Small business expansion loans offer funds to grow your business — rather than just stay afloat. The best type of expansion loan for your business depends on factors like your goals, the stage of your business and the amount of capital you need.
Our team reviewed over 220 business loan providers before choosing these best options. We favored providers with high loan amounts and long terms. But we also included financing options for small business owners with less-than-perfect credit scores and less than three years in business.
7 business loans for expansion
Here's a quick look at our picks for the best business loan providers for growing your business.
Lendio is a business loan marketplace that can connect your small business with over 75 lenders. Its partners offer financing for almost every type of business expansion — including buying new equipment, buying real estate for a new location or acquiring another company. Its simple online form allows you to compare offers from multiple lenders to help you quickly find the best option for your small business.
Multiple types of expansion loans available
Partners with SBA 7(a), 504 and Express lenders
Wide range of loan amounts and terms
Not a direct lender
Potentially high rates from some partners
Warning from the FTC in 2020
$500 – $5,000,000
Starting at 6%
Min. Credit Score
1 to 25 years
Operate business in US or Canada, have a business bank account, 560+ personal credit score
SmartBiz is a connection service that specializes in helping small businesses find financing backed by the small business administration (SBA). After filling out a quick online form, its team can walk you through your offers to help you choose the best option. It also offers packaging services, which can cut the application process from months to a few weeks. But it's not free — you'll pay a broker fee and a packaging fee if you sign up for that service.
Helps you find the right SBA lender
Also offers traditional bank loans
Packaging services available
Not a direct SBA lender
Packaging and broker fees
Can take up to 30 days to fund
$30,000 – $5,000,000
4.75% to 7%
Min. Credit Score
10 to 25 years
640+ 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
National Funding is an online lender that offers financing for new and used equipment. It offers relatively low rates — which include origination fees of 1% to 3%. There's also no minimum down payment on National Funding's equipment loans. And high-risk industries can find financing with this provider, or one of its partners. However, its partners might offer different rates and terms.
Low interest rates and origination fees
No down payment required
Options for bad credit and high-risk industries
May receive different rates from partners
Isn't transparent about costs online
$5,000 – $500,000
4% to 8%
Min. Credit Score
Up to 12 months
Be in business at least one year and make at least $150,000 in annual sales. Other loan types have additional requirements.
BlueVine offers online lines of credit with no origination, draw or monthly maintenance fees. You can get your funds within hours of making a request — for a $15 fee. And your small business only needs to be around for six months with a monthly revenue of $10,000 to qualify. But each withdrawal turns into a short-term loan with weekly payments, which can be inflexible for some businesses. Sole proprietors are also subject to a hard credit check after approval, unlike other businesses.
No draw or maintenance fees
Withdrawaled funds available within hours
Low annual revenue and personal credit requirements
$15 fee for same-day funding
Hard credit check for sole proprietors
$5,000 – $250,000
Starting at 4.8%
Min. Credit Score
6 to 12 months
6+ months in business, $10,000+ in monthly revenue, 600+ credit score
FundThrough offers both invoice financing and factoring with minimal paperwork and funds that are available within 24 hours. It offers advances as high as 100% of your unpaid invoice's value, less a fee of 2.5% per month on factoring or 0.5% per week on financing. The fees are on the high end of average for invoice factoring — but the high advance rate is particularly helpful for businesses that want to take on larger projects but don't have the funding up front.
Wide range of advances from $500 to $10,000,000
Up to 100% financing upfront, less fees
Turnaround as fast as 24 hours
Lower fees available with other factoring companies
Only offers invoice financing up to $15,000
Fast turnaround requires specific software
$500 – $10,000,000
1 to 3 months
Regularly receives invoices due within 30 to 90 days.
SunTrust Bank — now known as Truist — offers a variety of business loan options to help you reach your growth goals. This includes term loans, SBA loans, real estate and equipment financing and a specialized program for expanding your business overseas. Rates range from to — low, even for a bank. But there's no online application and banks tend to have a longer turnaround than an online lender.
