Best small business loans of 2020

Not all business loans are created equal. Find the best lender for your specific financing needs.

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Getting a loan for your business today is a lot different than it was 10 years ago. Access to multiple new options means finding a lender you can trust takes a bit more effort. To save you time, we’ve narrowed down top picks for small business loans by lender category and type of financing.

11 best small business loans

SmartBiz logo
Finder Rating: 4.3 / 5

★★★★★

Check eligibility
on SmartBiz's secure site

Best SBA loans: SmartBiz

650
Min. Credit Score
6.25%
Starting APR
$5,000,000
Loan Amount
SmartBiz speeds up the SBA application process by streamlining the information you need to provide. By working with multiple banks and online lenders, it may take just a few weeks to get funding — rather than the normal multi-month waiting period. Prequalification takes a few minutes, and the rates its lenders offer start low. But you'll need to borrow at least $30,000, and the process isn't free. Smartbiz will charge a referral and packaging fee if you're approved for a loan.
Pros
  • Large network of SBA lenders
  • Low potential APR
  • Fast turnaround for an SBA loan
Cons
  • Can’t borrow less than $30,000
  • Referral and packaging fees
Min. Loan Amount $30,000
Max. Loan Amount $5,000,000
APR 4.75% to 7.00%
Interest Rate Type Variable
Min. Credit Score 650
Minimum Loan Term 120 months
Maximum Loan Term 300 months

Best line of credit: BlueVine

600
Min. Credit Score
4.8%
Starting APR
$5,000,000
Loan Amount
Bluevine's low starting APR and lack of fees makes it a good choice for small businesses and startups that need frequent access to funds. Its lines of credit are revolving, so you'll be able to borrow and repay as needed. But repayments can be weekly — which can strain your budget during seasonal periods.
Pros
  • Low starting APR of 4.8%
  • Accepts fair credit
  • No maintenance or draw fees
Cons
  • Might come with weekly repayments
  • Requires a lien on your business assets
Min. Loan Amount $5,000
Max. Loan Amount $5,000,000
Interest Rate Type Fixed
Min. Credit Score 600
Minimum Loan Term 6 months
Maximum Loan Term 12 months
Lendio logo
Finder Rating: 4.75 / 5

★★★★★

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on Lendio's secure site

Best marketplace: Lendio

560
Min. Credit Score
6%
Starting APR
$5,000,000
Loan Amount
Lendio is a good option when you don't know where to start. It has a network of over 75 lenders that offer a wide array of business loans, including SBA loans. You can even qualify with bad personal credit. But it's not free — once your loan is finalized, you'll have to pay an origination fee to Lendio. And you may receive marketing calls and emails from lenders long after you've taken out a loan.
Pros
  • Network of over 75 lenders
  • Wide range of business loan options
  • Bad personal credit accepted
Cons
  • Must pay origination fee after loan is finalized
  • May receive marketing material from lenders
Min. Loan Amount $500
Max. Loan Amount $5,000,000
APR Starting at 6%
Interest Rate Type Variable
Min. Credit Score 560
Minimum Loan Term 12 months
Maximum Loan Term 300 months
Fundbox logo
Finder Rating: 4.76 / 5

★★★★★

Check eligibility
on Fundbox's secure site

Best invoice financing: Fundbox

500
Min. Credit Score
4.99%
Starting APR
$100,000
Loan Amount
Fundbox offers a mix of invoice financing and a line of credit to businesses that have a steady stream of revenue. And it considers the financial health of your business instead of your personal credit score when determining approval. Applying online takes just minutes by connecting your bank account and accounting software. You can finance up to 100% of an unpaid invoice — with a minimum monthly rate of 4.66%. But it comes with weekly repayments and steep late fees, meaning it's not ideal for seasonal businesses.
Pros
  • May receive funds in 1 business day
  • Receive 100% of invoice’s value
  • Bad credit OK
Cons
  • Must use supported bookkeeping software
  • Comes with weekly repayments
  • Steep late fees
Min. Loan Amount $1,000
Max. Loan Amount $100,000
APR 4.99
Interest Rate Type Fixed
Min. Credit Score 500
Minimum Loan Term 3 months
Maximum Loan Term 6 months
Turnaround Time As soon as 1 business day
LendingClub logo
Finder Rating: 4.5 / 5

★★★★★

Check eligibility
on LendingClub's secure site

Best peer-to-peer loan: LendingClub

580
Min. Credit Score
9.77%
Starting APR
$500,000
Loan Amount
As a peer-to-peer lender, LendingClub is able to offer faster financing than a bank without the strict requirements. Your business only needs to be around for a year and bring in $50,000 annually to qualify. And it's willing to work with business owners with fair credit. However, its high origination fee and maximum APR can make it expensive for businesses that just barely meet these requirements.
Pros
  • Less strict eligibility requirements
  • Get funds in just a few days
Cons
  • High origination fee of 3.49% to 7.99%
  • APRs capped at a high 35.98%
Min. Loan Amount $5,000
Max. Loan Amount $500,000
Fee 3.49% to 7.99%
Interest Rate Type Fixed
Min. Credit Score 580
Minimum Loan Term 12 months
Maximum Loan Term 60 months

