A bank could help you support your business from seed to success, but with strict requirements.
Bank loans are the golden standard when it comes to small business financing. This is where you'll find the lowest rates and fees — and the most favorable terms. Build a borrowing relationship with a bank and you'll also get free advice and a lender who knows your business's finances inside out.
We chose these small business bank loans based on the amount businesses can borrow, minimum requirements and types of loans available. To present the widest scope to our readers, we categorized each lender based on its strength. Most banks offer similar loan products, so you can choose the best loan for your business by evaluating other factors, like business credit card and bank account options.
We also keep this list regularly updated. In May 2021, we added Chase as our best pick for equipment financing and designated U.S. Bank as our pick for a simplified application. And in March 2022, we removed SunTrust Bank as our pick for large business loans, as a merger with BB&T significantly shrunk the size of loans available with this provider.
Many banks have suspended business loan programs to focus on processing Paycheck Protection Program (PPP) loan applications. Even those that still offer bank loans will likely have a slower turnaround time. You may want to hold off on applying for a bank loan until this round of PPP funding is over. If you need a non-PPP loan now, compare lenders that are currently accepting applications.
SmartBiz is a connection service that works exclusively with banks. While previously an SBA loan broker that offered packaging services, SmartBiz has branched out to help small business owners find traditional bank loans as well. These loans aren't ideal, though — you may end up with an interest rate between 6.99% to 24.99%. But if you do want an SBA loan, this might also be a great place to start. It only partners with preferred lenders and packaging services can cut the turnaround time from months to weeks.
Pros
Compare regular bank loans and SBA loans
Cuts weeks out of SBA loan turnaround time
Simplified online application
Cons
Charges SBA referral and packaging fees
No loans under $30,000
Relatively high starting APR of 6.99% on non-SBA loans
Loan amount
$30,000 – $5,000,000
APR
6.25% to 8.50%
Min. Credit Score
660
Loan Term
10 to 25 years
Requirements
660+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years
Pros
Compare regular bank loans and SBA loans
Cuts weeks out of SBA loan turnaround time
Simplified online application
Cons
Charges SBA referral and packaging fees
No loans under $30,000
Relatively high starting APR of 6.99% on non-SBA loans
Loan amount
$30,000 – $5,000,000
APR
6.25% to 8.50%
Min. Credit Score
660
Loan Term
10 to 25 years
Requirements
660+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years
Bank of America is a one-stop-shop when it comes to business financing.It offers unsecured business loans, lines of credit and as well as auto financing — which is unusual for a bank. It also has a specialized financing program for healthcare providers. On top of this, it offers some of the lowest starting rates available at a bank, especially for unsecured loans. The flat origination fee of $150 is particularly low if you go for a larger loan amount. But it may be difficult to qualify as a smaller business, especially if you aren’t already a customer.
Pros
Low-cost unsecured loans compared to other banks
Available in all 50 states
Financing program for healthcare providers
Cons
Not a preferred SBA lender
Smaller businesses could have trouble qualifying
Loan amount
$10,000 – $100,000
APR
Starting at 5.25%
Loan Term
12 to 60 months
Requirements
At least 2 years in business with current ownership, good credit, $100,000+ in annual revenue.
Pros
Low-cost unsecured loans compared to other banks
Available in all 50 states
Financing program for healthcare providers
Cons
Not a preferred SBA lender
Smaller businesses could have trouble qualifying
Loan amount
$10,000 – $100,000
APR
Starting at 5.25%
Loan Term
12 to 60 months
Requirements
At least 2 years in business with current ownership, good credit, $100,000+ in annual revenue.
Live Oak Bank is one of the most active SBA lenders in the country. It specializes in financing large projects, like expansion and business acquisition. Its loan specialists are highly experienced in working with a wide range of industries and can help tailor your loan to your business's specific financing needs. And it even offers lower rates than some SBA loan providers. But it's not ideal if you need funding for working capital — or are looking for a quick turnaround. It can take months for Live Oak Bank
Pros
SBA-preferred lender
One of the most active 7(a) lenders in US
Access to SBA loan specialist
Cons
Not ideal for small projects
Does not offer working capital
No full online application
Loan amount
Varies by industry
APR
Varies by loan type
Loan Term
Up to 300 months
Requirements
Strong financial history, meet standard SBA loan requirements
Pros
SBA-preferred lender
One of the most active 7(a) lenders in US
Access to SBA loan specialist
Cons
Not ideal for small projects
Does not offer working capital
No full online application
Loan amount
Varies by industry
APR
Varies by loan type
Loan Term
Up to 300 months
Requirements
Strong financial history, meet standard SBA loan requirements
Chase Bank offers a range of small business loans. But its equipment financing stands out. You can get up to 110% financing for equipment to help fund soft costs associated with making your purchase. Chase also allows you to keep the title in your business’s name from the beginning, treating the equipment like any other business asset your firm already owns. But like many banks, it doesn’t display rates or fees online. You’ll have to set up an appointment to get an idea of the costs. And it’s only available to businesses in 23 states.
