counter the risk.
How to get a low-interest business loan
The best loan for your business will typically be the one that you can qualify for that offers the lowest rates.
Where to get a cheap business loan
Banks and credit unions
Banks and credit unions typically offer the lowest rates on business loans — as well as long repayment terms and large loan amounts. To qualify, however, you’ll need to meet strict eligibility requirements. Business bank loans are also usually slow to fund.
It can be helpful to start your loan search by contacting a bank with which you have an established relationship. Some banks, especially local or community institutions, may be more flexible with their requirements if they’re already familiar with your business.
SBA lenders
SBA lenders, usually banks and credit unions, offer SBA loans in addition to their own business loans. The government guarantee reduces the risk for these lenders, making them more likely to work with small businesses.
SBA loans generally have low interest rates, long repayment terms and large loan amounts — similar to bank loans. Although SBA loans may be somewhat easier to qualify for, you’ll still need a good credit and financial history 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.
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 revenue.
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 business loans.
Depending on the lender and loans 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 $10,000 to $350,000, with terms from six to 10 years and interest rates ranging from the prime rate plus 4.5% to 5%.
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.
Last updated on September 9, 2024
Methodology
NerdWallet’s review process evaluates and rates small-business loans from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
To come up with our list of the best cheap business loans, we selected lenders with low APRs and strong NerdWallet star ratings.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
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.
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