A small-business loan can help you stock your shelves, buy new equipment or expand your footprint. Business owners can access funding through traditional banks, online lenders and community lending institutions.
Below, compare the best small-business loans, including bank and SBA loans, business lines of credit, term loans and equipment financing. Plus, learn how to qualify and find the right financing for your needs.
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.
Our picks for
Bank small-business loans
Banks typically offer small-business loans with the lowest interest rates and most competitive terms. These products are well-suited for established businesses with collateral and strong credit.
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TAB Bank - Term loan
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Max Loan Amount
$200,000
Min. Credit Score
650
Est. APR
8.99-35.99%
TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.
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PNC Bank - Line of credit
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Max Loan Amount
$100,000
Min. Credit Score
720
Est. APR
12.24-14.24%
PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.
Our pick for
SBA loans
SBA loans offer favorable rates and terms and can be used for a variety of large and long-term funding purposes. These government-guaranteed loans are best for businesses that don’t meet bank eligibility criteria, but still have good credit and strong finances.
SBA 7(a) loan
Max Loan Amount
$5,000,000
Min. Credit Score
650
Est. APR
7.00-9.50%
7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.
Lowest interest rate
Our picks for
Online term loans
Online term loans can be good options for businesses that need fast financing or those that can’t qualify for an SBA or bank loan. Online lenders generally have less-stringent eligibility requirements compared to traditional lenders and may work with startups or businesses with bad credit. Some lenders can also turn around funding within 24 hours.
Credibility Capital - Online term loan
Max Loan Amount
$500,000
Min. Credit Score
650
Est. APR
6.99-24.99%
Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.
Funding Circle - Online term loan
Max Loan Amount
$500,000
Min. Credit Score
660
Est. APR
10.13-36.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly
OnDeck - Online term loan
Max Loan Amount
$250,000
Min. Credit Score
600
Est. APR
9.00-99.00%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
Our picks for
Online lines of credit
A business line of credit is a flexible form of financing that allows you to tap into a credit line and pay interest on only the portion of money you borrow. Online business lines of credit are best for fast access to working capital, especially for new businesses or those with less-than-perfect credit histories.
Kabbage - Line of credit
Max Loan Amount
$250,000
Min. Credit Score
640
Kabbage loans are a good option for business owners with fair credit who want quick access to working capital.
Bluevine - Line of credit
Max Loan Amount
$250,000
Min. Credit Score
625
Est. APR
15.00-78.00%
Bluevine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. Credit Score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.
May fund quickly
Our pick for
Equipment financing
Equipment financing is best for small businesses looking specifically to purchase machinery or equipment. Since the equipment itself serves as collateral, equipment loans can be more affordable and easier to qualify for than other types of small-business loans.
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Triton Capital - Equipment financing
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Max Loan Amount
$250,000
Min. Credit Score
600
Est. APR
4.99-25.00%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
Here are 10 small business loans options for you
Lender | Best for | Max loan amount | Min. credit score |
|---|---|---|---|
TAB Bank - Term loan | Best for Bank small-business loans | $200,000 | 650 |
PNC Bank - Line of credit | Best for Bank small-business loans | $100,000 | 720 |
SBA 7(a) loan Read Full Review | Best for SBA loans | $5,000,000 | 650 |
Credibility Capital - Online term loan Read Full Review | Best for Online term loans | $500,000 | 650 |
Funding Circle - Online term loan Read Full Review | Best for Online term loans | $500,000 | 660 |
OnDeck - Online term loan Read Full Review | Best for Online term loans | $250,000 | 600 |
Kabbage - Line of credit Read Full Review | Best for Online lines of credit | $250,000 | 640 |
Bluevine - Line of credit Read Full Review | Best for Online lines of credit | $250,000 | 625 |
Fundbox - Line of credit Read Full Review | Best for Online lines of credit | $150,000 | 600 |
Triton Capital - Equipment financing | Best for Equipment financing | $250,000 | 600 |
How Much Do You Need?
Annual percentage rates (APRs), loan term and monthly payments are estimated based on analysis of information provided by lenders and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers' credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term and credit history. All loans are subject to credit review and approval.
Funding options for qualified business owners include bank loans, SBA loans, term loans, business lines of credit and equipment financing. You typically need a year or more of business history and revenue to qualify for financing. Startups operating for less than a year can consider other financing options.
The best loan for your small business will depend on a variety of factors, such as:
- Why you need funding.
- How fast you need access to capital.
- How much capital you need.
- Your business’s qualifications.
- Total cost of debt.
Learn more about some of the most popular types of small-business loans below.
Loan terms, interest rates and qualifications vary by lender, but here are the features you can generally expect to find with the different types of small-business loans.
Bank loan
Banks can offer a variety of types of small-business financing, including term loans, SBA loans and lines of credit. To qualify for a bank loan, you’ll typically need a strong personal credit score (starting in the 700s), several years in business and a solid track record of business finances, such as strong cash flow. In some cases, banks will require collateral.
- Loan amounts: $10,000 to $1 million.
- Approximate APR range: 2.54% to 7.02%.
- Best for: Working capital, expanding your business.
SBA loan
The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
- Loan amounts: $30,000 to $5 million.
- Approximate APR range: 7% to 9.5%.
- Best for: Large one-time and longer-term investments, purchasing real estate or equipment, buying existing businesses and refinancing debt.
