Editor's choice: First Down Funding business loans
- No prepayment penalties
- Competitive rates
- Works with bad credit and most industries
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Compare $10,000 business loans
Stay away from big banks for a loan of this size.
Getting a $10,000 business loan can be easier than larger amounts, since you pose less of a risk to the lender. But you might want to steer clear of big banks and look to less-conventional lenders for funding of this size.
Where can I get a $10,000 business loan?
You can get a $10,000 business loan with most types of lenders. However, big banks might not be the best option — these typically fund larger amounts and might not even offer loans of this size. Even some online lenders have funding minimums above $10,000.
Online lenders, microlenders and community development financial institutions (CDFIs) are likely a better bet. Borrowing online might be a particularly good choice if you don’t have a lot of time or resources to spend on your business loan application.
Compare $10,000 business loans
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How can I qualify for a $10,000 business loan?
While eligibility requirements vary by lender, you generally need to meet the following criteria:
- In business at least six months
- Minimum personal credit score of 600
- At least $100,000 annual revenue
How much will a $10,000 business loan cost?
How much your $10,000 business loan costs depends on a few factors: the loan term, interest rate and fees.
Typically, $10,000 business loans come with APRs on the lower end since they’re less of a risk to the lender. However, the specific rate you receive will depend on your business’s finances and your personal credit score. You can expect to qualify for loan terms on the shorter end — typically from six months to several years.
Let’s take a look at an example …
Cornflower Media Co. needed to cover overhead costs for a film shoot coming up in the next month, but it didn’t have the cash to afford the cost up front. The owner compared her options and narrowed it down to two lenders: OnDeck and LendingClub.
She prequalified with both and compared the results:
OnDeck | 15% | 1 year | Next business day | $902.58 | $831 |
LendingClub | 12% | 1 year | A few business days | $888.49 | $661.85 |
After weighing both options, she decided that OnDeck was a better choice. While it cost more, it had a faster turnaround time to get her the funds. And the longer she waited, the more expensive the overhead costs would get.
5 types of $10,000 business loans
From traditional term loans to lines of credit and merchant cash advances, here are five types of financing available in amounts as low as $10,000.
1. Business term loan
This straight-forward business loan is made to cover one-time expenses. It works by giving your business a lump sum to spend on any legitimate expense, which you repay in installments over a period of time. For $10,000, you can expect the term to be on the shorter side — around six months to two years.
Consider using a business term loan if …
- You have a one-time expense
- Your personal credit and revenue are strong
- You know exactly how much you need to borrow
Consider other options if …
- You want to fund an ongoing expense
- You have poor credit or low revenue
- You’re not sure how much you need to borrow
2. Business line of credit
A line of credit gives your business access to cash as it needs it — up to a credit limit. It’s made to help with ongoing projects like renovations, which can have unpredictable costs.
Depending on the lender, you might pay it off with a minimum monthly repayment, like a credit card. Or you might pay off each draw in installments, like a term loan.
Consider using a business line of credit if …
- You experience regular cashflow gaps
- You have unpredictable or ongoing expenses
- Your credit card’s limit is under $10,000
Consider other options if …
- You want to fund a one-time expense
- You know how much you need to borrow
- You don’t need regular access to cash
3. SBA microloan
The Small Business Administration (SBA) works with independent lenders to offer government-backed financing for small businesses. Most SBA programs offer funding well over $100,000 with the exception of the Microloan Program, which has an average term loan of $13,000.
Microloans are less common than other types of SBA loans — you might have better luck looking to CDFIs and community banks. They’re generally less expensive than other options, but can take a long time to process the application.
Consider using an SBA microloan if …
- You want a better deal on a term loan
- You’ve struggled getting funding before
- You have time to spend on the application
Consider other options if …
- You need money right away
- You can qualify for a good deal on your own
- You haven’t applied for a business loan before
4. Equipment and vehicle financing
These term loans are backed by the equipment or vehicle you’re using the funds to purchase, giving you lower rates. How much you can borrow depends on the price of the equipment or vehicle — some lenders will fund up to 100% of the cost, though many recommend at least a 20% down payment.
Consider using equipment or vehicle financing if …
- You want to buy equipment or a vehicle for your business
- You’re looking for a more competitive deal
- You have the funds for a down payment
Consider other options if …
- You want to fund a project or need working capital
- You don’t have money for a down payment
- You don’t want to put up collateral
5. Merchant cash advance
A merchant cash advance is an advance on your business’s future credit card sales. How much you can borrow depends on your business’s monthly revenue, and you pay it back with a percentage of your daily or weekly sales. This option is designed for retailers — particularly those that aren’t able to qualify for more traditional business loans. It’s faster than a lot of options, but can be expensive.
Consider using a merchant cash advance if …
- Your business relies on credit card sales
- You’ve struggled to get funding in the past
- You need funding right away
Consider other options if …
- You don’t have trouble qualifying for a loan
- Your revenue doesn’t come from credit card sales
- Your funding needs aren’t urgent
Bottom line
When it comes to business loans, $10,000 is on the low end. While it might be easier to qualify for than larger amounts, not all lenders offer financing this low. You might have the best luck with local banks, CDFIs and online lenders.
Read our guide to business loans to learn more about your options.
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