| Lender | Best for | Max loan amount▼ | Min. credit score▼ | APR range | Max term length▼ |
|---|---|---|---|---|---|
| TAB Bank | Bank small-business loans | $300,000 | 660 | 8.99-35.99% | 5 years |
| PNC Bank | Bank lines of credit | $100,000 | 720 | 15.99-17.99% | See review |
| U.S. Small Business Administration | SBA loans | $5,000,000 | 650 | 11.50-15.00% | 25 years |
| Funding Circle 4.5/5.0 | Long-term loans | $500,000 | 660 | 15.22-45.00% | 7 years |
| OnDeck 5.0/5.0 | Short-term loans | $250,000 | 625 | 35.40-99.90% | 2 years |
| American Express Business Blueprint™ 4.5/5.0 | Online lines of credit | $250,000 | 660 | See review | See review |
| Bluevine 5.0/5.0 | Startup businesses | $250,000 | 625 | 20.00-50.00% | 1 year |
| Fundbox 5.0/5.0 | Borrowers with bad credit | $150,000 | 600 | 10.10-79.80% | 6 months |
| Triton Capital 4.0/5.0 | Equipment financing | $250,000 | 575 | 5.99-34.99% | 5 years |
Best for Bank small-business loans
Best for Bank lines of credit
Best for SBA loans
U.S. Small Business Administration
Max Loan
$5,000,000
Min. Credit Score
650
APR Range
11.50-15.00%
Max Term Length
25 years
Best for Long-term loans
Funding Circle
Max Loan
$500,000
Min. Credit Score
660
APR Range
15.22-45.00%
Max Term Length
7 years
Best for Short-term loans
Best for Online lines of credit
Best for Startup businesses
Best for Borrowers with bad credit
Best for Equipment financing
Triton Capital
Max Loan
$250,000
Min. Credit Score
575
APR Range
5.99-34.99%
Max Term Length
5 years
Best 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
Max Loan Amount
$300,000
Min. credit score
660
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.
Max loan
$300,000
Min. Credit score
660
Apr range
8.99-35.99%
Best 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 - Unsecured Small Business Line of Credit
Max Loan Amount
$100,000
Min. credit score
720
Est. APR
15.99-17.99%
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.
Max loan
$100,000
Min. Credit score
720
Apr range
15.99-17.99%
Best 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.
» MORE: NerdWallet’s guide to SBA loans
SBA 7(a) loan
Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
11.50-15.00%
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Lowest interest rate
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
Best 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.
» MORE: Best long-term business loans
Funding Circle - Online term loan
Max Loan Amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
Best 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.
» MORE: Best short-term business loans
OnDeck - Online term loan
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
35.40-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
Max loan
$250,000
Min. Credit score
625
Apr range
35.40-99.90%
Best 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 Line of Credit
Max Loan Amount
$250,000
Min. credit score
660
The American Express® Business Line of Credit is a good option for business owners with fair credit who want access to working capital.
Max loan
$250,000
Min. Credit score
660
Best 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
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly
Max loan
$250,000
Min. Credit score
625
Apr range
20.00-50.00%
Best 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
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
Max loan
$150,000
Min. Credit score
600
Apr range
10.10-79.80%
Best 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
4.0
NerdWallet rating with Fundera by NerdWallet
Max Loan Amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
4.0
NerdWallet rating Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
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Choosing the best small-business loanFunding options for qualified business owners include SBA loans, bank 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 lending options. The best loan for your small business will depend on a variety of factors, such as:
» MORE: What is a business loan? | |
Types of small-business loansLoan terms, interest rates and qualifications vary by lender, but here are the features you can generally expect to find with the different types of business loans. | |
SBA loansSBA loans are small-business loans partially guaranteed by the U.S. Small Business Administration, a government agency, 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.
| Bank loansBanks 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.
|
Business term loansOnline lenders typically offer term loans of up to $500,000. For a short-term loan, the repayment period tends to range 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 commercial real estate, equipment or inventory.
| Business lines of creditA 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.
|
Equipment financingEquipment 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.