» MORE: NerdWallet’s guide to SBA loans
Business term loan
Online lenders offer term loans of up to $500,000. For a short-term loan, the repayment period typically ranges from three to 18 months, while a long-term loan repayment can extend up to 10 years or longer in some cases. Business owners can also find financing that can be used for specific items, like equipment or inventory.
- Loan amounts: Up to $500,000.
- Approximate APR range: 9% to 99%.
- Best for: Large one-time investments.
Business line of credit
A business line of credit provides access to flexible cash. Similar to a credit card, lenders give you access to a specific amount of credit (say, $100,000), but you don’t make payments or get charged interest until you tap into the funds.
- Credit line range: $1,000 to $250,000.
- Approximate APR range: 9% to 99%.
- Best for: Managing cash flow, handling unexpected expenses and financing short-term business needs.
Equipment financing
Equipment financing is a form of asset-based financing where the equipment itself serves as collateral for the loan. You can get an equipment loan equal to up to 100% of the value of the equipment you’re looking to purchase — depending on the lender and your business’s qualifications — which you then pay back over time, with interest.
Some lenders may also pay for soft costs, such as installation, delivery, warranties, assembly and other similar expenses associated with getting your equipment up and running. Although certain lenders will finance these costs on top of the full value of your equipment, others may fund only a percentage of the cost of the equipment — 80%, for example — and devote the remainder of the loan (20%) to your soft costs.
- Loan amounts: Up to 100% of the value of the equipment, plus soft costs.
- Approximate APR range: 4% to 30%.
- Best for: Purchasing machinery and equipment.
Invoice factoring and invoice financing
Invoice factoring turns business owners’ unpaid invoices into immediate cash. You sell the invoices to a factoring company, which is paid when it collects from your customers. If you prefer to maintain control over your invoices, invoice financing is an alternative to factoring. Time to funding can be relatively short with invoice factoring or financing.
- Financing amounts: Up to $5 million.
- Approximate APR range: 10% to 79%.
- Best for: Managing cash flow, short-term financing.
Personal loans and business credit cards
Business financing options other than traditional loans or lines of credit include personal loans for business or business credit cards. A personal loan for business is a good option if your business is still young and you don’t qualify for traditional financing. Personal-loan providers look at your personal credit score and income instead of your business history.
A business credit card offers revolving credit, making it a solid option for short-term expenses. It can also be easier to qualify for a business credit card than a small-business loan. While credit limits tend to be smaller than a line of credit, a business credit card may offer rewards, such as cash back or travel points.
Every lender has different underwriting guidelines, but they generally consider similar factors, including personal credit score, your time in business and annual revenue. Lenders also consider your cash flow and ability to repay the debt.
Having strong personal credit can help you qualify for lower rates and give you more financing options. If you don’t need business financing right away, consider building your credit score. On the other hand, if you need more immediate access to financing, you may still be able to qualify for a business loan with bad credit.
If you don’t know your credit score or want to monitor it consistently, several personal finance websites, including NerdWallet, offer free credit score access. Track your progress and open more doors for financing your business.
First, you’ll want to decide which business loan option is right for your needs and determine whether you can qualify for that type of financing. Then, you can compare small-business lenders and prepare your loan application.
Depending on the lender, you’ll be asked to share financial documents like tax returns, bank statements and cash-flow statements as part of the application process. You may also be required to sign a personal guarantee.
» Read more about how to get a small-business loan
Getting the right business loan can be challenging, and several factors — cost, speed or repayment schedule — can play a role in deciding which product is best for you. With one application, Fundera by NerdWallet allows you to see all of the loan options you qualify for and compare them through a single platform for free.
Fundera by NerdWallet is not a direct lender. We do not finance businesses or underwrite loans. As a marketplace, we connect you with a network of vetted business lenders and offer tailored knowledge and expertise to ensure you have everything you need through each step of the funding process.
Fundera gets a percentage from the financial provider once you’re funded, but it isn't incentivized to work with certain financial providers over others. Our job is to offer pressure-free advice to help you find your best-fit lending product.
Last updated on June 16, 2022
To recap our selections...
Small-Business Loans 2022: Compare Financing and Apply
- TAB Bank - Term loan: Best for Bank small-business loans
- PNC Bank - Line of credit: Best for Bank small-business loans
- SBA 7(a) loan: Best for SBA loans
- Credibility Capital - Online term loan: Best for Online term loans
- Funding Circle - Online term loan: Best for Online term loans
- OnDeck - Online term loan: Best for Online term loans
- Kabbage - Line of credit: Best for Online lines of credit
- Bluevine - Line of credit: Best for Online lines of credit
- Fundbox - Line of credit: Best for Online lines of credit
- Triton Capital - Equipment financing: Best for Equipment financing
Frequently Asked Questions
Credit score requirements vary by loan and lender. Banks often require a credit score in the 700s for a small-business loan. But some online lenders will fund loans for borrowers with credit scores in the low- to mid-600s.
To qualify for an SBA loan, you typically need a good personal credit score (690 or higher), though some SBA loan programs are available to business owners with bad credit.
Startups less than a year old typically won't qualify for traditional small-business loans. The SBA does have two loan programs that cater to startups: SBA microloans and SBA Community Advantage loans.
Consider alternative financing like business credit cards, personal loans or grants if you can’t secure a small-business loan for your startup. See our list of startup funding options.