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 5 of the best private business loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
OnDeck - Online term loan with Fundera by NerdWallet | 4.7/5 Best for Short-term loans | $250,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit Read Review | 4.9/5 Best for Business lines of credit | $150,000 | 600 | Read Review |
AltLINE - Invoice Factoring Read Review | 4.4/5 Best for Invoice factoring | $10,000,000 | 300 | Read Review |
JR Capital Equipment Financing | 4.1/5 Best for Equipment financing | $10,000,000 | 620 | with Fundera by NerdWallet |
Expansion Capital Group Merchant Cash Advance | Best for Merchant cash advances | $300,000 | 500 | with Fundera by NerdWallet |
Here are 5 of the best private business loans
Best for Short-term loans
Best for Business lines of credit
Best for Invoice factoring
Best for Equipment financing
Best for Merchant cash advances
I'M INTERESTED IN:
Our pick for
Short-term loans
OnDeck offers short-term loans with repayment terms up to 24 months. These loans are a good option for specific investments in your business.
OnDeck - Online term loan
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
OnDeck - Online term loan
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: One year.
- Minimum annual revenue: $100,000.
- Must have business bank account.
Our pick for
Business lines of credit
Fundbox can provide revolving access to working capital through its business line of credit. You may be able to get funding as soon as the next business day.
Fundbox - Line of credit
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Startup-friendly -- accepts borrowers with a minimum of three months in business.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
Fundbox - Line of credit
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Startup-friendly -- accepts borrowers with a minimum of three months in business.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 3 months.
- Minimum annual revenue: $30,000.
Our pick for
Invoice factoring
AltLINE’s invoice factoring can help business-to-business companies access cash that’s tied up in unpaid invoices.
AltLINE - Invoice Factoring
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
AltLINE - Invoice Factoring
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
Qualifications:
- All credit scores may be accepted (ranging from 300 to 850).
- No minimum time in business requirement.
- No minimum annual revenue requirement.
- Must be a B2B business.
Our pick for
Equipment financing
You can finance any type of essential business equipment through JR Capital. This lender offers flexible repayment options and doesn’t require a down payment.
JR Capital Equipment Financing
Pros
- Funding available within 48 hours.
- Competitive rates and repayment terms.
- Flexible payment options available, including deferment options for certain industries.
- No down payment required.
Cons
- Must have good credit to qualify for no prepayment penalties.
- Charges an origination fee.
JR Capital Equipment Financing
Pros
- Funding available within 48 hours.
- Competitive rates and repayment terms.
- Flexible payment options available, including deferment options for certain industries.
- No down payment required.
Cons
- Must have good credit to qualify for no prepayment penalties.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 620.
- Minimum time in business: Typically two years, but can prioritize industry experience in some cases.
- No minimum annual revenue requirement.
Our pick for
Merchant cash advances
Expansion Capital Group offers fast funding, with flexible qualification requirements. Like all merchant cash advances, however, this product may be expensive.
Expansion Capital Group Merchant Cash Advance
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
Expansion Capital Group Merchant Cash Advance
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
Qualifications:
- Minimum credit score: 500.
- Minimum time in business: Six months.
- Minimum annual revenue: $100,000.
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 impact 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 these products can range anywhere from 6% to 99% annual percentage rate. And 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, however, are additional strategies to 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.
What is a private business loan?
Types of private business loans
Business term loans
Business lines of credit
Invoice factoring
Equipment financing
Merchant cash advances
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).
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, bank and credit union business loans will also be 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 financial history 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 to consider 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 able 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.