Lender | Best for | Max loan amount▼ | Min. credit score▼ | APR range | Max term length▼ |
---|---|---|---|---|---|
U.S. Small Business Administration | SBA loans | $5,000,000 | 650 | 11.00-14.50% | 25 years |
Bank of America 4.8/5.0 | Bank small-business loans | See review | 700 | See review | 5 years |
Wells Fargo 4.9/5.0 | Bank lines of credit | $150,000 | 680 | 9.75-17.75% | See review |
Bluevine 5.0/5.0 | Fast business loans | $250,000 | 625 | 20.00-50.00% | 6 months |
Fundbox 4.9/5.0 | Startup business loans | $150,000 | 600 | 36.00-99.00% | 6 months |
American Express Business Blueprint™ 4.6/5.0 | Online lines of credit | $250,000 | 660 | See review | 2 years |
OnDeck 4.7/5.0 | Short-term business loans | $250,000 | 625 | 27.20-99.90% | 2 years |
Funding Circle 4.5/5.0 | Long-term business loans | $500,000 | 660 | 15.22-45.00% | 7 years |
Fora Financial 4.5/5.0 | Business loans for bad credit | $1,500,000 | 570 | See review | 1 year and 6 months |
AltLINE 4.4/5.0 | Invoice factoring | $10,000,000 | 300 | See review | See review |
National Funding 4.2/5.0 | Equipment financing | $150,000 | 600 | See review | 5 years |
Accion 4.6/5.0 | Women and minority groups | $250,000 | 570 | 8.49-24.99% | 5 years |
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
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.00-14.50%
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.
Bank of America Business Advantage Unsecured Term Loan
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
- Can be slow to fund.
- Prepayment fees may apply to early repayments.
- Must be an existing Bank of America customer to apply online.
Max loan
Undisclosed
Min. Credit score
700
Best for
Bank lines of credit
A bank line of credit offers greater flexibility than a business 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.
Wells Fargo BusinessLine® Line of Credit
Pros
- Bank line of credit with competitive interest rates.
- Revolving credit line with no scheduled annual review.
- No collateral required; no prepayment penalties.
Cons
- Must be an established business with strong credit to qualify.
- May take longer to fund than online lenders.
- Annual fee and inactivity fees may apply.
Max loan
$150,000
Min. Credit score
680
Apr range
9.75-17.75%
Best for
Fast business loans
Online lenders typically offer simple applications and a streamlined underwriting process. Some companies can provide financing in as quickly as 24 hours — and most fund applications within a few business days.
Bluevine - Line of credit
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Requires personal guarantee.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared to traditional lenders.
Max loan
$250,000
Min. Credit score
625
Apr range
20.00-50.00%
Best for
Startup business loans
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.
Fundbox - Line of credit
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 with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
Best for
Online lines of credit
Online business lines of credit are best for fast access to working capital, especially for newer businesses or those with less-than-perfect credit histories.
American Express® Business Line of Credit
Pros
- Streamlined application process with minimal paperwork.
- Financing from $2,000 to $250,000 available.
- Accepts borrowers with a minimum FICO score of at least 660 at the time of application.
- 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.
Max loan
$250,000
Min. Credit score
660
Best for
Short-term business loans
Short-term business loans can be good for businesses that can’t qualify for an SBA or bank loan, or those that need quick funding. Short-term lenders generally have less-stringent eligibility requirements compared to traditional lenders and may work with startups or businesses with bad credit.
» MORE: Best short-term business loans
OnDeck - Online term loan
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 with traditional lenders.
- Requires business lien and personal guarantee.
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
Best for
Long-term business 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 business loan options.
» MORE: Best long-term business loans
Funding Circle - Online term loan
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
Cons
- Requires business lien and personal guarantee.
- Must be in business for a minimum of two years.
- Minimum credit score is higher than some other lenders.
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
Best for
Business loans for 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.
Fora Financial - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Max loan
$1,500,000
Min. Credit score
570
Best for
Invoice factoring
Invoice factoring allows business-to-business companies to access capital that’s tied up in unpaid invoices. This type of fast funding can be useful for managing cash flow issues or paying short-term expenses.
AltLINE - Invoice Factoring
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
Max loan
$10,000,000
Min. Credit score
300
Best for
Equipment financing
Equipment financing is best for small businesses looking 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.
National Funding - Equipment Financing
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing.
Max loan
$150,000
Min. Credit score
600
Best for
Women and minority groups
Nonprofit and community lenders often provide loans to traditionally underserved business owners who may not qualify for other funding options. These institutions also offer business training, coaching and other educational resources.
Accion Opportunity Fund - Small Business Working Capital Loan
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Max loan
$250,000
Min. Credit score
570
Apr range
8.49-24.99%
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Table of contents
What is a business loan?
