Most types of lenders offer $20,000 business loans. Whether you need a long term loan, a business cash advance or a line of credit, $20k loans come in a variety of options. You won’t necessarily need perfect credit to qualify, but you’ll need to meet time in business requirements of at least six months to a couple of years depending on the lender you work with. Your business will also need to generate at least $50k to $100k in annual revenue.
Compare all your options before applying to find the best $20,000 loan for your business’s needs.
You can get a $20,000 business loan with most types of business lenders. Online lenders offer the most options when it comes to loans of this amount.
Community banks and nonprofits like community development financial institutions (CDFIs) or microlenders also offer loans of this size. These tend to offer lower rates than you’ll find online and provide guidance to help grow your business.
If you want a $20,000 business loan to start a business, community banks and microlenders sometimes offer programs that can fund a business through its first few months. A personal loan from a lender like Upstart can also be a good option for entrepreneurs with good credit and a source of income outside their new venture. Almost all offer $20,000 personal loans that you can use for startup costs.
The application process for a $20,000 business varies depending on your business, your personal finances and what you want to fund. But generally, it includes the following steps.
Overall, the process of getting a $20,000 business loan can range from one day to a few weeks. Online lenders tend to be the fastest. Banks, CDFIs and microlenders can take longer — especially if it’s your first loan with that institution.
You can get a $20,000 business loan with bad credit by applying with a lender that accepts personal credit scores below 580 — what FICO considers to be bad credit.
Some online lenders specialize in bad credit business financing. And some, like merchant cash advance and factoring companies, don’t consider your credit score at all. But these are often much pricier than more traditional types of financing.
Many microlenders and CDFIs also offer $20,000 loans to business owners with bad or no credit, often at lower rates than online lenders. Though you might have to enroll in a training course to qualify.
Some community banks may also be willing to overlook a low credit score for a $20,000 loan, if you have an explanation for negative marks on your credit report.
The cost of a $20,000 business loan depends on the rates and terms you qualify for. Use our calculator to estimate how much you’ll pay each month and in total.
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Yes, you can get a $20,000 loan backed by the Small Business Administration (SBA). Technically the SBA doesn’t have a minimum loan amount for any of its programs.
But an SBA microloan might be a better choice for a loan of this size. The maximum SBA microloan is $50,000, while the average is around $13,000.
Entrepreneurs and business owners with income outside of their company may want to consider a personal loan if they can’t meet time in business or revenue requirements. Select Compare for up to four providers to see how their APRs, credit score requirements and loan amounts stack up.
Smaller banks and online lenders might offer the most options when it comes to $20,000 business loans. And since $20,000 is a relatively low amount for a business loan, you could have an easier time qualifying for a loan as a startup or with bad credit. Compare more options by reading our guide to business loans.
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