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Small-Business Lenders: Best Options of December 2021

Compare different types of small-business lenders to find the best way for you to access capital.
Randa KrissNovember 5, 2021
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Small-business lenders can be traditional financial institutions — such as banks or credit unions — government agencies or other organizations like online fintech companies.
Individual lenders vary in the types of small-business loans they provide, as well as their application processes and eligibility criteria for borrowers. The best small-business lender will offer the products you need, has requirements you can meet and charges affordable interest rates and fees.
Below, compare some of the top small-business loan lenders and learn how to choose the right option for your business.

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LenderBest ForEst. APRMin. Credit ScoreNext Steps

SBA 7(a) loan

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Best for SBA loan lenders5.50-8.00%650
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SBA Express loan

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Best for SBA loan lenders7.75-9.75%650
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Credibility Capital - Online term loan

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Best for Online term loan lenders6.99-24.99%650
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Funding Circle - Online term loan

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Best for Online term loan lenders12.18-36.00%660
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OnDeck - Online term loan

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Best for Online term loan lenders9.00-99.00%600
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BlueVine - Line of credit

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Best for Online lines of credit lenders15.00-78.00%600
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Fundbox - Line of credit

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Best for Online lines of credit lenders10.10-79.80%600
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OnDeck - Line of credit

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Best for Online lines of credit lenders11.00-61.90%600
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BlueVine - Invoice factoring

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Best for Invoice factoring lender15.00-68.00%530
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Summary of Small-Business Lenders: Best Options of December 2021

Our picks for

SBA loan lenders

Banks, credit unions and other participating financial institutions issue SBA 7(a) loans. These loans are guaranteed by the SBA.

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SBA 7(a) loan

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Est. APR

5.50-8.00%

Min. Credit Score

650

7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.

Pros

  • Available as a term loan or line of credit.
  • Interest rates are capped.
  • Long repayment terms available.

Cons

  • Personal guarantee is required.
  • Collateral is typically required.
  • Longer processing times than online lenders.
Read full review

Qualifications:

  • Be a for-profit U.S. business.
  • Must first use alternative financial resources, including personal assets.
  • Financial qualifications determined by individual lender.
Lowest interest rate
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SBA Express loan

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Est. APR

7.75-9.75%

Min. Credit Score

650

SBA Express loans are available up to $500,000 as either a term loan or line of credit.

Pros

  • Available as a term loan or line of credit.
  • Interest rates are capped.
  • Faster processing time compared to other government loans.

Cons

  • Personal guarantee is required.
  • Lower borrowing maximum than other government loans.
  • Shorter repayment term for line of credit than 7(a) loans.
Read full review

Qualifications:

  • Be a for-profit U.S. business.
  • Must first use alternative financial resources, including personal assets.
  • Financial qualifications determined by individual lender.

Our picks for

Online term loan lenders

These online lenders offer simple application processes and faster funding times than some SBA or bank lenders.

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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.

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.
Read full review

Qualifications:

  • Minimum credit score: 660.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: None.
  • No bankruptices in the past 7 years.
May fund quickly
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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.
Read full review

Qualifications:

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

Our picks for

Online lines of credit lenders

These online lenders offer quick access to business lines of credit for borrowers who have less-than-perfect personal credit histories.

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BlueVine - Line of credit

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Est. APR

15.00-78.00%

Min. Credit Score

600

BlueVine's line of credit provides fast working capital for short-term borrowing needs.

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.
Read full review

Qualifications:

  • 6-month line of credit:
  • Minimum credit score: 600.
  • Minimum time in business: 6 months.
  • Minimum annual revenue: $120,000.
  • 12-month line of credit:
  • Minimum credit score: 600.
  • Minimum time in business: 6 months.
  • Minimum annual revenue: $120,000.
May fund quickly
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Fundbox - Line of credit

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Est. APR

10.10-79.80%

Min. Credit Score

600

Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.

Pros

  • Cash can be available by the next day.
  • Low minimum credit score requirement.

