Small business loans are used to cover payroll, inventory, equipment, commercial real estate costs and other expenses related to growing a small business.
For this guide, we selected some of the best small business loan lenders of 2022 that offer quick funding times and a variety of loan options to choose from, so you can get the funding you need, when you need it.
Our Top Picks for Best Small Business Loans
- Bluevine - Best for Lines of Credit
- OnDeck - Best for Prepayment and Loyalty Benefits
- Fundbox - Best for Cash Flow Predictions
- National Funding - Best for Quick Access to Funds
- Biz2credit - Best for Business Insights
- Lendio - Best for Startup Loans
Best Small Business Loans Reviews
Why we chose it: We chose Bluevine as the best small business loan provider for lines of credit for its quick funding time — as little as a few hours for those who choose bank wire transfers — and lines of credit of up to $250,000. Other direct lenders offer lower credit limits for this financing option.
- Unlimited number of bank transactions per month
- Account earns interest
- Free bill and vendor payments
- $2.50 fee for using an out-of-network ATM
- No out-of-network fee reimbursement
- $4.95 fee for cash deposits at Green Dot retailers
- Types of loans:
- Lines of credit
- As low as 6.2% (Disclaimer: This rate is a simple interest rate calculated from total repayments over 26 weeks)
- 6 or 12 months
- Min. credit score:
- Max. Line of credit:
- 1.7% per week or 7% per month for line of credit draws, $15 for bank wires (same-day funding), no opening, closing or prepayment fees
Bluevine only offers business checking accounts and lines of credit. A line of credit can provide your small businesses with quick funding you can continue to draw from as you repay. Some things to keep in mind about the Bluevine line of credit, however, are that annual percentage rates can be quite high — reaching over 70% according to some sources — and payments must be made weekly or monthly, so you may want to consider a different funding option if your income stream fluctuates month to month.
Another important consideration for those interested in same-day funding is that Bluevine charges a $15 fee for direct wire transfers. ACH transfers are free, but the funds may take up to three days to reflect in your account.
To qualify for a Bluevine line of credit (issued by Utah-based Celtic Bank), your business must be an LLC or corporation, have been in operation for at least 6 months (the minimum required by most online small business lenders), make at least $10,000 in monthly revenue (or $120,000 annually, about $20,000 more than what other competitors require) and have a personal credit score of at least 600.
Why we chose it: OnDeck is the best small business loan provider for prepayment and loyalty benefits because it will waive the remaining interest on your existing loan if you renew your contract or take out a new loan — provided you have paid down 50% of your current balance. You may also be eligible to waive the origination fee on subsequent loans.
- No-cost same-day funding in certain states
- No prepayment penalties for qualifying businesses
- Loyalty benefits when you pay down 50% of your loan and request a new one
- Prepayment Benefit lets you waive remaining interest payments
- Higher interest rates on loans with Prepayment Benefit option
- Same-day funding only available in certain states and for loans of up to $100k
- Requires a business lien and personal guarantee
- Not available in NV, ND or SD
- Types of loans:
- Short term business loans, business lines of credit
- Starting at 35% APR, but the average is 54.95% APR
- Up to 36 months for term loans and 12 months for lines of credit
- Min. credit score:
- Max. loan amount:
- $500,000 for term loans and $100,000 for lines of credit
- Monthly maintenance fee on lines of credit, no draw, opening, closing or prepayment fees
Besides perks for those who renew their funding contract with OnDeck, the company also offers a prepayment benefit for qualifying businesses. If you apply and are approved for this benefit, you could waive the remaining interest payments on a loan you have paid off before the end of its term. However, if you do not qualify for the prepayment benefit, you would still be responsible for 75% of the remaining interest. Moreover, the prepayment benefit comes with a higher interest rate, so you could end up paying more for what you borrow.
Another important consideration is that OnDeck requires customers to sign a personal guarantee and agree to a blanket lien on their business assets. This means that you would be liable to repay your business’ debts if your company defaults on the loan.