Pros
Finance up to 110% of equipment's value
Keep title in business's name
Payment based on your business's cash flow
Cons
Doesn't display rates online
Only available in 23 states
Loan amount
$5,000 – $500,000
APR
Not stated
Loan Term
12 to 84 months
Requirements
Hold a Chase business checking account, have a realistic business plan and visit a Chase location in person.
Pros
Finance up to 110% of equipment's value
Keep title in business's name
Payment based on your business's cash flow
Cons
Doesn't display rates online
Only available in 23 states
Loan amount
$5,000 – $500,000
APR
Not stated
Loan Term
12 to 84 months
Requirements
Hold a Chase business checking account, have a realistic business plan and visit a Chase location in person.
U.S. Bank’s Quick Loan is a great option for current customers who don’t have a lot of time to spend on an application. U.S. Bank will prefill part of the form with information it has on record. You can borrow between $5,000 and $250,000 through this process — and even get access to a streamlined SBA loan application. Interest rates are fixed, but U.S. bank doesn’t display a starting rate. You’ll have to fill out an online preapplication form to get an estimate of the cost — which only takes about 10 minutes.
Pros
Prefills application for current customers
SBA loans available
Loans as low as $5,000
Cons
More complicated application for loans over $250,000
Doesn't disclose rates or fees online
Not an unsecured loan
Loan amount
$5,000 – $250,000
APR
Starting at 5.99%
Loan Term
Up to 84 months
Requirements
At least two years in business and good to excellent personal credit score
Pros
Prefills application for current customers
SBA loans available
Loans as low as $5,000
Cons
More complicated application for loans over $250,000
Doesn't disclose rates or fees online
Not an unsecured loan
Loan amount
$5,000 – $250,000
APR
Starting at 5.99%
Loan Term
Up to 84 months
Requirements
At least two years in business and good to excellent personal credit score
American Express is ideal if you already have a business card and are looking for a small loan amount. While most banks require you to borrow at least $10,000, Amex has a low minimum of just $3,500. And American Express is the only bank on our list that offers loans specifically for working capital and credit card debt consolidation, as well as merchant cash advances.
Pros
No prepayment penalty
Simple application
Hard credit check after approval
Cons
Amex business cardholders only
Terms only up to 36
Amounts top out at $75,000
Loan amount
$3,500 – $75,000
APR
6.98% to 19.97%
Loan Term
6 to 36 months
Requirements
Must be an American Express Basic Cardmember or an American Express Business Cardmember in good standing.
Pros
No prepayment penalty
Simple application
Hard credit check after approval
Cons
Amex business cardholders only
Terms only up to 36
Amounts top out at $75,000
Loan amount
$3,500 – $75,000
APR
6.98% to 19.97%
Loan Term
6 to 36 months
Requirements
Must be an American Express Basic Cardmember or an American Express Business Cardmember in good standing.
This regional bank's loan officers offer the quality service you might find with a local bank — but you can manage your account and even apply online if you're already a customer. It doesn't require collateral on loans under $100,000 and offers commercial vehicle financing. It's also an SBA Preferred Lender, meaning that it has the authority to process applications for you. The main drawback is that its customer service team gets poor customer reviews.
Pros
No collateral required under $100,000
SBA Preferred Lender
Online application for current customers
Cons
Poor customer service reviews
No online application for new customers
Loans start at $100,000
Loan amount
$20,000 – $100,000
APR
Not stated
Loan Term
Up to 84 months
Requirements
Business is 3+ years old, meet revenue standards, no bankruptcy claims, no outstanding financial obligations
Pros
No collateral required under $100,000
SBA Preferred Lender
Online application for current customers
Cons
Poor customer service reviews
No online application for new customers
Loans start at $100,000
Loan amount
$20,000 – $100,000
APR
Not stated
Loan Term
Up to 84 months
Requirements
Business is 3+ years old, meet revenue standards, no bankruptcy claims, no outstanding financial obligations
Borrowing from a bank is different from going to an online lender. It’s usually about more than just getting one loan, but developing a relationship. Instead of looking at rates and terms — which can be difficult to find — consider these factors:
Your business’s banking history. Banks prefer to work with current customers, and the longer you’re with the bank the better deal you’ll get on financing. If you already have a business checking account start your search with that bank.
Other available products. Look at all of the other services that the bank offers and try to go for one that you — and other business owners — would be comfortable with as a go-to for financial products.
Industry specialists. Often banks have loan officers that are experts in a specific industry. They can provide valuable insights into your business’s operations and anticipate your financing needs.
Types of loans. If you’re looking for a specific type of financing — like an SBA Export Express loan — make sure a bank offers it before reaching out.
Customer reviews. Look to sites like Trustpilot and the Better Business Bureau see what customers have to say about loan officers and customer service. But take it with a grain of salt – customers generally write reviews in extreme situations.
Employee reviews. A bank with low employee ratings could be a warning sign, especially with local banks. Low morale can be a sign that you might not get top-notch service and have to switch loan officers frequently.
Types of banks that offer business loans
The type of bank you go with makes a difference in the experience you have with a lender. These are the main types of banks you’ll find in your search.