- Why you need funding.
- How fast you need access to capital.
- How much capital you need.
- Your business’s qualifications.
- Total cost of debt.
Types of small-business loans
SBA loans
- Loan amounts: $30,000 to $5 million.
- Approximate APR range:11% to14.5%.
- Best for: Large one-time and longer-term investments, purchasing real estate or equipment, buying existing businesses and refinancing debt.
Business term loans
- Loan amounts: Up to $1 million.
- Approximate APR range: 6% to 99%.
- Best for: Working capital, large one-time investments, expanding your business.
Business lines of credit
- Credit line range: $1,000 to $250,000.
- Approximate APR range: 10% to 99%.
- Best for: Managing cash flow, handling unexpected expenses and financing short-term business needs.
Compare financing and apply
Equipment financing
- Loan amounts: Up to 100% of the value of the equipment, plus soft costs (e.g. installation, delivery, warranties).
- Approximate APR range: 4% to 45%.
- Best for: Purchasing machinery and equipment.
- Loan amounts: Up to $50,000.
- Approximate APR range: 8% to 30%.
- Best for: Smaller business investments, covering day-to-day expenses, working capital needs.
- Loan amounts: Up to 85% of the value of the property you own or are looking to buy.
- Approximate APR range: 4% to 15%.
- Best for: Purchasing and/or renovating commercial properties.
- Loan amounts: Up to 100% of the purchase price.
- Approximate APR range: 4% to 45%.
- Best for: Purchasing or refinancing cars, vans, trucks.
Government business loans
USDA business loans
SBA disaster loans
Additional business 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.
Personal loans
- A personal loan for business allows you to get funding based on your personal credit score and income instead of your business history.
- These loans are usually available in smaller amounts, but they can be used for a variety of purposes and fund within days.
Business credit cards
- A business credit card offers revolving credit, making it a solid option for short-term expenses.
- Although 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.
Merchant cash advances
- With a merchant cash advance (MCA), a financing company gives you an upfront sum of capital that you repay using a percentage of your debit and credit card sales, plus a fee.
- MCAs are typically fast to fund and easy to qualify for, but they’re one of the most expensive types of business funding, carrying APRs that can reach triple digitsbusiness financing options before turning to a merchant cash advance. . You should generally consider all other
- Small-business grants provide a free alternative to debt funding — offering access to capital that doesn’t need to be repaid.
- Business grants are available from a variety of sources, including federal, state and local governments, private companies and nonprofit organizations.
- A friend and family business loan is when you borrow money for your business from a close friend or family member.
- These loans are typically informal; they don’t require an application process or credit check. Creating a written loan agreement, however, can help preserve your personal relationship — just in case things don’t go as planned.
- Bootstrapping refers to entrepreneurs who use their own personal funds and resources (e.g. personal savings, credit cards) to start a business.
- Bootstrapping can be a good way to finance your business in its early stages, but you also risk losing your personal assets if your company isn’t successful.
- Crowdfunding allows you to use online platforms to raise money for your business. Supporters donate funds through your crowdfunding campaign, and in exchange, you usually offer rewards or equity in your company.
- Crowdfunding can be a good option for businesses with a strong customer base or large internet presence.
Small-business loans by interest rate
Minimum APR | Maximum APR | |
---|---|---|
Accion Opportunity Fund - Small Business Working Capital Loan | 8.49 %. | 24.99 %. |
AltLINE - Invoice Factoring | Discount rate of 0.80% per 30 days an invoice is factored. | Discount rate of 3.00% per 30 days an invoice is factored. |
Bank of America Business Advantage Unsecured Term Loan | 8.5%. | Undisclosed. |
Bluevine - Line of credit | 20 %. | 50 %. |
Fora Financial - Online term loan | Factor rate of 1.13. | Factor rate of 1.28. |
Fundbox - Line of credit | 36 %. | 99 %. |
Funding Circle - Online term loan | 15.22 %. | 45 %. |
National Funding - Equipment Financing | Factor rates start at 1.11. | Undisclosed. |
OnDeck - Online term loan | 27.2 %. | 99.9 %. |
SBA 7(a) loan | 11 %. | 14.5 %. |
Wells Fargo BusinessLine® Line of Credit | 9.75 %. | 17.75 %. |
How to decide if it’s the right time to get a business loan
- Build your credit score.
- Offer collateral.
- Pay down existing debt.
- Improve your cash flow.
- Shop and compare multiple financing options.
💬 From our experts: How does the Fed rate cut affect business loans?
How do I qualify for a business loan?
How do I get a loan for my small business?
📋 Business loan application checklist
Small-business loans: Frequently asked questions
🏦 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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