BEST OF

Best Small-Business Loans of 2023

Compare loan options and find the right funding for your small business.

Dec 19, 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.

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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Best Small-Business Loans

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

TAB Bank - Term loan

Est. APR

8.99-35.99%

Min. credit score

650

TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.

Pros

  • No prepayment penalty.

  • Terms range from 12 to 60 months.

  • Bank loan with online application process.

Cons

  • Requires high minimum credit score.

  • Origination fee and documentation fee charged on all loans.

  • Requires business lien and personal guarantee.

Qualifications

  • Minimum credit score: 650.

  • Minimum time in business: Two years.

  • Minimum annual revenue: $100,000.

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

PNC Bank - Line of credit

Est. APR

15.24-17.24%

Min. credit score

720

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.

Pros

  • Bank line of credit with competitive interest rates.

  • Can fund as quickly as the same business day.

  • Monthly repayments with no set term.

Cons

  • Requires high minimum credit score and multiple years in business.

  • Requires personal guarantee.

  • Businesses in certain states and industries are ineligible.

Read full review

Qualifications

  • Minimum credit score: 720.

  • Minimum time in business: Three years.

  • Minimum annual revenue: $100,000.

  • APR is the market prime rate plus either 7.49% or 9.49%.

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

SBA 7(a) loan

Est. APR

10.00-12.50%

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.

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

Credibility Capital - Online term loan

Est. APR

9.49-15.49%

Min. credit score

650

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

Pros

  • Competitive rates compared to other online lenders.

  • No prepayment penalty.

  • Loans can be approved and funded within five business days.

Cons

  • Requires higher annual revenue than other online lenders.

  • Requires business lien and personal guarantee.

  • Not available in Nevada, North Dakota, South Dakota or Vermont.

Read full review

Qualifications

  • Minimum credit score: 650.

  • Minimum time in business: Two years.

  • Minimum annual revenue: $200,000.

  • No bankruptcies in the past five years.

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

Funding Circle - Online term loan

Est. APR

5.99-16.49%

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 two business days.

  • Competitive rates among online lenders.

  • No minimum revenue requirement.

  • Terms up to seven years.

Cons

  • Requires business lien and personal guarantee.

Read full review

Qualifications

  • Minimum credit score: 660.

  • Minimum time in business: Two years.

  • Minimum annual revenue: None.

  • No bankruptcies in the past seven years.

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

OnDeck - Online term loan

Est. APR

29.90-97.30%

Min. credit score

625

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.

  • Accepts borrowers with a minimum credit score of 625.

  • Streamlined application process with minimal documentation required.

  • Can be used to build business credit.

Cons

  • Not available in Nevada, North Dakota or South Dakota.

  • Requires frequent (daily or weekly) repayments.

  • Interest rates can be high compared to traditional lenders.

  • Requires business lien and personal guarantee.

Read full review

Qualifications

  • Minimum credit score: 625.

  • Minimum time in business: One year.

  • Minimum annual revenue: $100,000.

  • Business bank account.

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.

American Express Business Blueprint™ - Line of credit

American Express Business Blueprint™ - Line of credit

Min. credit score

640

American Express Business Blueprint™ loans are a good option for business owners with fair credit who want access to working capital.

Pros

  • Simple application process with minimal documentation required.

  • Financing up to $250,000 available.

  • Accepts borrowers with a minimum credit score of 640.

  • Monthly repayment schedule (as opposed to daily or weekly).

  • No prepayment penalties, account maintenance fees or draw fees.

Cons

  • Must have online checking or PayPal account to verify cash flow.

  • Personal guarantee required.

  • Complex monthly fee structure makes it difficult to compare costs to other lenders.

Read full review

Qualifications

  • Minimum credit score: 640.

  • Minimum time in business: 1 year.

  • Average monthly revenue: at least $3,000.

  • All businesses are unique and are subject to approval and review.

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

Bluevine - Line of credit

Est. APR

20.00-50.00%

Min. credit score

625

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.

  • Low minimum credit score requirement.

