How much does a business loan cost? | Compare rates and fees

How much does a business loan cost?

Learn how to borrow funds for your business while keeping your costs down.

Deciding to get a business loan, whether your business is established or a startup, is a big financial decision. A loan can give you access to funds to keep your business growing. It’s important to determine whether your business can actually afford the loan or not. There are a range of business loans, each with different interest rate and fee structures, which can make it hard to compare costs. In this guide you’ll learn how to compare business costs so you can make an informed decision. Most business loan lenders require you to have been in business for at least a year and meet certain revenue criteria. If you have a newly established business, check out our guide on startup loans.
OnDeck Small Business Loans

OnDeck Small Business Loans

Among the largest online business lenders offering term loans and lines of credit at competitive fixed rates.

  • Minimum Amount: $5,000
  • Maximum Amount: $500,000
  • Loan Term: 3 to 36 months
  • Simple online application process with fast decisions
  • Dedicated loan specialists and loyalty benefits
  • Must have been in business for at least one year with annual revenue of $100,000+
  • Must have a personal credit score of 500+

    How much does a business loan cost?

    The cost of a business loan depends on the lender and the product for which you are approved. A business loan that is less risky for a lender, such as a loan secured with real estate, is likely to come with a lower interest rate and lower fees. Loans that are more flexible, such as lines of credit, or that are higher risk, such as unsecured loans, tend to come with higher rates and fees. Read further to see a breakdown of typical business loan fees and rates.

    What fees can I expect to pay for different types of business financing?

    Financing typeTypical fees
    Business credit card
    • Annual
    • Balance transfer
    • Cash advance
    • Check processing
    • Exceeded credit limit
    • Foreign transaction
    • Late payment
    • Returned payment
    • Reward program
    Business vehicle financing
    • Annual
    • Application
    • Check processing
    • Documentation
    • Establishment
    • Late payment
    • Origination
    • Prepayment
    • Returned payment
    Cash-flow lending
    • Annual
    • Application
    • Check processing
    • Documentation
    • Establishment
    • Late payment
    • Monthly
    • Origination
    • Prepayment
    • Returned payment
    Equipment financing
    • Annual
    • Application
    • Check processing
    • Documentation
    • Establishment
    • Late payment
    • Origination
    • Prepayment
    • Returned payment
    Invoice financing
    • Discount
    • Documentation
    • Establishment
    • Factoring
    • Late payment
    • Monthly
    • Prepayment
    • Processing
    • Returned payment
    • Service
    Line of credit
    • Annual
    • Cash advance
    • Draw
    • Establishment
    • Late payment
    • Maintenance
    • Renewal
    • Returned payment
    Merchant cash advance
    • Annual
    • Application
    • Documentation
    • Establishment
    • Factor
    • Origination
    SBA loan
    • Check processing
    • Guaranty
    • Late payment
    • Packaging
    • Prepayment
    • Returned payment
    Short-term business loan
    • Application
    • Check processing
    • Documentation
    • Establishment
    • Late payment
    • Origination
    • Prepayment
    • Returned payment
    Term loan
    • Annual
    • Application
    • Check processing
    • Documentation
    • Establishment
    • Late payment
    • Origination
    • Prepayment
    • Returned payment
    Trade financing
    • Commission
    • Documentation
    • Establishment
    • Excess drawing
    • Handling
    • Issuance
    • Monthly
    • Negotiation
    • Withdrawn application

    Compare business loans from top lenders

    Rates last updated February 21st, 2018
    Name Product Product Description Min Loan Amount Maximum Loan Amount Requirements
    LendingTree Business Loans
    Compare multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $75,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    LoanBuilder, A PayPal Service Business Loans
    $5,000
    $500,000
    Annual business revenue of at least $100,000, at least 1 year in business, personal credit score of 600+.
    National Business Capital Business Loans
    Get a large business loan to cover your financing needs, no matter what the purpose is.
    $10,000
    $5,000,000
    Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.
    Kabbage Small Business Line of Credit
    A simple, convenient online application could securely get the funds you need to grow your business.
    $2,000
    $250,000
    Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.
    SmartBiz SBA Loans
    Get funding for your small business with a government-backed loan and extended repayment terms.
    $30,000
    $5,000,000
    Personal credit score of 650+; US citizen or permanent resident; Business must be 2+ years old; Annual revenue of $50,000+; No outstanding tax liens; No bankruptcies or foreclosures in past 3 years.
    Excel Capital Management Small Business Loans
    Get personalized financing options that suit your unique business needs in just a few simple steps.
    Varies by loan type
    Varies by loan type
    Your business must operate in the US, be at least 1 year old and have monthly revenue of $15,000+.

