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Business Expansion Loans: Find the Best Option for You

June 7, 2018
Small Business, Small Business Loans
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

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

SmartBiz

Runners-up

Credibility Capital

Funding Circle

BEST FOR SPEED, EASE OF QUALIFYING

OnDeck

SUMMARY OF OPTIONS

Business expansion loans

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.

SBA 7(a) Loan

  • Loan amount: $30,000 to $350,000
  • APR: 8.53% to 9.83%
  • Loan term: 10 years
  • Funding time: As quickly as seven days but typically several weeks
  • Read our SmartBiz review
Apply now at SmartBiz

SBA 7(a) Commercial Real Estate Loan

  • Loan amount: $500,000 to $5 million
  • APR: 6.62% to 6.66%
  • Loan term: 25 years
  • Funding time: Within 45 days
  • Read our SmartBiz review
Get started at SmartBiz

Runners-up

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.

  • Loan amount: $10,000 to $350,000
  • APR: 10% to 25%
  • Loan term: 1, 2 or 3 years
  • Funding time: 7 days on average
  • Read our Credibility Capital review
Apply now at Credibility Capital

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.

  • Loan amount: $25,000 to $500,000
  • APR: 10.91% to 35.5%
  • Loan term: 1 to 5 years
  • Funding time: Average of 10 days
  • Read our Funding Circle review
Apply now at Funding Circle


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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 16.7% to 99.4% as of the first quarter of 2018, the loans are more expensive than your other options.

Term Loan

  • Loan amount: $5,000 to $500,000.
  • APR: 16.7% to 99.4%, as of Q1 2018
  • Loan term: Repaid daily or weekly for 3 to 36 months.
  • Funding time: As fast as 24 hours but typically a few days.
  • Read our OnDeck review.

*APRs change quarterly

Apply now at OnDeck

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Business expansion loans: Summary

Funding optionsGood option for: Do you qualify?Loan amount & APR
smartbiz
Apply now at SmartBiz
  • Good personal credit
  • Low-cost SBA loans
  • 600+ personal credit score for loans of $30,000 to $150,000
  • 650+ personal credit score for loans over $150,000
  • At least two years in business
  • $50,000+ annual revenue
  • $30,000 to $350,000
  • 8.27% to 9.57%
credibilitycapitallogo
Apply now at Credibility Capital
  • Good personal credit
  • Businesses with strong cash flow
  • 650+ personal credit score
  • At least 18 months in business
  • $150,000+ in annual revenue
  • $10,000 to $350,000
  • 10% to 25%
FundingCircle_logo_new
Apply now at Funding Circle
  • Good personal credit
  • Established businesses
  • 620+ personal credit score
  • At least 2 years in business
  • No annual revenue requirement
  • $25,000 to $500,000
  • 7.4% to 36%
ondeck
Apply now at OnDeck
  • Bad personal credit
  • Fast cash

  • 500+ personal credit score
  • At least one year in business
  • $100,000+ annual revenue
  • $5,000 to $500,000
  • 16.7% to 99.4% as of Q1 2018

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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.

 

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