Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Small Business Loans Best Small Business Loans Updated Mar 25, 2024 9-min read Written by Cassidy Horton Written by Cassidy Horton Expertise: Banking, insurance, home loans Cassidy Horton is a finance writer passionate about helping people find financial freedom. With an MBA and a bachelor's in public relations, her work has been published more than a thousand times online. Learn more about Cassidy Horton Looking for the best small business loans to grow your company? Small business loans provide financing to purchase equipment, expand operations, hire employees, and move into larger spaces. Whether you need a few thousand dollars or a few million, business loans can inject working capital into your company to take it to the next level. But with so many loan options on the market, finding the best one for your needs can be tricky. So we’ve done the research for you. Read on to compare the best small business loans for specific categories, including real estate, line of credit, fast funding, and more. Plus, find out what you need to apply. Table of Contents Skip to Section Best small business loansTypes of small business loansHow to choose the right small business loanHow to get a small business loanAlternatives to small business loansSmall business loan FAQ Best small business loans Finding the right small business loan can affect the growth and sustainability of a business. We’ve researched five lenders offering the best small business loans, evaluating them based on interest rates, loan terms, and loan types. Each lender provides unique advantages tailored to specific business needs, whether for expansion, cash flow management, equipment financing, or other needs. Click the lender’s name in the table below for more details about its small business loans. LenderBest forNew SilverRental propertyBluevineLine of creditKapitusCustomizationOnDeckFast fundingFunding CircleGrowing businesses New Silver Get more info Best for rental property Specializes in real estate investment financingQuick approval and funding process, ideal for time-sensitive projectsLoans are designed for fix-and-flip projects New Silver is best suited for small business owners in the real estate sector, particularly those focused on fix-and-flip projects. Its specialization in real estate investment financing means it understands such ventures’ unique needs and timelines. With its fast approval and funding process, New Silver can be an excellent partner for businesses looking to capitalize on market opportunities. New Silver offers a variety of loan options tailored to different stages of real estate investment, making it a versatile choice for entrepreneurs in this sector. Its expertise in the real estate market allows New Silver to provide valuable insights and support to its clients. Bluevine Get more info Best business line of credit Provides lines of credit and invoice factoring, enhancing cash flowQuick and easy online application processCompetitive rates for short-term financing needs Bluevine is an excellent option for small businesses needing flexible cash flow solutions. Its lines of credit and invoice factoring services can help businesses manage their finances more effectively, providing access to funds when needed. Bluevine’s simple online application and fast funding can be crucial for businesses facing immediate financial challenges or opportunities. Bluevine’s products are best for businesses with variable cash flow or those that need to bridge gaps between receivables and payables. Its focus on short-term financing solutions makes it a strong ally for small businesses looking for agile financial products. Kapitus Get more info Best for customization Offers a wide range of financing products, including equipment financing and term loansTailored solutions to meet specific business needsCompetitive rates and flexible terms Kapitus provides small businesses with a broad spectrum of loan products, making it a versatile choice for various financing needs. Whether it’s purchasing new equipment or funding expansion efforts, Kapitus’s tailored solutions can fit different business models and growth stages. Kapitus’s commitment to offering customized financing solutions means it can accommodate businesses with unique needs or those in niche markets. Its comprehensive suite of loan products allows businesses to find the right type of financing to support their objectives. OnDeck Get more info Best for fast funding Specializes in short-term loans and lines of creditGet a decision in minutes and funding as soon as the same dayTransparent terms and conditions OnDeck is ideal for small businesses looking for quick access to capital. Its focus on short-term loans and lines of credit provides businesses with the flexibility to manage cash flow. OnDeck’s transparent terms and speedy funding process remove much of the uncertainty in securing business financing. OnDeck’s products are best suited for businesses needing immediate financial support, whether to cover unexpected expenses or take advantage of timely opportunities. Its commitment to making funding accessible and straightforward makes it a reliable choice for small businesses. Funding Circle Get more info Best for growing businesses Focuses on term loans with competitive ratesLonger repayment periods availablePersonalized service with dedicated account managers Funding Circle’s term loans are ideal for small businesses looking to invest in long-term growth initiatives. Its competitive rates and longer repayment periods allow businesses to finance major projects without straining their cash flow. Funding Circle’s personalized service ensures businesses receive the support and guidance they need throughout the loan process. Funding Circle’s term loans are best for businesses planning significant investments in their operations or infrastructure. Its approach to lending combines the benefits of competitive financing with personalized customer service, making it a top choice for businesses focused on sustainable growth. Types of small business loans You can explore several loan options if you’re a small business owner. Here are