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Best Low-Interest Business Loans of 2020

Jackie ZimmermannJanuary 23, 2020

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Low-interest business loan options include SBA loans and online loans. You'll need good credit and strong finances to qualify.

Easily get real, personalized small business loan rates to compare — not just ranges or estimates.

It's free and won't affect your credit.

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on Fundera's website

Our picks for

Lowest-cost loans

SmartBiz - SBA loan

SmartBiz - SBA loan

Est. APR

9.28 - 10.52%

Min. Credit Score

650

SmartBiz’s low-cost SBA loans work best for established businesses that want to finance an expansion or refinance debt.

Pros

  • Competitive rates among online lenders.
  • Faster than getting an SBA loan from a bank.

Cons

  • Must have strong financials, supported by personal and business tax returns for the past 3 years.
  • Stringent rules on use of proceeds.
  • Requires business lien and personal guarantee.
Read full review

Qualifications

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $50,000.
  • No bankruptcies or foreclosures in the past 3 years.
Live Oak Bank - SBA loan

Live Oak Bank - SBA loan

Est. APR

5.50 - 8.25%

Min. Credit Score

650

Live Oak Bank's SBA loans work best for established businesses looking to finance an expansion.

Pros

  • Competitive rates among online lenders.
  • Faster than getting an SBA loan from a bank.

Cons

  • Must have strong financials, supported by personal and business tax returns for the past 3 years.
  • Only for specific industries.
  • Stringent rules on use of proceeds.
  • Requires business lien and personal guarantee.
Read full review

Qualifications

  • Minimum credit score: 650.
  • Cash flow must be able to support the debt.
  • No bankruptcies or foreclosures.
  • No outstanding tax liens.

Our picks for

Businesses less than two years old

StreetShares - Online term loan

StreetShares - Online term loan

Est. APR

8.00 - 39.99%

Min. Credit Score

600

StreetShares offers a business term loan for newer businesses that need to finance an expansion.

Pros

  • No prepayment penalty.

Cons

  • Requires weekly repayments.
  • Financing amounts limited to 20% of annual revenue.
Read full review

Qualifications

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $25,000.
  • No bankruptcies in the past 3 years.
StreetShares

StreetShares - Line of credit

Est. APR

8.00 - 39.90%

Min. Credit Score

600

StreetShares offers a business line of credit for newer businesses that need to manage cash flow or buy inventory.

Pros

  • Competitive rates among online lenders.
  • No prepayment penalty.

Cons

  • Requires weekly repayments.
  • Financing amounts limited to 20% of annual revenue.
Read full review

Qualifications

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $75,000.
  • No bankruptcies in the past 3 years.
  • Unavailable to borrowers in North Dakota, South Dakota, Rhode Island, Montana, and Nevada. Unavailable to sole proprietorships in Delaware, Minnesota, Nebraska, New Jersey, or New York.

Our picks for

Businesses two or more years old

Credibility Capital - Online term loan

Credibility Capital - Online term loan

Est. APR

10.00 - 25.00%

Min. Credit Score

680

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

  • Short repayment term results in higher payment amounts.
  • 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.
Read full review

Qualifications

  • Minimum credit score: 680.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $250,000.
  • No bankruptcies in the past 5 years.
Funding Circle - Online term loan

Funding Circle - Online term loan

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.
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.

Easily get real, personalized small business loan rates to compare — not just ranges or estimates.

It's free and won't affect your credit.

Get Started

on Fundera's website

Summary of Best Low-Interest Business Loans of 2020

LenderBest ForEst. APRMin. Credit Score
SmartBiz - SBA loan

SmartBiz - SBA loan

Lowest-cost loans

9.28 - 10.52%

650

Live Oak Bank - SBA loan

Live Oak Bank - SBA loan

Lowest-cost loans

5.50 - 8.25%

650

StreetShares - Online term loan

StreetShares - Online term loan

Businesses less than two years old

8.00 - 39.99%

600

StreetShares

StreetShares - Line of credit

Businesses less than two years old

8.00 - 39.90%

600

Credibility Capital - Online term loan

Credibility Capital - Online term loan

Businesses two or more years old

10.00 - 25.00%

680

Funding Circle - Online term loan

Funding Circle - Online term loan

Businesses two or more years old

12.18 - 36.00%

660

If you’re looking for the lowest-cost loan

SBA loans are by far your best bet for the lowest possible rates if your business is strong. With the SBA guaranteeing 75% to 85% of the financing, lenders can offer SBA loan rates of about 7% to 9% that are based on the prime rate. But the application process is a major time commitment — we’re talking months — and small-business owners may not have time for that.

SmartBiz and Live Oak streamline the SBA loan process, giving business owners access to financing at low interest rates with less hassle.

SmartBiz provides SBA loans that can be used for working capital, inventory, expansion and debt consolidation.

If you do business in one of these 17 highly specialized industries, you can turn to Live Oak Bank for SBA loans. The North Carolina-based online bank can help get you an SBA loan in just 45 days.

If you’ve been in business less than two years

Many traditional lenders, such as banks, require at least two years of business history to qualify for a loan. But if you have just one year under your belt, consider StreetShares for financing.

StreetShares offers term loans and a standard line of credit of up to $250,000. The lender is takes a different spin on peer-to-peer lending, matching borrowers with investors who share similar interests.

If you’ve been in business two or more years

With two years in business, you may have an additional financing option that comes with competitive rates and quick funding.

Credibility Capital requires at least 24 months in business. It has minimum credit and revenue requirements — 680 and $250,000, respectively — but it also uses a “holistic” approach to underwriting, meaning it may be flexible on some requirements if you are outperforming in other areas.

Funding Circle offers competitive interest rates for established companies. Typical borrowers have at least 10 employees and have been in business for 10 years.

If you’re looking for business loan alternatives

Outside of traditional business loans, you can also consider using a personal loan for business or a business credit card. You typically need to have good to excellent credit to get the lowest APRs.

Personal loan: Using a personal loan for business is typically best for starting your company. Since your company is brand new, you won’t have any business or revenue history, which are two key components that small-business lenders consider. Instead, personal loan providers will qualify you based on your personal credit score and income.

Personal loans also tend to have lower APRs than many online alternative lenders, but defaulting on them could hurt your personal credit score.

Business credit card: Using a business credit card not only gives you access to a revolving line of credit, but you can also earn valuable rewards, like cash back. Credit limits on business credit cards are typically higher than what’s offered for personal credit cards.

Business credit cards are a good option for recurring or everyday purchases. You can qualify based on your personal credit even if you don’t have an established business history.

Find and compare small-business loans

If none of these options seems like a good fit, NerdWallet has created a comparison tool for the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and filtered them by categories that include your revenue and how long you’ve been in business.

Last updated on January 23, 2020

To recap our selections...

NerdWallet's Best Low-Interest Business Loans of 2020