To qualify for a short-term loan with OnDeck, you must make at least $100,000 in annual revenue, have a personal FICO score of at least 600 and have been in business for at least one year — longer than other lenders require. However, the company claims their average customer has been in business for over 3 years, makes $300,000 in annual revenue and credit score of over 650. With this in mind, and considering that average rates with OnDeck are around 54.24% for term loans and 48.06% for lines of credit, customers with less than stellar credit and lower annual revenue streams may want to look elsewhere.
Why we chose it: We chose Fundbox as the best small business loan provider for cash flow predictions because of its free insights feature for qualifying businesses. This feature offers future revenue projections and sends alerts when cash flow drops below a predetermined threshold.
- Free cash flow predictions based on historical transactions
- A three-day grace period on line of credit payments
- No prepayment penalty or origination fee
- Cash Flow Insights currently in beta and not available to all companies
- Charges draw fee for lines of credit
- Types of loans:
- Lines of credit and short-term loans
- Starting at 4.66%–8.99% for lines of credit and 8.33%–18% for term loans
- 12 or 24 weeks for lines of credit, 24 or 52 weeks for term loans
- Min. credit score:
- Max. loan amount:
- Up to $150,000 for lines of credit and term loans
Fundbox offers free access to an Insights feature that lets you connect your compatible business accounts to see cash flow predictions based on historical data. You can also simulate business scenarios by adding potential future transactions and get alerts if your cash flow drops below your predetermined threshold. While the Insights feature is in beta and may not be available to all companies, it could be a useful tool for established, growing businesses that want a clearer picture of potential revenue fluctuations over time.
Fundbox does not charge prepayment penalties or origination fees. It does, however, charge draw fees on its lines of credit, but extends a three-day grace period for missed payments for this particular funding option.
To qualify for a loan or line of credit with Fundbox, your business must have been using a compatible business bank account for at least three months before applying for the loan. You also need to have been in business for at least six months, a minimum credit score of 600 and at least $100,000 in annual revenue.
Why we chose it: We chose National Funding as the best small business loan provider for borrowers who need cash fast. The company advertises funds in as little as 24 hours, faster than most other small business lenders.
- Accepts applicants with poor credit
- Early payoff discount for certain loan options
- Approval in 24 hours, subject to requirements
- No information about average interest rates or fees
- Requires daily or weekly payments for working capital loans
- Types of loans:
- Small business loans, working capital loans, short term business loans, unsecured business loans
- Up to 24 months for working capital loans and 5 years for equipment financing
- Min. credit score:
- 600 (fair to excellent)
- Max. loan amount:
- Origination fee
National Funding is one of the few online small business lenders we have researched that cater specifically to borrowers who need quick access to funds. In addition, it accepts credit scores as low as 500 for new customers or 475 for returning customers and has an entire section with information on how to improve your chances of approval for a small business loan when you have bad credit. And while National Funding considers annual business revenue and years in business, it doesn’t require collateral.
Other benefits of doing business with National Funding include a 6% early payoff discount for equipment financing customers and a 7% early payoff discount for working capital customers who pay off their remaining balance within 100 days of signing their contract. To qualify for the early payoff discount, customers must pay in full, be current with payments and have their accounts in good standing.
Other than general information, National Funding does not disclose average rates, fees or additional qualification requirements.
Why we chose it: Biz2credit is our best small business loan provider for business insights because of its BizAnalyzer feature, which gives business owners a scorecard based on their creditworthiness and the financial health of their business as compared to other companies in the industry. This tool also provides personalized feedback and financial recommendations.
