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January 16, 2020
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The best business loans help solo entrepreneurs and small business owners grow by putting the working capital they need within reach. These loans can be used to cover payroll, fund new equipment or inventory, or invest in new ventures — almost anything that can enable a business to grow and expand, remain operational, or boost profits over time.

If you’re in the market for a small business loan, you may be wondering whether you’ll qualify and if so, the type of interest rate you’ll pay. After all, small business loans are notorious for being more difficult to get approved than, say, a personal loan.

Fortunately, a number of small business lenders offer high-quality loans that might surprise you with their reasonable rates and fair terms. Many also let you apply online and get a decision within a single business day.

For this guide, we compared a number of small business lenders and their loan products. The best business loans available today are featured below, offering loans with reasonable terms and fees for qualifying borrowers.

Important Points to Know About the Best Small Business Loans

  • Some lenders require a minimum amount of proven business income for you to qualify. This might make them a poor choice for entrepreneurs who want to use loan funds to start a brand new venture.
  • Some small business lenders offer loans and others offer lines of credit. Some lenders on our list offer both. A loan is disbursed as a lump sum in most cases, while a business line of credit is a pool that you can tap incrementally, similar to a credit card.
  • Your personal credit score is different from your business credit score. You have a FICO credit score that ranges from 300 to 850, based on your personal credit profile. Your business credit score is usually measured in increments from zero to 100.
  • Most business lenders require you to have solid personal and business credit in order to qualify.

The Best Small Business Loans of 2020

While the best loan for you will depend on multiple individual factors, some lenders stand out for their low starting rates, fair loan terms, and easy application process. The best business loans featured below meet the criteria we considered for this study.

  • Rapid Finance: Best Small Business Loans with the Most Diverse Offerings
  • OnDeck: Best Small Business Loans for New Business Owners
  • Fundbox: Best Small Business Loans for Easy Approvals
  • Funding Circle: Best Small Business Loans with a Low APR
  • National Funding: Best for Short-Term Borrowing

Best Small Business Loan Reviews

The best small business loan for you will depend on how much you want to borrow, your business history, and your credit score. The reviews below showcase each of our top lenders, making it easy for you to compare.

Rapid Finance: Best Small Business Loans with the Most Diverse Offerings

Rapid Finance offers business loans with an easy online application process and funding as soon as the next business day. You can borrow up to $500,000, which is more than many other lenders in this space offer. Rapid Finance offers a wide variety of products, from short-term bridge loans and lines of credit to Small Business Administration (SBA) loans for those who qualify.

Rapid Finance has an A+ rating with the Better Business Bureau (BBB), garnering many 5-star reviews on the bureau’s website. Keep in mind though that Rapid Finance loans may not work for everyone: This lender prefers to work with businesses that have been in operation for at least two years with a minimum of $60,000 in annual revenue. You may also need a personal FICO score of at least 600 to be considered.

Summary of benefits:

  • Loans up to $500,000, with disbursement of funds as soon as the next business day
  • Short-term financing, lines of credit, and SBA loans
  • A+ rating with the BBB
  • Required minimum of two years in business with at least $60,000 in annual revenue

OnDeck: Best Small Business Loans for New Business Owners

OnDeck is another small business lender that offers both small business loans and lines of credit. You can borrow up to $500,000 with a small business loan, while lines of credit are offered in amounts up to $100,000. OnDeck also boasts an A+ rating with the Better Business Bureau (BBB), and user reviews tend to be excellent, with an average of 5 stars on Trustpilot. You have to be in business for just one year with OnDeck, whereas many other small business lenders require you to have a longer business history for approval.

You can apply for a small business loan with OnDeck online and receive your funds in as little as 24 hours. Your business must have at least $100,000 in revenue, however, and you need to be in operation for at least one year to qualify. OnDeck also has requirements for your personal credit, including a minimum FICO score of 600.

Summary of benefits:

  • Lines of credit with limits of $100,000 and small business loans up to $500,000
  • Online applications and approvals in minutes
  • A+ rating with BBB
  • Required minimum revenue of $100,000 and at least 12 months in business

Fundbox: Best Small Business Loans for Easy Approvals

Fundbox makes it easy for businesses to get approved for a line of credit, but you do have to connect your business banking to its platform for consideration. No minimum credit score is required, nor is a minimum revenue requirement in place. FundBox works differently than other small business loans, since it provides an advance on outstanding invoices your customers owe in addition to lines of credit.

Fundbox loan products don’t have any early payment fees, so you can pay off what you borrow any time without penalty. The company says you can get a credit decision in as little as three minutes, making it one of the easiest lenders for online approvals today.

Summary of benefits:

  • Line of credit or invoice advances
  • Lines of credit are available in amounts up to $100,000
  • No minimum credit score or minimum revenue requirements
  • No early payment fees

Funding Circle: Best Small Business Loans with a Low APR

Funding Circle offers small business loans with starting annual percentage rates (APRs ) as low as 4.99%. Since the lender’s founding, it has funded $10.9 billion through its online platform. You can apply for a loan online, borrow up to $500,000 if you qualify, and have your loan funds deposited in your bank account in as little as three business days.

