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.
Here are 4 of the best private business loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
Bluevine - Line of credit with Fundera by NerdWallet | 5.0/5 Best for business lines of credit | $250,000 | 625 | with Fundera by NerdWallet |
Fora Financial - Online term loan | 4.7/5 Best for short-term loans | $1,500,000 | 570 | with Fundera by NerdWallet |
National Funding - Equipment Financing | 4.6/5 Best for equipment financing | $150,000 | 600 | with Fundera by NerdWallet |
Expansion Capital Group Merchant Cash Advance | Best for merchant cash advances | $300,000 | 500 | with Fundera by NerdWallet |
Here are 4 of the best private business loans
Best for business lines of credit
Best for short-term loans
Best for equipment financing
Best for merchant cash advances
I'M INTERESTED IN:
Our pick for
business lines of credit
Why we chose it: Bluevine can provide revolving access to up to $250,000 through its business line of credit to cover a variety of business expenses. Its online application may take just minutes to complete and applicants may be approved for funding the same day. Bluevine’s business requirements are easy to qualify for compared to bank lines of credit, making it an ideal choice for new small-business owners seeking private business financing.
Bluevine - Line of credit
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Bluevine - Line of credit
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: 12 months.
- Minimum annual revenue: $120,000.
- No bankruptcies in the past year.
Our pick for
short-term loans
Why we chose it: Fora Financial offers short-term loans with repayment terms up to 18 months. Its fast funding time and low credit score requirement make it a good choice for small-business owners seeking a fast private business loan they can repay quickly.
Fora Financial - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- 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 - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- 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.
Qualifications:
- 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.
Our pick for
equipment financing
Why we chose it: National Funding allows small-business owners to access up to $150,000 to invest in essential equipment needed to keep the lights on. It offers tailored support and funding in as little as 24 hours after being approved.
National Funding - Equipment Financing
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
National Funding - Equipment Financing
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: Six months.
- Minimum annual revenue: $250,000.
Our pick for
merchant cash advances
Why we chose it: Expansion Capital Group offers fast funding with flexible qualification requirements. Like all merchant cash advances, however, this product may be expensive. Expansion Capital Group offers a good last-resort private business financing option for cash-strapped business owners with a poor credit score and not many other options to turn to. The company has garnered high average review scores on both Google and Trustpilot.
Expansion Capital Group Merchant Cash Advance
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
- Offers prepayment discounts.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
- Charges an origination fee and a monthly servicing fee.
Expansion Capital Group Merchant Cash Advance
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
- Offers prepayment discounts.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
- Charges an origination fee and a monthly servicing fee.
Qualifications:
- Minimum credit score: 500.
- Minimum time in business: Six months.
- Minimum annual revenue: $100,000.
What is a private business loan?
How to compare private business loans
- Use of proceeds. Think about how you plan to use the loan. If you’re looking for ongoing access to funds, a working capital line of credit may be the best fit. On the other hand, if you need to purchase equipment, you might want to get an equipment loan. Some lenders restrict how you can use a loan, so make sure your needs fit into any eligibility guidelines.
- Loan terms. Terms can vary widely on private business loans. Short-term loans may be easier to qualify for, but you’ll be making larger payments over an abbreviated period of time. Long-term loans can help lower your payment amount, but you may pay more in interest over the total loan period.
- Repayment schedule. Some private business loans may require daily or weekly payments, which can restrict your cash flow. Make sure that you can afford and manage the payment frequency before taking on new debt.
- Interest rates. Business loan rates on private business loans can range anywhere from 6% to 99% annual percentage rate. And private lenders may charge interest differently, so calculating costs into an APR allows you to make a straightforward comparison between options. In general, the stronger your qualifications, the lower interest rates you’ll receive. Offering collateral, providing a down payment or getting a cosigner can also help you get the best rates.
- Funding time. Private business lenders typically rely on online applications and automated underwriting to provide quick funding. Speed and convenience can come with a price, however; these lenders often charge higher interest rates and provide shorter repayment terms. If you can afford to wait, slower funding options (like microloans, for example) may offer better rates.
- Lender reputation. Reading online reviews can help you get a sense of what it’s like to work with a particular small-business lender. Keep an eye out for predatory lenders who make “too good to be true” claims, such as guaranteed approval or no credit check.
Pros and cons of private business loans
Wide range of loan types to choose from.
Easier to qualify for than traditional bank loans.
Streamlined application processes and fast funding times.
May have higher interest rates and shorter repayment terms.
Limited person-to-person customer support.
Can have a greater risk of predatory lending and loan scams.
How to get a private business loan
1. Evaluate your funding needs
2. Review your qualifications
3. Compare private business lenders
4. Gather your documents and apply
- Basic information about you and your business.
- Personal and business bank statements.
- Personal and business tax returns.
- Financial statements (e.g., profit and loss statement, balance sheet).
Types of private business loans
Business term loans
Business lines of credit
Invoice factoring
Equipment financing
Merchant cash advances
Alternatives to private business loans
- Bank and credit unions loans. These traditional lenders typically provide the lowest interest rates and most competitive repayment terms. You’ll likely need strong credit and at least two years in business to qualify. Compared with private business loans, credit union and bank business loans are also slower to fund.
- SBA loans. SBA loans are partially guaranteed by the U.S. Small Business Administration and issued by participating lenders, such as banks and credit unions. Like bank loans, SBA loans offer competitive interest rates and long repayment terms. Although SBA loans may be slightly easier to qualify for than bank loans, you’ll still need to have good credit and a solid business track record to get funding.
- Microloans. These small-dollar loans are available in amounts up to $50,000. Microloans are issued by nonprofit and community organizations. These lenders tend to have more flexible qualification requirements than banks or credit unions, but still offer competitive rates and terms. Microlenders may also provide business training and other educational resources.
- Friends and family loans. Business loans from friends and family may be an option if you can’t qualify for other types of financing. There’s not usually a formal application process with these loans — and your friends and family may be willing to offer low interest rates or no interest at all. To prevent tension in your relationships, you’ll want to make sure you create a formal loan agreement.
Methodology
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.