- BizAnalyzer gives you a financial scorecard and personalized tips
- No application fees
- Obtain funding options and a decision within 24 hours
- Special lending programs for women, veterans and minorities
- Origination or closing fee for most bank financing products
- Underwriting fee for most non-bank financing products
- Types of Loans:
- SBA loans, working capital loans, lines of credit, unsecured business loans, equipment financing and merchant cash advances, among others
- Starting at 7.99% for term loans, N/A for other loan types
- Up 36 months for commercial real estate and term loans, N/A for other loan types
- Min. credit score:
- 575 for working capital loans and 660 for term loans
- Max. loan amount:
- Up to $2M for working capital loans, $500k for term loans and $6M for commercial real estate loans
- Underwriting fees for non-bank financing ($250-$400), closing or origination fees for most bank financing products and commercial real estate loans, no application fees
One perk of working with Biz2credit is its BizAnalyzer feature, which gives you a financial scorecard based on how well your business is performing against other competitors and provides personalized financial recommendations to help your business perform even better. This feature could be especially helpful if you have an expanding business and are looking to improve your creditworthiness to qualify for other loan types.
As an online marketplace, Biz2credit also offers a broad selection of financing options from banks and online lenders, including special lending programs for women, minorities and veterans. The lending platform states you can apply in as little as four minutes, get approval in just 24 hours and obtain funding in as fast as 72 hours. Of course, this will depend on the lender and loan type you select, as will specific qualification requirements.
To qualify for a working capital loan through Biz2credit, you will need a credit score of at least 575, have been in business for 6 months and $250,000 in annual revenue. For term loans, you will need the same minimum revenue but a score of 660 or above and to have been in business for at least 18 months.
Why we chose it: We chose Lendio as the best small business loan provider for startup loans because it is among the few marketplaces offering this funding option for terms of up to 25 years and at competitive rates.
- Startup loans for up to $750,000
- Compare over 75 online and bank lenders
- Up to $2 million for term loans and merchant cash advances
- Up to $5 million for business acquisition and other loan types
- Some lenders charge prepayment penalties
- Types of loans:
- SBA loans, and more
- 3% to 60% depending on funding type
- 1–3 years short-term loans, 1–5 years term loans, up to 25 years for startup loans
- Min. credit score:
- Depends on lender/funding type, but 660 for most types
- Prepayment penalties and origination fees, depending on lender
As a marketplace, Lendio offers a broad range of loan options to choose from. Chief among them are startup loans, which not all lenders offer and can be instrumental in building a new business from the ground up. You can obtain a startup loan through Lendio for amounts of up to $750,000, terms of up to 25 years and rates ranging from 0% to 17%.
Another advantage of working with Lendio is that the marketplace offers loans from over 75 different lenders, including Bank of America, American Express, On Deck Capital, Mulligan Funding, Funding Circle and Fundbox, to name a few. Borrowers can apply online in as little as 15 minutes and obtain funding within 24 hours, depending on the funding type.
While qualification requirements will vary by lender and loan type, startup loans require a credit score of 660 and above. The company must also have been in business for at least 6 months. Depending on the lender, collateral in the form or business or personal assets may be required.
Other small business loan companies we considered
Kabbage, an American Express company, didn't make it into our main company list because of its limited funding options and lower loan amounts. Like BlueVine, it only offers lines of credit. Unlike BlueVine, however, loan amounts only go up to $150,000.
- No origination, annual fees, monthly maintenance or documentation fees
- You can return your loan within 24 hours at no extra cost
- Only offers lines of credit
- Draws are treated as separate installment loans
- Every loan requires a personal guarantee
With Kiva, loans are funded through a system similar to crowdfunding, where individuals choose to lend you a small amount of money (in increments of $25 or more) until you reach your funding goal. Once you reach the goal, your funds are disbursed and you can begin repaying the loan over time, without interest. Once your investors are repaid, they can choose to either reinvest in other businesses or withdraw their funds. While Kiva loans have a 96% repayment rate, they are subject to underwriting and approval. Additionally, they are only available to borrowers who are financially excluded or have a social impact on their communities.
