| 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 5.0/5.0 | 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 | 600 | 5.99-35.00% | 5 years |
Best for Bank small-business loans
Best for Bank lines of credit
Best for SBA loans
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
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
Max Loan
$250,000
Min. Credit Score
600
APR Range
5.99-35.00%
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
$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 - Line of credit
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
$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
$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
$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
$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
$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
$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
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Max loan
$250,000
Min. Credit score
600
Apr range
5.99-35.00%
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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:
Learn more about some of the most popular types of business loans below. | |
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 small-business loans. | |
SBA loanSBA 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.
| Bank loanBanks 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 loanOnline 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 line 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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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. | |
🏦 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.
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