Best Of

Compare Small-Business Lenders 2021

Online lenders provide term loans, lines of credit and invoice factoring. Compare small-business lending companies to find the best fit for your business.

NerdWalletMarch 19, 2021
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If you need financing for your small business, your local bank is no longer your only option.

Online lenders offer quick access to small-business loans to address various needs, from dealing with an emergency to growing your small business. Here are nontraditional small-business lending companies you can compare based on your needs and qualifications.

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Our picks for

Term loans

If you’re looking for a lump sum of cash to repay over a fixed period of time, term loans are right for you. Because you can pay them off over a longer period, term loans are usually the better choice for larger investments and long-term growth. Generally, term loans have lower rates than lines of credit, but some may require collateral.

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Credibility Capital - Online term loan

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Est. APR

6.99 - 24.99%

Min. Credit Score

650

Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Pros

  • Competitive rates among online lenders.
  • No prepayment penalty.
  • Extra monthly payments can save interest cost.

Cons

  • Requires high minimum credit score and revenue.
  • Requires business lien and may require personal guarantee.
  • Not available in Nevada, North Dakota, South Dakota or Vermont.
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Qualifications:

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $200,000.
  • No bankruptcies in the past 5 years.
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Funding Circle - Online term loan

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Est. APR

12.18 - 36.00%

Min. Credit Score

660

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt. NOTE: Funding Circle has temporarily paused term loan origination to prioritize PPP lending.

Pros

  • Cash can be available within 3 business days.
  • Competitive rates among online lenders.
  • No minimum revenue requirement.

Cons

  • Requires business lien and personal guarantee.
  • Not available in Nevada.
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Qualifications:

  • Minimum credit score: 660.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: None.
  • No bankruptcies in the past 7 years.
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OnDeck - Online term loan

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Est. APR

9.00 - 99.00%

Min. Credit Score

600

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires frequent (daily or weekly) repayments.
  • Requires business lien and personal guarantee.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.

Our picks for

Lines of credit

If you’re looking for financing flexibility, a line of credit is a better option. You draw on the line — up to a specified amount — as needed and pay interest only on the money you borrow. Lines of credit are a better choice for short-term expenses. Although the APR may be slightly higher than for term loans, lines of credit provide the flexibility to take out money only when, and as often as, you need it.

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BlueVine - Line of credit

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Est. APR

15.00 - 78.00%

Min. Credit Score

650

BlueVine's line of credit provides fast working capital for short-term borrowing needs. NOTE: BlueVine has temporarily paused applications for this product to prioritize PPP funding.

Pros

  • Cash can be available within 12 to 24 hours.
  • Multiple term lengths for different financing needs.

Cons

  • Short repayment term results in higher payment amounts.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Vermont.
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Qualifications:

  • 6-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.
  • 12-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.
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OnDeck - Line of credit

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Est. APR

11.00 - 61.90%

Min. Credit Score

600

OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires weekly repayments.
  • Requires personal guarantee.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.

Our pick for

Invoice Factoring

Invoice factoring is a way to get immediate cash by borrowing against your unpaid customer invoices, which can help you fill cash-flow gaps while you wait for customers to pay. This type of financing is only for companies that sell goods and services to other businesses and, therefore, have invoices. Typically, invoice factoring costs are higher than with term loans and lines of credit.

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BlueVine - Invoice factoring

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Est. APR

15.00 - 68.00%

Min. Credit Score

530

BlueVine has temporarily paused applications for this product to prioritize PPP funding.

Pros

  • Finances larger invoices.
  • Cash can be available within the same day.
  • Accepts low minimum credit score and short time in business.

Cons

  • Not for businesses that do not invoice on net terms.
  • Loan amount is tied to the value of your invoices.
  • Dependency on customers to pay their bills on time.
Read full review

Qualifications:

  • Minimum credit score: 530.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $120,000.

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Summary of Compare Small-Business Lenders 2021

LenderBest ForEst. APRMin. Credit ScoreNext Steps

Credibility Capital - Online term loan

Best for Term loans6.99 - 24.99%650
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Funding Circle - Online term loan

Best for Term loans12.18 - 36.00%660
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OnDeck - Online term loan

Best for Term loans9.00 - 99.00%600
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BlueVine - Line of credit

Best for Lines of credit15.00 - 78.00%650
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OnDeck - Line of credit

Best for Lines of credit11.00 - 61.90%600
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BlueVine - Invoice factoring

Best for Invoice factoring15.00 - 68.00%530
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Compare small-business lending companies

When comparing and choosing a small-business lender, consider several factors, such as loan types, eligibility and costs.

BlueVine: Good for B2B businesses that deal with unpaid invoices and cash flow needs. You must have dependable customers. Also offers term loans and lines of credit.

Credibility Capital: Good short-term financing option for businesses with two years or more of history. Good credit is required.

Currency Capital: Faster way of applying for an equipment loan. Competitive rates for equipment financing of up to $2 million.

Fundbox: Great no-credit-check option if you have unpaid customer invoices or if you need a line of credit for short-term working capital.

Funding Circle: Term loan for growth. Rates are lower compared with other online lenders. Your finances must be in good shape.

OnDeck: Quick, easy funding, but rates may be high. Good if you need money fast and your personal finances aren’t stellar.

» MORE: If your business is less than a year old, consider these startup financing options.

Last updated on April 29, 2021

To recap our selections...

NerdWallet’s Best Small-Business Lenders of May 2021

Frequently Asked Questions

Two new laws provide coronavirus relief for small businesses, including deferment of existing SBA loans, access to loans and immediate emergency funds, and debt forgiveness.
A second round of government-backed forgivable coronavirus relief loans is expected to reopen in early January 2021 after President Trump signed a bill reauthorizing $284.5 billion for the Paycheck Protection Program (PPP).

Online lenders offer term loans up to $500,000, while loans backed by the U.S. Small Business Administration provide up to $5 million. Your borrowing limit depends mainly on the size and age of your business.

It can be hard to get a small-business loan if you have a bad personal credit score (300 to 629 FICO), low annual revenue and no business history. Build your credit scores, develop a strong business plan and secure the loan with collateral to qualify for a business loan.

Small-business loans are best used to finance business growth, whether it’s to open a new location, purchase equipment and inventory or hire additional staff. It’s generally a good idea to take out a business loan if your expected profits exceed the loan’s cost.