Best term loan: Regions Bank

600
Min. Credit Score
7%
Starting APR
$1,000,000
Loan Amount
Regions Bank offers some of the most competitive APRs out there. And it's the only lender on this list that reviews your account every six months to see if you can qualify for a lower rate thanks to on-time repayments. There are no origination or prepayment fees, and you'll have access to up to $1 million in financing. But loan terms only go up to five years, which could make repayments difficult to afford on a high-dollar loan.
Pros
  • Qualify for lower rates with on-time payments
  • Fair credit OK
  • No origination fees or prepayment penalties
Cons
  • Terms only go up to five years
  • Customer service asks for your Social Security number when you call
Min. Loan Amount $15,000
Max. Loan Amount $1,000,000
Interest Rate Type Fixed
Min. Credit Score 600
Minimum Loan Term 12 months
Maximum Loan Term 60 months

Best microloan: Kiva

None
Min. Credit Score
0%
Starting APR
$15,000
Loan Amount
Kiva's interest-free microloans are ideal for entrepreneurs looking to turn an idea into reality. It doesn't have any time-in-business requirements, and you can borrow up to $15,000 without paying any fees. But its loans are crowdfunded, so if you don't have a large social network willing to make contributions, it could take up to 45 days to raise funds.

UPDATE: In light of the COVID-19 pandemic, Kiva has announced it will loosen its eligibility requirements and extend its maximum loan amount by $5,000 – to a total of $15,000. Additionally, borrowers will be granted a six-month grace period before payments are due.

Pros
  • No interest or fees
  • All credit types welcome
  • No residency requirements
Cons
  • Relies on your social network for crowdfunding
  • Can take up to 45 days to raise funds
Min. Loan Amount $25
Max. Loan Amount $15,000
APR 0%
Interest Rate Type N/A
Minimum Loan Term 1 months
Maximum Loan Term 3 months

Best startup loan: SBG Funding

500
Min. Credit Score
5%
Starting APR
$5,000,000
Loan Amount
SBG Funding has a high annual revenue requirement — but for startups that are at least six months old, it's still one of the better deals. Not only does it accept businesses in high-risk industries, but it's also willing to work with business owners with a personal credit score of just 500. However, it's not transparent about fees. And you could get stuck with weekly repayments.
Pros
  • Low starting APR of 5%
  • Open to business owners with bad credit
  • Works with businesses in high-risk industries
Cons
  • High annual revenue requirement of $150K
  • Potential weekly repayments
  • Not transparent about fees
Min. Loan Amount $5,000
Max. Loan Amount $5,000,000
APR 5% to 35%
Interest Rate Type Fixed
Min. Credit Score 500
Minimum Loan Term 6 months
Maximum Loan Term 60 months
Turnaround Time As soon as 3 business days

Best bank loan: PNC Bank

Not stated
Min. Credit Score
3.69%
Starting APR
$100,000
Loan Amount
PNC Bank has a wide variety of business loans to suit your funding needs — from secured and unsecured term loans and lines of credit to SBA loans and auto financing. You can apply online if you're a current PNC Bank business customer — rare for a traditional bank. But your business needs to be up and running for at least three years and based in an eligible state to qualify.
Pros
  • SBA Preferred Lender
  • No guarantee fee
  • Variety of other financing options
Cons
  • No specific information on costs
  • Can’t apply online
Min. Loan Amount $20,000
Max. Loan Amount $100,000
APR 3.69% to 3.99% (As low as)
Interest Rate Type Variable
Minimum Loan Term 48 months
Maximum Loan Term 60 months

Best credit union loan: Lake Michigan Credit Union

700
Min. Credit Score
5%
Starting APR
$50,000
Loan Amount
If you aren't attached to an online application and have assets to secure your loan, Lake Michigan FCU is one of the top credit unions out there for business financing. Its APR maxes out at an extremely low 7%, and funding is available to businesses across the US. However, the maximum amount your business can borrow is capped at $50,000 — you'll be able to borrow much more with other lenders.
Pros
  • Competitive APRs cap out at 7%
  • Available in all 50 states
Cons
  • Must secure the loan with collateral
  • No online application
  • Loans max out at $50,000
Max. Loan Amount $50,000
Interest Rate Type Fixed
Min. Credit Score 700
Maximum Loan Term 240 months

Best merchant cash advance: Rapid Finance

500
Min. Credit Score
N/A
Starting APR
$1,000,000
Loan Amount
Rapid Finance considers the overall health of your business when you apply for a merchant cash advance. And while it does have a small origination fee of 2.5%, its factor rate is one of the lowest out there — ranging from 1.09 to 1.3. Provided your business has a large volume of credit card sales, you could quickly cover gaps in your cash flow. However, like all merchant cash advance services, it may require daily repayments.
Pros
  • Competitive factor rate of 1.09 to 1.3
  • Get funds in just 1 business day
  • Bad credit OK
Cons
  • Short maximum loan term of 18 months
  • May require daily repayments
Min. Loan Amount $5,000
Max. Loan Amount $1,000,000
APR Fee based
Fee 9% to 30%
Interest Rate Type N/A
Min. Credit Score 500
Maximum Loan Term 18 months
Turnaround Time As fast as 1 business day

Our methodology: How we picked the best business loans

To help you choose the best fit, we’ve reviewed over 130 business loans — SBA loans, term loans, lines of credit, merchant cash advances and more — to help you compare. We paid special attention to lenders that offered loans of $100,000 or less, since more than half of small business loans are made out in that amount, according to a study by the Federal Reserve.
We then analyzed each business product by asking ourselves:

  • Which lender is the most affordable for this particular need?
  • Which has the quickest funding speed?
  • Which has the widest range of lending limits?
  • Which offers the simplest application process?