International expansion specialists on staff
Wide range of financing options
Loans as high as $50,000,000
Must apply over the phone or in person
Can take weeks to fund
$10,000 – $50,000,000
Up to 20 years
2+ years in business, satisfactory personal credit history
ApplePie Capital is one of the only business loan providers that specializes in franchise financing, with options for startups and established businesses. It can fund your franchise directly or connect you with a partner lender — for a $2,500 broker fee. And unlike many online lenders, it also has a team of experts who can guide your franchise through your growth plan. But save this for big expansion projects. Loans start at a high $100,000 and can take as long as a month to fund.
Exclusively works with franchises
Specialists can walk you through growth plan
Low maximum APR of 9%
Can take up to a month to fund
No loans under $100,000
Potential broker fee of $2,500
$100,000 – $10,000,000
6.5% to 9%
Min. Credit Score
60 to 120 months
Operate an eligible franchise, 660+ credit score, personal assets to fully secure the loan, additional based on financing type
A small business expansion loan is any type of loan that can help you reach your growth goals — rather than working capital. There are several types of expansion financing, and each fits different goals and stages of growth.
Term loans offer a fixed amount of financing for a one-time expense — like launching an advertising campaign to tap into a new market.
You repay the loan plus interest and fees in monthly installments, usually over two to 10 years.
Some lenders offer short terms as little as three months. These usually have weekly or daily repayments.
Term loans can be secured with business assets, or unsecured which only requires a personal guarantee.
Lines of credit
A line of credit offers continuous access to cash for a growth project that's ongoing or difficult to predict — like a construction project. It's also a good resource to cover unexpected costs that arise during your growth plan.
Businesses get access to a credit limit, which you can withdraw from as needed.
Most lines of credit are revolving. This means the credit limit replenishes as you pay down your balance.
You can find secured and unsecured lines of credit.
An SBA loan is a term loan or line of credit backed by the government. These are typically designed for businesses exiting the startup phase and entering the growth phase, which typically can't qualify at a bank.
You can borrow up to $5 million with terms as long as 10 to 25 years, depending on the program and project.
The government sets limits to the interest rates and fees that lenders can charge.
Applications are more intensive than your typical bank loan and can take months to process.
Equipment loans and leases are term loans specifically for purchasing new machinery, equipment and other tools you need to ramp up operations.
You can usually borrow around 80% of the equipment's value.
Business owners cover the rest with a down payment of around 20%
The lender uses your equipment as collateral and gives you a repayment term based on the useful life of the equipment.
Invoice financing and factoring
Invoice financing and factoring offers an advance on your business's unpaid invoices from other businesses or government contracts. This can help your business take on more projects than it can fund up front.
Invoice financing allows you to keep control of your invoices and is usually available for invoice volumes under $30,000.
Invoice factoring involves selling your invoices at a discount to a third party.
Factoring companies consider your client's credit rather than yours and this option is available to startups.
Factoring and financing are often more expensive than traditional loans and lines of credit.
3 alternatives to expansion loans
Sometimes a small business loan isn't the right type of financing to grow your business. Consider these alternatives before you apply.
Personal loans can be a good option for startups that don't have the financial track record to qualify for a business loan. Lenders base personal loan amounts and fees on your personal credit history and finances, rather than your business plan and sales projections. But it can be risky — you're personally responsible for repaying the loan, even if your startup doesn't survive.
If your business expansion plan includes launching a new product, crowdfunding allows you to raise money from your fans. This is often less expensive than taking out a loan. Platforms like Kickstarter typically take a fee of around 3% of the funds you raise. But you won't be saddled with repayments.
Venture capital and angel investments
Equity funding from venture capital firms or individual angel investors involves selling ownership in exchange for financing. This means you won't have complete control of your business, but you won't have to repay any debt. If you decide to go this route, polish up your business plan and growth plan and put together a pitch deck before reaching out.
How has COVID-19 affected business loan availability?
COVID-19 has made it more difficult to qualify for a traditional business loan — though that may not be the case for long. Many lenders paused their regular loan programs to focus on offering Paycheck Protection Program (PPP) financing. And those that didn't generally approved fewer applications while it was uncertain where the economy was heading.
You typically need a good credit score of at least 670 and consistent revenue to qualify for most business loans after COVID-19. As the economy recovers, more options may be available to business owners with lower credit scores.
Recap: best business expansion loans
These lenders offer some of the best options available when you want to expand your business:
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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