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Commercial real estate loansCommercial real estate loans provide capital specifically for the purchase or renovation of commercial properties, such as offices, storefronts or residential buildings. These loans typically function like traditional term loans that you repay over a set period of time, with interest. Like equipment financing, commercial real estate loans are self-collateralizing — the property that you’re purchasing or renovating serves as collateral on the loan. To determine the amount of funding you’re eligible to receive, commercial real estate lenders use the loan-to-value ratio, or LTV. LTV is calculated by dividing the loan amount by the value of the property you own or are looking to buy. Generally, the lower the LTV, and the higher the down payment you can provide, the better interest rates you can get.
| Business auto loansBusiness auto loans are small-business loans used to purchase or refinance cars, vans or trucks for your company. These loans work similarly to consumer auto loans — you borrow money from a lender and repay it over time, with interest. The car you purchase (or refinance) serves as collateral on the loan and repayment terms often range from up to six or seven years. You can get business auto loans from bank-, SBA- and online lenders, but banks will typically offer the lowest interest rates.
|
Other government business loansAside from the most common type of government loan, the SBA 7(a) loan, small businesses can find additional financing options from the SBA, as well as other government agencies. | |
USDA business loansThe U.S. Department of Agriculture operates several business initiatives that are designed to provide financial assistance and development resources to rural businesses. One of the most well-known programs is the Business & Industry (B&I) Loan Program. Through this program, the USDA provides a partial guarantee to lenders, like banks and credit unions, that issue loans to small businesses in rural areas (populations of 50,000 residents or less). These businesses can use the financing for a range of purposes, including business repair and/or development, real estate purchases, debt refinancing, equipment purchases and certain acquisitions. Other USDA business loan options include:
| SBA disaster loansUnlike other SBA loan options, disaster loans are funded and issued directly by the U.S. Small Business Administration. These loans are designed specifically to help small businesses recover from physical and economic damage caused by a declared disaster. There are four types of SBA disaster loans:
SBA disaster loans have low interest rates, long repayment terms and may be faster to fund than other SBA loan options. |
Indian Loan Guaranty, Insurance and Interest Subsidy ProgramThe ILGP is a funding initiative administered by the Bureau of Indian Affairs. This program is designed to help American Indian- and Alaska Native-owned businesses access financing from private sources — like banks and community development financial institutions — when they would not be able to do so otherwise. To qualify for one of these loans, you must be:
Loans issued as part of the ILGP can be used for working capital, equipment purchases, construction, business acquisition and refinancing. You must have at least 20% equity in the project being financed, however, and the project must benefit the economy of a reservation or tribal service area. | Farm Service Agency loansThe Farm Service Agency (FSA) offers a variety of loan options to help farmers and ranchers start, expand or manage their agricultural businesses. These farm loans have competitive interest rates, long repayment terms and may be available to borrowers with fair or bad credit histories. The most common types of FSA loans include:
To qualify for an FSA loan, you’ll need to meet industry-specific requirements and show that you’ll be able to repay your financing. |
Additional funding options | |
Invoice factoring and invoice financingInvoice 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.
| Personal loans and business credit cardsA personal loan for business is a good funding 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 card 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 business loan?Every lender has different underwriting guidelines, but they generally consider similar factors, including your personal credit score, 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 loan 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 capital, 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. You can track your progress and open more doors for financing your business. | |
How do I get a loan for my small business?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 loan 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. Check your qualifications. 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. Estimate 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. Determine 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 claim 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 or customer service, may matter to your business and different financing 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.
🏦 Curious about SBA loans?
Here’s an overview of how SBA loans work, the types of SBA loans that are available, what each loan type can be used for and how to get SBA financing for your small business.
Last updated on December 19, 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.
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.
Frequently Asked Questions
With most small-business loans, you borrow capital from a lender and repay it, plus interest, over a predetermined period. Maximum loan amounts, interest rates and repayment terms will vary based on the type of business loan, the lender you’re working with and your business’s qualifications.
The stronger your qualifications, the easier it is to get a business loan. Although requirements vary by lender, it’s helpful to have good credit, strong finances and multiple years in business to access a variety of financing options. Startups and borrowers with bad credit may have a more difficult time getting a business loan.
If you haven’t gotten a business loan before, you will need strong personal credit, solid business financials, at least a year in business and in some cases collateral to qualify for a small-business loan at a bank. Online lenders require less stringent requirements. If you're just starting out, consider alternatives such as business credit cards. See our list of startup funding options.
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.
Some online and nonprofit lenders offer business loans for bad credit (personal credit scores of below 630). These loans typically have higher interest rates than other business financing options, however.
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.