- Supports artisans, small businesses and developing communities
- Available in 77 countries
- No minimum credit score requirement
- Longer waiting period since loans are crowdfunded
- Direct sales, financial investing and franchise businesses are ineligible
Funding Circle is a Peer-to-Peer lending platform that matches small businesses in need of funding with individual investors willing to loan them those funds. While the platform offers funding in as little as 48 hours for term loans and same-day funding for lines of credit, it also has a high credit score requirement for all loan types (660) and applicants must have been in business for a minimum of two years (other lenders require six months to a year) and provide a personal guarantee or agree to a lien on business assets to qualify for longer loan terms.
- Online application, with disbursement in as little as three business days
- Make biweekly or monthly payments on term loans
- Same-day funding for lines of credit
- Higher credit score requirement than other online lenders
- Must have been in business for at least 2 years
- Personal guarantee or lien on assets required for most 3–5 year term loans
- Not available in NV
As a bank lender, TD Bank offers some of the highest loan amounts available to small business borrowers — up to $1 million. However, to apply for loan amounts over $100,000, borrowers must complete their loan application at a TD Bank Branch, only available in 16 states and DC. It must also be noted that while small business loan rates at banks are lower than those offered by online small business lenders, qualification requirements tend to be stricter and funding times may take longer in consequence.
- Loan amounts of up to $1 million
- Fixed monthly payments on loans
- Interest-only payment option for lines of credit
- Only available in 16 states
- No information about average rates or fees
As a marketplace, Fundera offers a range of small business financing options from various lenders, including some that accept applicants with credit scores as low as 500. While it offers a variety of helpful guides and articles and is more transparent than similar marketplaces with regard to rates, Fundera doesn’t stand out in either selection of loan types or additional benefits for customers.
- Transparency regarding rates and qualification requirements
- Ample selection of loan options to choose from
- Vast resource library
- No specific information about fees
Business Loans and Covid-19
The Paycheck Protection Program (PPP) ended on May 31st, 2021. Eligible borrowers can now apply for the PPP loan forgiveness program. Borrowers can apply for loan forgiveness up to the loan’s maturity date. For the application, they must submit forms as well as payroll and non-payroll evidence of how they used the funds.
The Small Business Administration (SBA) has other relief programs to support small businesses during the ongoing pandemic.
- Economic Injury Disaster Loan (EIDL): This program helps small businesses and nonprofit organizations that have experienced a loss and are in need of capital to meet financial obligations and operating expenses. While the program is no longer accepting new applications, it will continue accepting appeals, reconsiderations and requests for increases.
- SBA Debt Relief: Existing SBA disaster loans approved before 2020 that have been in regular servicing status since March 1, 2020 received automatic deferment of principal and interest payments until December 31 of that year. Deferment was then extended for an additional 12 months, so regular payments will resume before March 21, 2022, unless the borrower continues making payments despite deferment. Interest will continue to accrue on these loans.
- Shuttered Venue Operations Grant (SVOG): This grant was created to support small businesses, nonprofits and venues affected by the pandemic. The program will no longer accept new applications, yet those who are participating in the program will continue receiving economic aid. As of August of 2021, the SBA was accepting applications for reconsideration of both award amount and appeals, but by invitation only.
- Restaurant Revitalization Fund (RRF): Created to provide relief to restaurants, bars, and other related businesses affected by Covid-19. This fund prioritizes businesses that are owned (at least 51%) by women, veterans, and socially- and economically-disadvantaged individuals.
Some of these funds are available until exhaustion. Check their availability with your preferred lender or with the SBA.
To protect your business from other emergencies, check our list of the best business insurance companies.
Small Business Loans Guide
The following guide contains general information about small business loans, including how they work, the different types of loans available and how to qualify for small business funding.
How do small business loans work?
Small business loans provide funding to small business owners, whether they need capital to expand, cover payroll, purchase real estate, acquire new equipment or inventory, or meet other day-to-day expenses. The U.S. Small Business Administration (SBA) defines small businesses as those with 500 employees or less. Other metrics, such as business revenue, will depend on the industry.
Similar to personal loans, small business loans have minimum qualification requirements that vary by lender and loan type. In general, however, small business owners will need to have a good credit score and documentation that evidences business revenue to qualify.
