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Explore the best small business loans and find the right fit for your business’s needs.
At some point in the lifecycle of your business, you’ll need access to financing—whether to cover cash flow, expand your team, cover an emergency, purchase equipment, or for a different purpose altogether. Small business loans can offer you the capital you need to run and grow your business.
Use this guide to learn more about the business loans and best lenders offering them.
Where to Get a Small Business Loan
Traditionally, you could only get business loans from established banks. These loans offer the best rates and terms but also require lengthy processes and the highest qualifications—making it difficult for many small business applicants to get the funding they need. Today, however, between banks, government-guaranteed loans, and alternative, online lenders, there are now more options than ever for small businesses to get access to capital.
Learn More About Loan Types
Best Small Business Loans and Lenders in 2022
Compare the top loan options and lenders to see what’s right for you.
SBA Loans
SBA loans are government-guaranteed term loans that allow lenders to offer low-interest rates to business owners who might not qualify for a bank loan.
| Amount | Terms | Rates | Speed |
|---|---|---|---|
| $5K - $5M | Up to 25 Years | Starting at 8.5% | As fast as 2 weeks |
Pros- Lowest down payments
- Longest payment terms
- Reasonable interest rates
Cons- Lengthy paperwork
- Longer approval time
- May require collateral
Business Term Loans
Online term loans are lump sum loans designed to accommodate a wide variety of businesses and their funding needs. The repayment period and rates of an online term loan will depend on the lender—however, short-term loans can have a repayment period of a few months up to a year, and long-term loans from a year to five years.
| Amount | Terms | Rates | Speed |
|---|---|---|---|
| $5,000 to $600,000 | 3 months to 3 years | 7% to 30% | As fast as three hours |
Pros- Set payment structure
- Quick to fund
- Bad credit can be acceptable
Cons- Potential prepayment penalties
- Often require a personal guarantee
Best Online Term Loan Lenders
OnDeck Capital
Best for: Access to shorter-term financing with a pre-payment discount.
Funding Circle
Best for: Affordable, medium-term loans that are quick to fund.
Credibly
Best for: Access to short-term working capital or business expansion loans.
Business Lines of Credit
Business lines of credit are one of the most flexible forms of financing—giving you the ability to draw from a set pool of funds when you need capital. Unlike a traditional term loan, you’ll only need to repay the capital you withdraw, plus interest.
| Amount | Terms | Rates | Speed |
|---|---|---|---|
| $5,000 to $250,000 | Up to 18 months | 7% to 25% | As fast as one day |
Pros- Only pay interest on funds drawn
- Capital is available when needed
Cons- Lenders may place a UCC-lien
- Harder to qualify for
Best Line of Credit Lenders
Invoice Financing
Invoice financing is a form of asset-based financing in which your unpaid invoices serve as collateral on the capital you borrow from a lender. Generally, invoice financing lenders can advance capital worth up to 85% of the value of your invoices with the 15% (minus fees) paid when your invoices are fulfilled.
| Amount | Terms | Rates | Speed |
|---|---|---|---|
| Up to 100% of invoice value | Until the customer pays the invoice | Approx. 3% processing fee, plus factor fee (~1%) each week until invoice is paid | As fast as one day |
Pros- No need to wait for invoice payment
- Invoices serve as collateral
- Easier to qualify for
Cons- Can have higher fees than traditional financing
- Fees based on time for invoice to be paid off
Best Invoice Financing Companies
AltLINE
Best for: Fast access to invoice factoring for businesses who need at least $15,000 per month in factoring.
Equipment Financing
Equipment financing is a type of small business loan given for the specific purpose of purchasing new or used equipment. You can get an equipment loan equal to up to 100% of the value of the equipment you’re looking to purchase, which you’ll then pay back over time, with interest.
| Amount | Terms | Rates | Speed |
|---|---|---|---|
| Up to the amount of equipment | 5 to 6 years | 4% to 40% | As fast as 2 days |
Pros- Quick access to cash
- Limited paperwork
- Equipment serves as collateral
Cons- Equipment could be obsolete by the time the loan is fully repaid
Best Equipment Lenders
Summary of the Best Business Loans and Lenders
| Lender | Best for | Est. Interest Rates | Min. Credit Score |
|---|---|---|---|
Cadence Bank |
SBA loans |
Variable based on the Prime Rate |
650 |
BayFirst |
SBA loans |
Variable based on the Prime Rate |
650 |
OnDeck |
Online term loans |
29.9% to 97.3% (based on loans originated in the half-year ending March 31, 2022) |
625 |
Funding Circle |
Online term loans |
12.18% to 36% APR |
660 |
Credibly |
Online term loans |
Factor rate of 1.15 to 1.45 |
500 |
Bluevine |
Lines of credit |
4.8% to 51% |
625 |
Headway Capital |
Lines of credit |
40% to 80% APR |
560 |
AltLINE |
Invoice financing |
0.5% to 5% |
500 |
Balboa Capital |
Equipment financing |
4% to 25% |
600 |
How Do You Qualify for a Business Loan?
Ultimately, the requirements to qualify for a business loan will largely depend on the individual lender you’re working with and the specific loan product you’re applying for. Overall, however, lenders will likely first look at three metrics to determine whether or not you qualify—your personal credit score, your annual revenue, and your time in business.
Generally, the better your personal credit, the stronger your annual revenue, and the longer your time in business, the more likely you are to qualify for a small business loan—and one with the most desirable rates and terms. This being said, even if your qualifications aren’t ideal, there may still be options for you to consider. You can learn more about bad credit business loans here.
How Much Is a Small Business Loan?
A small business loan from an online lender can be as much as $500,000 with interest rates as low as around 7%. However, small business loan amounts can go as low as $2,500, and interest rates can skyrocket to around 80%. SBA and bank loans typically offer the largest amounts. SBA loans, for example, can reach as high as $5 million in the loan amount.
The amount of financing you qualify for and the amount it costs really depends on what type of business loan you’re applying to, and how qualified your business is.
Can You Get a Business Loan With Bad Credit?
There may still be financing options available to you even if you don’t have the best credit.
If you work with Fundera, we can perform a soft credit pull (that won’t affect your score) to determine what your credit score is and if there are lenders in our marketplace that you can work with. We can also offer tips and advice to help you improve your credit score to qualify for better loan products in the future.
Who Is Fundera?
Getting the right business loan for you can be challenging—there are many different loan types available, and many lenders offering them. If you work directly with just one lender, how can you be sure you’re getting the best type of loan, interest rates, and terms for your unique financing needs?
That’s where a marketplace like Fundera comes in.
Fundera connects small business owners to the best loan option for them through our online marketplace of vetted business lenders. With one simple application, you can see all the products and lenders you qualify for, and start evaluating which small business loan is best for your business. Fundera features leaders in every financial category, so you can rest assured that you’re accessing the best products on the market.
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Small Business Loan Guides & Resources
Dive deeper into your small business loan options with our comprehensive guides on all things small business financing.