What’s new in 2020?

To better serve your business’s needs, we chose lenders based on specific loan or service they offer, rather than lender type. Because of this, many of our top picks have changed, but these still represent the best options to fund your business — whether it’s for the short or long term.

5 tips to get the best business loan

Increase your chances of approval and get the best rates and terms with these tips.

  1. Check your credit report. It’s good to know your personal credit score to figure out which lenders you qualify for. Beyond that, your credit report might contain mistakes. Get these straightened out before you apply for a loan to qualify for the rates you deserve. If your business is more established, you may have a business credit score that lenders consider as well.
  2. Over-prepare. Know your business’s finances backward and forward. Get all of your documentation together ahead of time and have it on hand. Remember, you want to appear the most qualified.
  3. Have a business plan that tells your story. Even if your lender doesn’t require it, a solid business plan means you’re on top of your business’s finances and future projections. Business plans make it easier to understand the types of financing you need, how much and what you might qualify for.
  4. Go for big lenders for big loans. Big banks are less likely to approve borrowers who need small amounts of financing. Its best to save banks and other big lenders for larger projects like real estate or buying large amounts of equipment.
  5. Take advantage of risk-free prequalification. The best way to get an idea of what rates you might qualify for is by prequalifying or calling your lender. It’s not guaranteed that you’ll get those rates, but it’s a smaller ballpark than the advertised APR and term range. And you can more accurately weed out lenders that won’t accept you in the first place.

Top types of loans for small businesses

Click on one of the following loans to find out which type of financing works best for your small business.

Find out how other business loan types work

What do lenders look for in a business?

Finding a competitive deal on a business loan doesn’t just depend on finding a lender that offers low rates and the right type of financing. No matter where you apply, your business is more likely to qualify for competitive terms if you and your business meet the following criteria.

  • Your business is at least one year old. Lenders like to see that your business has a track record of steady revenue coming in to reassure them that you can afford to pay off your loan.
  • You have strong personal credit. While business credit scores do sometimes come into play, your personal credit score typically plays a more important role in your loan application.
  • You’re personally invested. Some lenders require that owners invest a certain amount of their personal funds in the business. Even if it doesn’t, a personal investment is a vote of confidence that many lenders take into account.
  • You’re willing to put up collateral. Many small business lenders require business owners to put a lien on their personal assets up as collateral. Securing your loan takes some of the risk off of the lender and can help you qualify for more competitive rates.

Business financing alternatives

Sometimes a business loan isn’t the best way to fund your business. If you’re new, have low revenue or poor credit, you might not be able to get the most competitive rate. Instead, you might want to consider one of the following options:

  • Personal loans. A personal loan is a popular choice for entrepreneurs trying to fund a startup. They typically max out at $100,000 and often require good credit, so they’re not right for all business owners and needs.
  • Crowdfunding. You might not need to take on debt or pay anyone back at all if your business needs to fund a project that’s easy to communicate in a short video. Crowdfunding can help you raise the money from your fans or investors.
  • Equity investments. Get funding for your business that you never have to pay back in exchange for partial ownership in your company by brining on an investor.
  • Business credit cards. For small expenses or working capital, a business credit card is sometimes a lot easier to manage than a loan. Plus, many business credit cards come with 0% APR promotional periods, giving you a window to make a big purchase and pay it off without interest over a few months or a year.

Compare more business lenders

Updated April 4th, 2020
Name Product Filter Values Min. Amount Max. Amount Requirements
First Down Funding business loans
$1,000
$300,000
Varies by type of loan
Alternative financing up to $300K with highly competitive rates.
Lendio
$500
$5,000,000
Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
OnDeck
$5,000
$500,000
600+ personal credit score, 1+ years in business, $100,000+ annual revenue
A leading online business lender offering flexible financing at competitive fixed rates.
Kabbage Small Business Line of Credit
$500
$250,000
1+ years in business, $100,000+ annual revenue or $4,200+ monthly revenue over last 3 months
A simple, convenient online application could securely get the funds you need to grow your business.
SmartBiz
$30,000
$5,000,000
650+ 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
Get funding for your small business with a government-backed loan and extended repayment terms.
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Bottom line

There is no one best business loan for everyone. But there are better lenders for specific business needs.

Understanding the type of loan you need is the first step toward getting a business loan that fits. Use our site to learn more about business financing and find lenders you and your business qualify for.

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