Cons

  • Rates are high compared to traditional banks.
Read full review

Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 6 months.
  • Minimum annual revenue: $100,000.
May fund quickly
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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.
Read full review

Qualifications:

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

Our pick for

Invoice factoring lender

For businesses that have cash flow gaps due to unpaid invoices, this online lender offers fast access to capital while you wait for your customers to pay.

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BlueVine - Invoice factoring

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Est. APR

15.00-68.00%

Min. Credit Score

530

BlueVine's invoice factoring can turn unpaid customer invoices into fast cash.

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.
Lowest credit score required

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Types of small-business lenders

Typically, a business lender is a third-party entity that loans your company money under an agreement that it will be repaid. Public and private financial institutions, government agencies and nonprofit organizations can all be small-business lenders.

Government lenders

The federal government doesn’t usually lend to small-business owners directly. However, it does guarantee financing issued through the SBA loan program. SBA loans are funded by participating lenders — typically banks and credit unions — and backed by the U.S. Small Business Administration.
Many national, regional and local banks are SBA lenders, including big-name institutions like Chase and Bank of America. You can find a lender in your area by using the Lender Match tool on the SBA website.
SBA loans offer long terms, low interest rates and can be used for a variety of purposes. To qualify for an SBA loan, you’ll need good credit and financials, as well as a few years in business.
» MORE: NerdWallet’s list of the best SBA lenders

Credit union and bank lenders

Banks and credit unions offer some of the most affordable small-business loans, but these lenders also have lengthy application processes and strict eligibility requirements.
You’ll likely need strong credit, two or more years in business and solid revenue to qualify for a loan from one of these lenders.
Small-business borrowers report higher rates of approval with community banks compared to large, national banks, as well as greater overall satisfaction with credit unions and community banks — according to a 2021 Federal Reserve survey.
If you have an existing relationship with a bank or credit union, you might contact a representative to find out if it offers business financing.
» MORE: Best banks for small-business loans

Online lenders

Online business lenders can offer a variety of financing options with a streamlined application process. Online lenders are known for their fast access to capital, with some companies offering same-day business loans with funding in as little as 24 hours.
Compared to banks and credit unions, online lenders have more flexible qualification requirements, but the cost of borrowing is often higher.
» MORE: NerdWallet’s list of the best online business loans

Nonprofit lenders

Nonprofit organizations can offer loans to small businesses in underserved communities, such as women-owned businesses or minority-owned businesses. These organizations typically provide smaller loans — called microloans — but may be more willing to work with newer businesses or those with bad credit.
As part of the SBA Microloan program, for instance, the government distributes funds directly to these types of lenders. The lenders are then able to create and manage their own programs.
To find a microlender near you, you can browse a state-by-state lender list on the SBA website.
» MORE: Microloans: Top nonprofit and SBA lenders

How to choose a business lender

You’ll want to consider several factors when choosing a small-business lender. But ultimately, there are trade-offs between banks, online lenders and other options, depending on what’s most important to you:
  • If you want the least expensive loan: A bank will likely offer the lowest interest rates, but you’ll need to be able to meet tough financial qualifications. Banks can also offer a variety of types of business loans, as well as longer terms than some online lenders.
  • If you can’t qualify with a bank: Start with the SBA loan program. SBA loans have competitive rates and long terms, and eligibility criteria can be a little more flexible than bank requirements. However, you’ll still need good credit and strong revenue to qualify, and the application process can be complex — so online lenders are an alternative option.
  • If you need a loan fast: Online lenders will be your top option. Some online lenders can offer funding in as little as 24 hours — although speed can come at a cost of higher interest rates.
  • If customer service is a priority: Although a variety of lenders have representatives to help you through the application process, small-business borrowers report having a higher level of overall satisfaction with credit unions and community banks.
  • If you’re a new business or have bad credit: Some online lenders, as well as nonprofit lenders, may have more flexible requirements that can accommodate newer businesses or those with bad credit. These businesses may also consider alternative types of funding, such as small-business grants.

Compare small-business loans

If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
Last updated on November 5, 2021

To recap our selections...

Small-Business Lenders: Best Options of December 2021

Frequently Asked Questions

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