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Small-Business Loans 2022: Compare Financing and Apply

Compare loan options and find the right funding for your small business.
Written by Randa Kriss
Edited by Sally Lauckner
Last updated on September 28, 2022

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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.
Lender
Best for
Max loan amount
Min. credit score
APR range
Max term length
TAB BankBank small-business loans$200,0006508.99-35.99%5 years
PNC BankBank lines of credit$100,00072013.74-15.74%See review
U.S. Small Business AdministrationSBA loans$5,000,0006508.50-11.00%10 years
Credibility CapitalEstablished businesses$500,0006507.99-24.99%5 years
Funding CircleLong-term loans$500,00066010.64-31.85%7 years
OnDeckShort-term loans$250,00062529.90-97.30%2 years
KabbageOnline lines of credit$250,000640See reviewSee review
BluevineStartup businesses$250,00062515.00-78.00%1 year
FundboxBorrowers with bad credit$150,00060010.10-79.80%6 months
Triton CapitalEquipment financing$250,0006005.99-25.00%5 years

How much do you need?

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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 pick 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.

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.

Our pick for

Bank lines of credit

A bank line of credit offers greater flexibility than a term loan — allowing you to tap into a credit line and pay interest on only the portion of money you borrow. Bank credit lines are a good source of affordable working capital for established businesses.

PNC Bank - Line of credit

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Max Loan Amount
$100,000
Min. credit score
720
Est. APR
13.74-15.74%
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

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Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
8.50-11.00%
7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.
Lowest interest rate

Our pick for

Established businesses

Online term loans can be good options for established businesses that need faster financing than a bank or SBA loan. Businesses with a good credit and financial history can access the most competitive interest rates and repayment terms from online lenders.

Credibility Capital - Online term loan

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Max Loan Amount
$500,000
Min. credit score
650
Est. APR
7.99-24.99%
Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Our pick for

Long-term loans

Long-term loans can help you expand your business — and provide more time to repay and lower monthly payments than short-term loans. Some online lenders can offer repayment terms up to seven years, with faster funding times than more conventional loan options.

Funding Circle - Online term loan

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Max Loan Amount
$500,000
Min. credit score
660
Est. APR
10.64-31.85%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly

Our pick for

Short-term loans

Short-term loans can be good for businesses that need quick funding or those that can’t qualify for an SBA or bank loan. Short-term 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.

OnDeck - Online term loan

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
29.90-97.30%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Our pick for

Online lines of credit

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

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on Kabbage's website

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.

Our pick for

Startup businesses

Some online lenders offer business loans for startups with one year or less in operation. You’ll typically need at least six months in business to qualify.

Bluevine - Line of credit

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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

Our pick for

Borrowers with bad credit

It can be more difficult to get a business loan with bad credit, but some online lenders are willing to work with borrowers who have a personal credit score below 630.

Fundbox - Line of credit

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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.

Triton Capital - Equipment financing

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Max Loan Amount
$250,000
Min. credit score
600
Est. APR
5.99-25.00%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.

How Much Do You Need?

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Understand the cost of a business loan

Calculate estimated payments, then see if you qualify for a business loan

Not sure? See estimate rates on online business loans and SBA loans.

Get personalized small-business loan rates to compare

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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.

Choosing the best small-business loan

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.

Types of small-business loans

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: 3.19% to 6.78%.
  • 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:
    8.5
    % to
    11
    %.
  • Best for: Large one-time and longer-term investments, purchasing real estate or equipment, buying existing businesses and refinancing debt.

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.

Additional funding options

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.

How do I qualify for a small-business loan?

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.

How do I get a business loan?

First, you’ll want to decide which financing option is right for your needs and determine whether you can get that type of business loan. Then, you can compare lenders and prepare your loan application.
Depending on the small-business 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.
Last updated on September 28, 2022

How Fundera by NerdWallet works

Getting a business loan can be challenging, and several factors — cost, speed, repayment schedule — can play a role in deciding which product is right for you. Let us help you through the process.

man with a laptop on a bench

1. Fill out one simple application

Answer a few questions about your business to get personalized lending options. It’s free and won’t impact your credit score.

2. See your business loan options

It takes about three minutes to get options from our network of vetted small-business lenders. Compare interest rates and repayment terms to choose the best product for your needs.

3. Get your loan

If the lender approves you, you’ll sign closing documents in order to receive funds. Some lenders can approve and fund loans within one business day.

Methodology

NerdWallet reviewed both traditional and online lenders in order to create our list of the best small-business loans.
Our list includes a variety of loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our list meets the following criteria:
- Maximum loan amount of at least $100,000. - Transparent rates and repayment terms. - Funding available within two weeks of applying. - Personal credit score requirements of 720 or below. - No more than three years in business required.

Keep up with your credit score.

Monitor your credit and grow your business. Strengthening your personal credit can help you qualify for lower rates and more loan options.

Frequently Asked Questions