eight of the most common. Loan typeWhat it isBest forTerm loanCommon business loan Lump sum upfront Repay in installmentsBig purchasesFunding projectsWorking capital loanAka short-term loanShorter repayment (12 – 18 mos.)Immediate needsTemp. dips in cash flowEquipment financingEquipment is collateralNew equipmentMicroloanSmall loans ($50,000 max)Easier to qualifyStartupsInvoice factoring & invoice financingTurn outstanding invoices into cashBusinesses with slow-paying customersSmall Business Admin. (SBA) loanPartially guaranteed by SBALower interest rates Longer repayment periods General [7(a) loans]Comm. real estate [504 loans]Business credit cardHigh rate if you don’t pay balance in fullAbility to pay in full each month Earning rewardsBusiness lines of creditLike credit cards (but lower rates)Payroll, rent, & utilities How to choose the right small business loan Now that you know the main types of small business loans, how do you choose the right one for your needs? Ask yourself these questions: What will I use the money for? Look for a loan that aligns with your purpose, whether it’s a working capital loan for operational expenses, equipment financing for a new tractor, or a credit card for rewards. How soon do I need the money? You can get funding for many term loans, lines of credit, and merchant cash advances in just 24 hours. SBA loans take one to three months.Invoice factoring can take several weeks. What are the interest rates and fees? With so many types of loans, interest rates and fees can be wide-ranging. It’s common to see rates of 3% to 36%—or more depending on the loan type and your credit profile. What are the repayment terms? Match the loan term to how long you need the funds. Short-term loans have daily or weekly repayment schedules because they’re often paid back within 18 months. Traditional term loans have monthly payments lasting up to 10 years.SBA loans can go up to 25 years. What collateral is required? Not all lenders require collateral. But some will ask you to sign a personal guarantee, which states you’ll be personally responsible if you can’t repay your business debts. Do I qualify? Lenders have unique criteria. Check what credit score, revenue, and time in business the ones you’re considering require. You might find more lenient terms with online lenders. Read More Small Business Loans for Bad Credit How to get a small business loan Making sure you qualify is the first step to getting a small business loan. Many lenders have these three requirements: Time in business: Most lenders require at least one year in business, but others will lend to companies that have been operational for six months or less.Credit score: You may need a minimum credit score of 650 or higher, but some lenders will accept scores as low as 500 for certain loan types. Annual revenue: It’s typical for lenders to require at least $8,000 in monthly revenue, which breaks down to $96,000 in annual revenue. Lenders will review your personal and business credit when applying. Depending on the loan type, you may need these documents: Business financial statements and tax returnsPersonal financial statements and tax returnsBusiness plan and cash flow projectionsCollateral you can pledge (if required)Articles of incorporation/organizationAccounts receivable aging reportDebt schedules Funding times will hinge on what business loan you choose. Term loans from online lenders may take just a business day to process. SBA loans require significant paperwork and can take up to three months for approval. Tip It’s often easier to qualify for a loan with an online lender than a traditional one. You’ll often get your funds faster too. But you may pay more in interest rates and fees. This trade-off could be worth it if you have imperfect credit or are in a hurry. Otherwise, check rates from banks or credit unions; you could save money. See more about small business loans: Small business loans for womenSmall business loans for startupsFast small business loansSmall business loans in FloridaSmall business loans in California Alternatives to small business loans If you don’t qualify for a small business loan, consider these alternatives: Bootstrapping. This is where you start with what you have. You could use personal savings or tap into friends and family willing to invest in your vision.Crowdfunding. You could try pitching your business idea to the public. If enough people are interested, you could raise funds through small contributions. Angel investors. Also known as venture capitalists, these individuals specialize in providing capital for startups—but often in exchange for equity ownership in your company. Grants. Government and private grants aim to support small businesses, especially those in specific industries or owned by people of color, women, or veterans. Grants have significant competition but can help you get funding you don’t need to repay.Personal loans for business use. A personal loan could be an option if your company is too new to qualify for a business loan. But it ties your personal credit to your business’s success. Some lenders prohibit the use of personal loans for business use. Small business loan FAQ What is the best financing option for a small business? The best financing option for a small business depends on the company’s needs and financial health. Term loans are popular for their straightforward repayment terms, but lines of credit offer flexibility for ongoing expenses. It’s crucial to assess any loan’s immediate and long-term financial implications. What type of loan is best for starting a business? For starting a business, microloans, business credit cards, and equipment financing are particularly useful. These options cater to early-stage needs, offering lower borrowing amounts and sometimes more lenient credit requirements, making them accessible for new entrepreneurs. What credit score do I need for a small business loan? Many traditional banks prefer a credit score of at least 680 for a small business loan for more favorable interest rates. However, alternative lenders may accept scores as low as 500. Lower scores may result in higher interest rates and more stringent repayment terms.