Large national and international banks
Big names like Wells Fargo and Chase fall under the category of large national banks. The benefit of working with these banks is that they’re available in most states and have the budget to invest in new technology that smaller banks might not access.
These might benefit businesses that operate in multiple states. But large banks approve the lowest number of applications and have a lower level of customer satisfaction than smaller counterparts, according to the Federal Reserve's 2021 Small Business Credit Survey (SBCS).
Regional banks
Regional banks typically offer services that are a little more tailored to the industries in the states that they serve. They also typically have multiple branches and offer a wide range of online services and tools. These are generally a good option for businesses owners that want a personal touch but also would like to manage their accounts virtually.
Community banks
Community banks specialize in financing the local businesses in their areas. Loan officers are often experts in the local market as well as popular industries in their area. They often have a high level of customer satisfaction and approve a larger portion of applications, according to the SBCS.
These are your best bet when you want to develop a close, mutually beneficial relationship with a financial institution in your area.
But they often only have a handful of branches. They were also traditionally slow adapt to new technology — though have started partnering with tech companies to bring applications online.
Community Development Financial Institutions, or CDFIs, are typically community banks with a mission to develop the economy of the area it serves. These often have special financing programs for underrepresented business owners — such as women, minorities and veterans. And they often offer services like training for entrepreneurs and financial management courses.
CDFIs also typically offer financing to business owners with poor credit and startups, often at a more competitive rate than you’d find online.
What types of business loans do banks offer?
The exact loan options will depend on the bank, but many offer a combination of these:
Term loans. Most banks offer simple term loans to improve cash flow or cover a large expense. Terms are typically three to five years, and interest rates may be fixed or variable.
SBA loans. Banks may work with the Small Business Administration (SBA) to offer loans backed by the federal government. This allows them to keep interest rates low and accept businesses that might otherwise not qualify for funding.
Lines of credit. Business lines of credit allow you tap into cash as needed for ongoing expenses or as an emergency fund. Your business only repays what it borrows — and some banks may allow your business to increase its credit limit over time.
Equipment financing. Banks commonly offer loans to buy equipment with amounts and terms based on your purchase. Usually you can get up to 110% to 120% of equipment's value with a term based on how long it's expected to be useful to your business.
Real estate financing. Banks may offer commercial real estate financing as term loans or lines of credit, and you’ll find options with either fixed or adjustable rates.
To improve your chances of being approved for a small business loan, focus on banks that accept smaller businesses. Having a business banking account, exceeding minimum revenue requirements and proving your business can repay what it borrows will help you get approved.
Here are a few points banks look for when you apply:
Error-free application. One of the main reasons lenders reject applicants is because they find errors or inconsistencies in the application.
Excellent credit. It’s standard for banks to require some kind of personal guarantee from each business owner, so it may consider your personal credit score as well as your business’s credit score — especially if you haven’t been open long.
Time in business. Banks typically want to see at least two years in business. The longer your business has been around, the more likely you are to qualify.
Existing relationship. Having a business checking account with a bank will help prove your revenue. And if you already work with a specific banker who knows your business, you may have an added edge when it comes to getting your application approved.
Strong business plan. A strong business plan demonstrates that you have a plan for your funds and know how your business will be able to pay back the money you borrow.
What should I do if I was denied for a business loan?
Like any loan application, the first step is to reassess. Look into why you were denied by the lender and start making any changes that could improve your chances of being approved later. Reworking your business plan and paying down other debt are simple ways to get started. You may also want to open an account with the bank and establish a relationship with it before applying again.
But there are some things that take time. If your business only just meets a bank’s minimum time-in-business or annual revenue criteria, you may not be approved. Consider other types of business loans or an online lender for funding while you work on polishing your business to meet the requirements set by a bank.
5 alternatives to small businesses loans from banks
Banks are easy, safe and familiar. But if your business doesn’t quite meet a bank’s requirements, you might want to consider these alternatives:
Online lenders. Online lenders don’t have the overhead costs of traditional banks — meaning they can sometimes extend better deals — and they may be willing to work with newer businesses that have a lower annual revenue.
Peer-to-peer lenders. Investors work through peer-to-peer lenders to offer businesses financing — then earn money back through interest. One or more investors can fund your loan, allowing you to get funding from a variety of sources with one application and have just one spot for repayments.
Personal loans. Businesses that haven’t opened their doors and startups can benefit from personal loans. You may be eligible for up to $100,000 based on your personal credit and finances, not the profitability of your business.
Business credit cards. If your business needs frequent funding for small expenses or you want the flexibility to make purchases as needed, a business credit card may be a good option. Just be aware of the typically high interest rates that accompany a credit card’s convenience.
Grants. Depending on your business, you may be eligible for grants from your local or state government and some nonprofit organizations. However, funding is typically limited, and you’ll need to spend quite a bit of time getting an application ready.
Banks are still one of the primary sources of funding for many businesses. But they aren’t the only place that offer small business loans. Before you spend time applying, compare all your business loan options to make the most out of your time.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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