Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.

Best small business loans of 2020

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

Updated . What changed?

Fact checked
Couple in front of a huge garden

The coronavirus pandemic has had an unprecedented impact on small businesses in America. If you were forced to shutter your doors temporarily and are struggling to qualify for financing, read our guide to COVID-19 small business loans and grants to explore your options.

Our team of experts reviewed over 130 business lenders — including options for SBA loans, term loans, lines of credit, merchant cash advances and more — to help you find the best one for your unique needs.

We paid special attention to lenders that offer 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 lender and chose those that offered:

  • Affordable rates and fees
  • Fast funding speed
  • Wide range of lending limits
  • Simple application process

What loans are available to businesses affected by the coronavirus outbreak?

If you’ve been forced to close due to COVID-19, you’ll want to check out our guides to financing options offered by the SBA and private lenders specifically for businesses impacted by the coronavirus:

11 best small business loans

SmartBiz business loans logo
Finder Rating: 4.3 / 5

★★★★★

Check eligibility

on SmartBiz business loans’s secure site

Best SBA loans: SmartBiz business loans

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.

  • Compare regular bank loans and SBA loans
  • Cuts weeks out of SBA loan turnaround time
  • Simplified online application
  • Charges SBA referral and packaging fees
  • No loans under $30,000
  • Relatively high starting APR of 7.99% on non-SBA loans
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
Lendio business loans logo
Finder Rating: 4.75 / 5

★★★★★

Check eligibility

on Lendio business loans’s secure site

Best marketplace: Lendio business loans

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 300 lenders that offer a wide array of business loans, including SBA loans. You can even qualify with bad personal credit. But you may receive marketing calls and emails from lenders long after you’ve taken out a loan.

  • Network of over 300 lenders
  • Wide range of business loan options
  • Bad personal credit accepted
  • 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 business loans logo
Finder Rating: 4.76 / 5

★★★★★

Check eligibility

on Fundbox business loans’s secure site

Best invoice financing: Fundbox business loans

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.

  • May receive funds in 1 business day
  • Receive 100% of invoice’s value
  • Bad credit OK
  • 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 business loans logo
Finder Rating: 4.5 / 5

★★★★★

Check eligibility

on LendingClub business loans’s secure site

Best peer-to-peer loan: LendingClub business loans

580
Min. Credit Score
12.15%
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.

  • Less strict eligibility requirements
  • Get funds in just a few days
  • Accepts fair credit
  • High origination fee of 5.99%
  • APRs capped at a high 29.97%
  • Requires collateral on loans over $100,000
Min. Loan Amount $5,000
Max. Loan Amount $500,000
Interest Rate Type Fixed
Min. Credit Score 580
Minimum Loan Term 6 months
Maximum Loan Term 60 months
Rapid Finance small business loans logo
Finder Rating: 3.74 / 5

★★★★★

Check eligibility

on Rapid Finance small business loans’s secure site

Best merchant cash advance: Rapid Finance small business loans

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.

  • Competitive factor rate of 1.09 to 1.3
  • Get funds in just 1 business day
  • Bad credit OK
  • 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 Fixed
Min. Credit Score 500
Maximum Loan Term 18 months
Turnaround Time As fast as 1 business day

Best line of credit: BlueVine business loans

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.

  • Starting APR compares to banks
  • Flexible credit and revenue requirements
  • Same-day funding available
  • Short terms of six or 12 months
  • Not all industries qualify
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

Best term loan: Regions Bank business loans

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.

  • Qualify for lower rates with on-time payments
  • Fair credit OK
  • No origination fees or prepayment penalties
  • 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 business loans

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.

  • No interest or fees
  • No credit or residency requirements
  • Loans as low as $25
  • Turnaround of up to 45 days
  • No loans over $15,000
  • Qualifying depends on social network
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 small business term loans

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.

  • Low starting APR of 5%
  • Open to business owners with bad credit
  • Works with businesses in high-risk industries
  • 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 business loans

Not stated
Min. Credit Score
8.18%
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.

  • No collateral required under $100,000
  • SBA preferred lender
  • Online application for current customers
  • Poor customer service reviews
  • No online application for new customers
  • Loans start at $20,000
Min. Loan Amount $20,000
Max. Loan Amount $100,000
APR 8.18% to 15.57%
Interest Rate Type Variable
Minimum Loan Term 24 months
Maximum Loan Term 60 months

Best credit union loan: Lake Michigan Credit Union business loans

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.

  • Competitive APRs cap out at 7%
  • Available in all 50 states
  • 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

Summary of best small business loans

SmartBiz

4.75%

SBA loans

A service that helps you find the best SBA lender for your business and streamlines the application process.

Lendio

6%

Comparing multiple offers

A network of over 75 lenders that lets you quickly compare a wide range of offers.

Fundbox

4.99%

Invoice financing

A combined line of credit and invoice financing that gives easy access to funding as needed.

LendingClub

12.15%

Peer-funded business loans

Low revenue and credit requirements, and a fast turnaround time, set it apart from banks and other peer-to-peer sites.

Rapid Finance

N/A

Merchant cash advances

Low factor rates on a typically high-cost product — on top of a willingness to work with bad credit.

BlueVine

4.8%

Business lines of credit

A low starting APR, simplified application process and startup-friendly requirements.

Regions Bank

7%

Term loans

Some of the lowest starting APRs out there, plus a chance to qualify for a lower rate twice a year.

Kiva

0%

Microloans

A 0% interest rate and no fees with no time in business requirements.

SBG Funding

5%

Startup financing

A six-month time in business requirement, and a willingness to work with bad credit and high-risk industries.

PNC Bank

8.18%

Bank loans

An online application for current customers and a wide range of financing options.

Lake Michigan Credit Union

5%

Credit union loans

A low maximum APR compared to similar lenders and availability across the US.

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

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.

How long does it take to get a business loan?

The short answer: It depends on the type of loan you want and the lender you ultimately decide on.

Online lenders can get you funding in as quick as one day. Bank loans typically take at least a couple of weeks. SBA loans can take a few months or more.

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.

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.

Compare more business lenders

Data indicated here is updated regularly

Name Product Filter Values Loan amount APR Requirements
First Down Funding business loans
$5,000 – $300,000
Fee Based
At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 400
Alternative financing up to $300K with highly competitive rates.
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
ROK Financial business loans
$10,000 – $5,000,000
Varies
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
OnDeck small business loans
$5,000 – $250,000
As low as 9.99%
600+ personal credit score, 1 year in business, $100,000+ annual revenue
A leading online business lender offering flexible financing at competitive fixed rates.
Rapid Finance small business loans
$5,000 – $1,000,000
Fee based
Steady flow of credit card sales, bad credit OK
loading

Compare up to 4 providers

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site