Cons

  • May require weekly repayments.

  • Requires personal guarantee.

  • Not available in North Dakota, South Dakota or Nevada.

  • Rates can be high compared to traditional lenders.

Read full review

Qualifications

  • Minimum credit score: 625.

  • Minimum time in business: 24 months.

  • Minimum annual revenue: $480,000.

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

Fundbox - Line of credit

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

  • Financing available within one business day after approval.

  • Simple application with minimal documentation required.

  • Startup-friendly — accepts borrowers with a minimum of six months in business.

  • Low minimum credit score requirement.

  • No prepayment penalties, account maintenance fees or inactivity fees.

Cons

  • Rates are high compared to traditional banks.

  • May require personal guarantee.

  • Can’t be used to build business credit.

  • Weekly repayments required over a short term (maximum of 24 weeks).

Read full review

Qualifications

  • Minimum credit score: 600.

  • Minimum time in business: Six months.

  • Minimum annual revenue: $100,000.

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

Triton Capital - Equipment financing

Est. APR

5.99-35.00%

Min. credit score

600

Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.

Pros

  • Can fund within one to two business days.

  • No prepayment penalty.

  • Flexible repayment options: monthly, quarterly, annually or semiannually.

Cons

  • Typically requires a personal guarantee and UCC lien.

  • Requires high minimum annual revenue.

Qualifications

  • Minimum credit score: 600.

  • Minimum time in business: Two years, but startups may be eligible (with higher costs).

  • Minimum annual revenue: $250,000.

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

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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 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

SBA loans are small-business loans partially guaranteed by the U.S. Small Business Administration and issued by participating lenders, such as banks and credit unions. SBA loans offer low interest rates and long repayment terms and can be used to finance a variety of business expenses.

Although there are multiple types of funding within the SBA loan program, the SBA 7(a) loan is the most popular. These loans are available in amounts up to $5 million, with terms up to 25 years.

To qualify for an SBA loan, you’ll need good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong finances and multiple years in business. You should also have the flexibility to wait for funding, as the loan application process is slow and time-consuming.

  • Loan amounts: $30,000 to $5 million.

  • Approximate APR range: 10% to 12.5%.

  • 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.

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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?

Getting a business loan doesn't have to be a painful process. You can increase your chances of approval by understanding your business's qualifications and then finding the financing option that fits your needs.

Here are the steps you can follow:

Decide which financing option is right for your needs. If you want to finance a large purchase or business expansion, for example, you might consider a traditional term loan, whereas if you need funds for day-to-day expenses, you might prefer a business line of credit.

Determine if you qualify to get a business loan. You’ll want to consider factors such as your personal credit score, time in business and annual revenue. Bank and SBA lenders will likely have the strictest eligibility criteria. Online lenders, on the other hand, may be more flexible.

Determine what payments you can afford. You should look carefully at your business’s financials — especially cash flow — and evaluate how much you can afford to apply toward loan repayments each month. Your total income should be at least 1.25 times your total expenses, including your new repayment amount.

Decide whether and how you want to collateralize the loan. Business loans can be secured or unsecured. A secured business loan requires collateral, such as property or equipment, that the lender can seize if you fail to repay the loan. Putting up collateral is risky, but it can increase the amount lenders let you borrow and get you a lower interest rate. Keep in mind, however, that although some lenders don’t require physical collateral, they may still take out a UCC filing on your business assets. This official document allows a lender to seize your assets in the case of default.

Compare small-business lenders. You’ll typically want to get the business loan that offers you the best terms. But other factors, like funding speed, may matter to your business and different funding sources may be better in certain instances than others.

Apply for a business loan. Of the loans you qualify for, choose the one with the lowest APR and best terms for you — as long as you’re able to handle the loan’s regular payments — and gather your business loan application materials. These may include financial documents like tax returns, bank statements and cash-flow statements. You may also be required to sign a personal guarantee.

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.

Last updated on December 19, 2022

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.

To recap our selections...

NerdWallet's Best Small-Business Loans of 2023

Frequently asked questions