    Compare up to 4 providers

    What fees can I expect with a business loan?

    Lenders charge various fees, so keep an eye out for any of the following when you apply:

    • Origination fee. Expect to pay: 3% to 5% of your loan amount.
      Lenders charge origination fees to cover the costs of processing your loan application including verifying information, credit checks and administrative expenses. They typically take your origination fee directly out of your loan amount, so you’ll want to calculate how much you need to apply for to get the amount you want after the origination fee is subtracted.
    • Withdrawal fee. Expect to pay: $1 to $4 per withdrawal.
      If your loan is issued with a Visa or debit card, you may pay a fee for every transaction executed with your card, especially if you’re withdrawing from another bank’s ATM.
    • Wire transfer fee. Expect to pay: $10 to $20 per transfer.
      This fee is meant to cover the extra cost of sending a payment via wire transfer rather than direct debit.
    • Late payment fee. Expect to pay: Either $10 to $35 or between 3% and 5% of the amount due.
      Lenders usually charge a fee if a repayment is late, typically after a grace period of 10 to 15 days. Read the terms of your loan to learn about your lender’s policy on late payments.
    • Nonsufficient funds (NSF) fee. Expect to pay: Either $10 to $35 or between 3% and 5% of the amount due.
      Lenders charge NSF fees if you set up autopay or otherwise authorized them to withdraw an amount from your account that is doesn’t have. It’s typically the same as your lender’s late fee.
    • Prepayment penalty. Widely varies.
      If you settle the whole balance before the end of the loan term or make early repayments, you may be charged fees. Prepayment penalties widely vary depending on your loan type and lender. They can either come as a flat fee, a percentage of the amount you owe or change depending on how much is left in your loan term. Find out which business lenders don’t charge prepayment fees.
    • SBA guarantee fee. Expect to pay: $0 for loans of $150,000, 0.25% for loans over $150,000 with a term of one year or less, 3% for loans $150,000 to $700,000 with a terms over one year and tack on another 0.25% for loans where the SBA guarantees a portion worth over $1 million (85% of the loan amount).
      The Small Business Administration (SBA) requires all lenders to pay a fee, which some choose to pass off to borrowers. The SBA charges it in exchange for a government guarantee — essentially taking responsibility for the loan if it goes into default.

    What interest rates are charged on a business loan?

    Depending on your loan type, you could be charged any of the following interest rates:

    • Fixed interest rate. This rate remains the same for your whole loan term, which in turn keeps your repayments the same.
    • Variable interest rate. Your interest rate fluctuates throughout your loan term and your repayments can change.
    • Factor rate. This is a decimal figure that is essentially a payment multiplier. The interest does not compound and is charged to the principal loan amount. It’s often applied to unsecured, short term business loans.
    • Monthly fee. This type of cost structure may be used by invoice financing and factoring companies. The monthly rate is a percentage and is charged to the value of the invoices submitted.

    Find out if business loan interest is tax-deductible

    What should I keep in mind when comparing business loan costs?

    Taking the time to compare business loans will help you narrow down the loan options available, as well as the lenders most likely to approve your application. Make sure that your business is able to afford repaying a loan before submitting an application. Besides the associated fees, don’t forget to evaluate the basics, such as loan amount and loan term. Check out our guide on business loans for more tips on how to compare your options.

    Frequently asked questions

    Was this content helpful to you? No  Yes

    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 only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and our Privacy Policy.

    2 Responses

    1. Default Gravatar
      CrossfaithOctober 16, 2017

      How much fee will it cost me to get a business loan of $50,000 to $100,000?

      • Staff
        JudithOctober 16, 2017Staff

        Hi Crossfaith,

        Thanks for contacting finder, a comparison website and general information service.

        The fees associated with a business loan depends on on the lender and the product for which you are approved.

        On the page you’re viewing, we have a table in which you may go to each lender’s page by clicking the “Go to site” and “More” so you can compare the lenders and so you can make a sound decision on which option that would best suit your needs.

        I hope this helps.

        Best regards,
        Judith

    Go to site