There are many different funding options available to small business owners, and these can come from several sources. You can get small business loans directly from bank lenders, which typically offer lower rates but have more stringent qualification requirements and funding times may take longer.
You can also get loans from non-bank online lenders, such as the ones listed at the start of this article. Online lenders offer quick funding times and have more flexible qualification requirements than bank lenders, yet their rates tend to be much higher than those offered by bank lenders.
Types of small business loans
There are many different funding options small business owners may qualify for, including the following.
Commercial real estate loans
Commercial real estate loans are used to purchase or renovate commercial property. Typically, lenders require business owners to occupy at least more than half of the property to qualify for this type of loan.
With invoice factoring, also called accounts receivable financing, you sell your outstanding customer invoices to a factoring company at a discount. The factoring company will give you a portion (say 90%) of the total outstanding amount and then collect payment directly from your customers. Once it has collected payment from your customers, the factoring company will release the rest of the funds to you, minus a factoring fee.
Equipment loans are commercial loans that allow you to buy or lease the equipment you need without putting any money upfront. These loans also use the equipment itself as collateral; if you can’t repay the loan, the lender will seize your equipment.
Business lines of credit
Business lines of credit are revolving loans, which means more funds become available to you as you repay what you borrow — similar to a credit card. Lines of credit are a good alternative for companies that need funds quickly to cover emergency expenses. You pay interest on what you borrow, and repayments are scheduled daily, weekly, or monthly.
Term loans are disbursed as lump sums and paid over a predetermined period, also known as term. Term loans can have fixed or variable interest rates and repayment terms of up to five years.
Merchant cash advances
A merchant cash advance allows you to get a lump sum amount in exchange for a percentage of your future credit and debit card sales. You can get same-day funding with a merchant cash advance, which makes this a great option for emergencies. However, MCA rates can be extremely high and repayments must be made daily or weekly.
Franchise loans allow you to get upfront financing to cover franchise fees, legal fees, real estate costs and other day-to-day expenses related to becoming a franchisee.
SBA loans and how they work
The SBA backs traditional bank loans for small businesses by covering a portion of the loan if the borrower defaults. Since there is less risk for lenders, rates for SBA-backed loans are more competitive and may feature better terms.
For example, during the Covid-19 pandemic, the SBA extended a number of relief programs to help small business owners affected by the health crisis, including deferment of principal and interest payments for disaster loans.
It’s important to note that the SBA does not lend money directly to small businesses unless they are located in a declared disaster area. Instead, the SBA sets lending guidelines for the lenders it partners with, including banks, community organizations and microlenders.
Difference between SBA loans and other small business loans
Small business loans guaranteed by the SBA have lower down payments, flexible requirements and, in some cases, do not require collateral. However, it may take up to three months for you to receive an SBA-backed loan.
The SBA guarantees loans for amounts between $30,000 and $5 million, with annual percentage rates ranging from 5.5% to 8%. They are best suited for long-term investments, buying real estate or equipment, purchasing other businesses and refinancing existing loans.
Types of SBA loans
The following are some common types of SBA loans.
SBA 7(a) loans: The most common type of small business loan. These loans are best suited for real estate acquisition, yet can also be used for short- and long-term working capital, furniture and supplies, acquisition and expansion.
Real Estate and Equipment loans (CDC/504): Provide fixed-rate financing of up to $5 million to promote business growth and employment development. These loans can be used to purchase land, build facilities, obtain equipment and fund renovations. They may not be used as working capital, to pay or refinance debt, for investments or for rental properties.
Microloans: Assists small businesses and specific non-profit childcare centers. There are microloans available up to $50,000. This type of loan can be used as working capital and acquiring supplies, equipment, furniture and inventory.
Disaster loans: Low-interest loans offered to small businesses located in declared disaster areas. Disaster loans can be used to repair or replace real estate, personal property, machinery, equipment, inventory or business assets.
How to get a small business loan
When looking for small business funding, consider the following tips.
