Your small business is a hit. Now you want to reinvest in your company by opening a second or third location, launching a new product or hiring more staff. A business expansion loan can provide the cash you need to finance your growth plans.
When comparing expansion loans, analyze your project to make sure your profits will exceed the total cost of the loan. Other factors to consider include the loan’s repayment period, borrowing costs, speed of funding and whether you’ll meet the lender’s minimum qualifications.
Below, we compare some business expansion loans from online lenders and choose the top options among NerdWallet’s picks.
BEST FOR COST
BEST FOR SPEED, EASE OF QUALIFYING
SUMMARY OF OPTIONS
Low-cost business expansion loans
Best option: With SmartBiz, you get access to one of the cheapest loan options for small business owners. SmartBiz provides Small Business Administration 7(a) loans with a 10-year repayment term, so your total monthly payment will likely be much lower than with other online lenders. The long terms and low rates make it a great option for expansion financing or large purchases.
SmartBiz also has a separate commercial real estate loan for small-business owners looking to buy real estate or refinance real estate debt.
Read our SmartBiz review for more info.
Smartbiz sba loans
- Pros: Low APR between 8.27% and 9.57%. Longer repayment period than typical business loans, which means lower monthly payments.
- Cons: You need a strong business to qualify. It can take more than a week or longer to get approved.
- How to qualify: 600+ credit score for loans of up to $150,000 and 650+ for loans over $150,000, 2+ years in business and $50,000+ in annual revenue, no bankruptcies or foreclosures in the past three years
Credibility Capital is a good option if you don’t qualify for an SBA loan through SmartBiz. Credibility Capital typically provides faster funding, although the loans will likely carry a higher cost than at SmartBiz and have a much shorter repayment time frame.
- Pros: Faster funding than SmartBiz, monthly payments
- Cons: Higher credit score requirements, shorter repayment time frame
- How to qualify: 650+ credit score, 18+ months in business, $150,000+ annual revenue, no bankruptcies in past five years
If you’re looking for a longer term, consider Funding Circle. The lender offers a maximum five-year repayment term compared with Credibility Capital’s three-year term. APRs between the two lenders are comparable, but they are still not as competitive as SmartBiz.
- Pros: Longer terms and higher loan amounts than Credibility Capital
- Cons: Not for newer businesses; typical borrowers have 10 years in business and $2 million in revenue
- How to qualify: 620+ personal credit score, 2+ years in business, no minimum annual revenue requirement
Best business expansion loan for fast cash, ease of qualifying
OnDeck offers speed and convenience as well as looser qualifications than other online lenders. You can complete the application in about 10 minutes, online or over the phone. Funding typically takes a few days to a week. This is appealing for a business owner who wants to move fast on a business opportunity, such as buying inventory at a discount. However, with APRs ranging from 9% to 99%, the loans are more expensive than your other options.
- Pros: Fast time to funding, borrowers can qualify with poor credit
- Cons: Higher APR, frequent daily or weekly repayments
- How to qualify: 500+ credit score, 1+ year in business, $100,000+ in annual revenue, no bankruptcies in past two years
Business expansion loans: Summary
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Want to compare more small-business loan options?
NerdWallet has created a comparison tool for the best small-business loans to meet your needs and goals. We gauged lender trustworthiness and user experience, among other factors, and arranged lenders by categories that include your revenue and how long you’ve been in business, so that you know which loans you qualify for.
Updated Dec. 8, 2017.