Funding Circle loans come with fixed monthly payments, and you’ll never owe an early payment penalty if you pay your loan off early. You can receive a loan decision in as little as 24 hours, and applying won’t affect your credit score. Funding Circle has an A+ rating with the Better Business Bureau (BBB).

Summary of benefits:

  • Loans up to $500,000
  • Interest rates start at 4.99%
  • Online applications, with fund disbursement in as little as three business days
  • A+ rating with the BBB

National Funding: Best for Short-Term Borrowing

National Funding offers small business loans in amounts up to $500,000 with no upfront costs. You can apply online and have your loan approved the same day, and you can even receive your loan funds in as little as 24 hours. Early payoff discounts up to 7% of the total remaining balance are also available to qualified loan customers who pay their loans off in good standing.

This online lender may not be a household name, but National Funding boasts an A+ rating with the Better Business Bureau (BBB) and an average of 4.5 stars out of 5 across more than 1,100 reviews on Trustpilot.

Summary of benefits:

  • Loans up to $500,000 with no upfront costs
  • Online applications, with loan disbursement in as little as 24 hours
  • Early payoff discounts available
  • A+ rating with the BBB

How We Determined the Best Small Business Loans of 2020

The best small business loans available today all work differently, but each lender was held to a high standard in terms of loan offerings and the value they offer their customers. Here are all the most important factors we considered as we compiled this list of the best business loans and lenders for 2020 and beyond.

Easy Application Process

The top business lenders offering small business loans today mostly operate online, so an easy application process is important. We gave the highest marks to business lenders who let consumers apply for their loans online, and especially those who offer loan decisions the same business day.

Transparency

While small business loans have their share of interest charges and fees, we gave precedence to lenders who are transparent about what their loans cost. All of the lenders on this list offer information on their websites to help borrowers figure out how much they’ll pay in interest and fees over the life of their loan.

Ratings and User Reviews

We considered ratings from third party agencies in our study, and we prioritized lenders that have an A+ rating with the BBB. We also considered user experience and loan reviews on websites like Trustpilot.

Fast Loan Funding

While an easy loan application process is crucial, we also gave high marks to lenders who offer fast loan funding. The top lenders on this list make it possible to receive your loan funds in anywhere between 24 hours and three days after you get approved.

How to Land the Best Small Business Loan

The best small business loans of 2020 help entrepreneurs and small business owners find the funding they need to reach their long-term goals. To acquire the ideal loan for your unique situation, however, you may need to do some legwork upfront.

The following tips can help you become a better candidate and save money on your small business loan over the long haul.

Check your personal credit score

While your business credit score is a big consideration with most small business lenders, your personal credit score will also be considered. This means you may want to take a few minutes to check your credit score before you apply for a small business loan. If your score needs improvement, it also means you could be better off boosting your personal credit before you apply.

Some of the lenders on our list let you qualify for small business loans with a FICO score as low as 600, but that doesn’t mean you’ll obtain the lowest interest rate or best terms.

There are many steps you can take to improve your personal credit, including paying all your personal bills early or on time and paying off debt to decrease your overall credit utilization. By taking these steps early on, you could increase your FICO score and potentially qualify for a small business loan with lower long-term costs.

Consider small business loans and lines of credit

As you continue searching for the right loan for your needs, don’t forget to weigh whether you need a lump sum or a line of credit to borrow against. While either option might work for you, a line of credit lets you “borrow as you go,” which could mean borrowing a lower amount and paying less interest in the end.

Consider both options, including interest rates and upfront fees, before you decide which one is best for you.

Check for upfront fees, including origination or guarantee fees

Many small business loans charge any number of fees, including an origination fee. SBA loans, or small business loans backed by the Small Business Administration, charge guarantee fees that are based on a percentage of your loan amount.

Depending on the lender, you may be able to pay upfront loan fees or finance them in your loan payoff amount. Make sure you know and understand any fees you’ll be charged and when, so you can make an informed decision.

Make sure you have the option to pay your loan off early without penalty

Finally, don’t forget there’s one fee you never want to pay — the pre-payment penalty. This fee can be charged on some loans when the borrower pays their loan off early, but you shouldn’t be penalized for responsible repayment.

We suggest considering only small business lenders that let you pay off your loan at any time without penalty. That way, you can pay at a pace that works for you, even early if your finances allow.

Summary: Best Small Business Loans of 2020

Small Business Lender “Best Of” Category
Rapid Finance Best Small Business Loans with with the Most Diverse Offerings
OnDeck Best Small Business Loans for New Business Owners
Fundbox Best Small Business Loans for Easy Approvals
Funding Circle Best Small Business Loans with a Low APR
National Funding Best for Short-Term Borrowing

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