1. Compare interest rates
Shop around and compare funding options from different lenders to get the lowest rate. Keep in mind that revolving loans, credit cards, accounts receivable financing and merchant cash advances can have higher interest rates than other funding options. Additionally, non-bank online lenders tend to offer much higher rates than banks.
2. Look into fees
Also take into account any fees associated with the lender you are doing business with or the loan type you’re looking to obtain. Most lenders will charge an origination fee, yet many will waive prepayment penalties and closing fees. Other fees may include funding, opening, closing, draw, maintenance and wire transfer fees, just to name a few.
3. Prepare to apply
To qualify for a small business loan, you will need a good business or personal credit score (rates of 660 or above are preferable) and a business checking account. You will also need to meet a minimum revenue requirement (most online lenders require at least $100,000 in annual revenue) as well as business, legal and financial documentation:
- Loan application form
- Evidence of business history
- Business plan
- Business credit report
- Personal and business tax returns
- Bank statements
- Accounts receivable and accounts payable
- Collateral in the form of business or personal assets
- Legal documents such as articles of incorporation
Where to get a small business loan
You can get a small business loan through a bank or a non-bank online lender. Again, banks tend to offer more competitive rates than online lenders, but online lenders typically offer quicker application and funding times.
Another form of lending that’s become popular for small businesses is peer-to-peer lending. P2P loans are funded by individual investors as opposed to lending institutions. These loans are available through P2P lending platforms that act as intermediaries to match investors with qualifying borrowers.
Business credit vs. Personal credit
When applying for a business loan, lenders will look at your business credit score as well as your personal credit score. While these two scores are different, both measure creditworthiness and the ability to pay back loans.
Based on your individual credit profile, your FICO credit score can range from 300 to 850. Your business credit score, on the other hand, is usually measured from zero to 100.
Since most business lenders require you to have solid personal credit to qualify, consider improving your credit score before applying for a loan.
You can improve your credit on your own at no cost or pay for help from the best credit repair companies.
If you need financial assistance now and don’t have time to work on credit repair, take a look at our selection for the best loans for bad credit.
Best Small Business Loans FAQs
How to apply for a small business loan?
You can apply for a small business loan online through a non-bank lender such as those featured on our top picks for the best small business loans. While some bank lenders allow you to apply online, most traditional lending institutions require you to submit your application in person at a branch.
As with any other type of loan, you will need to complete an application form and have your financial and legal documentation at hand. This could include your business and personal tax returns, personal financial statements, and business license and permits, among others.
How do small business loans work?
Small business loans provide capital to small businesses for a variety of purposes. These can be obtained through bank lenders or non-bank online lenders, including lending marketplaces and peer-to-peer lending platforms.
There are many funding options available to small businesses, and they all feature different rates and repayment terms. In general, you can borrow up to a maximum loan amount and repay it back with interest over a set period of time.
How to qualify for a small business loan?
Where to get a small business loan?
You can get a small business loan from traditional banks or financial institutions as well as non-bank online lenders, including lending marketplaces and peer-to-peer lending platforms
Check out our top picks for the best small business loans for some great options.
How SBA loans work
SBA loans are backed by the U.S. Small Business Administration (SBA), which means the government agency is responsible for a portion of the loan if the borrower defaults.
You can get an SBA-backed loan from banks and non-bank online lenders. While these partner lenders issue the loans, the SBA sets the lending guidelines that establish their interest rates, loan amounts and repayment terms.
How We Chose the Best Small Business Loans
Here are all the most important factors we considered as we compiled this list of the best business loans and lenders for 2022.
- Easy application process. We looked for lenders offering a quick and simple online application, especially those offering same-day approval.
- Fast FundingTimes. Our top lenders provide funding in as little as 24 hours and as much as three days after approval.
- Flexible qualification requirements. We gave precedence to lenders accepting credit scores around 660 or below, between 6 and 12 months in business and annual revenue of less than $200,000.
- Variety of funding options and high loan amounts. With few exceptions, we favored lenders offering a variety of funding options and higher-than-average loan amounts.