Whether you need a long-term loan, a line of credit or a business cash advance, $25,000 loans come in many flavors. While you don’t necessarily need great credit to qualify for this amount, you generally need to be in business for at least six months to a year with a minimum annual revenue between $50,000 and $100,000.
Compare providers to make sure you’re getting the most competitive rates and terms before you apply.
Where to get a $25,000 business loan
Most lenders offer $25,000 business loans, including banks, credit unions, alternative online lenders and marketplaces like Lendio. While established businesses might find more competitive rates at a large national bank, newer businesses might have better luck with an online lender or an SBA loan specialist.
Compare $25,000 business loans
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What types of $25,000 business loans are available
Business loans for $25,000 cover a wide range of funding needs. Here’s a list of the most common types.
Type of financing
Description
Use
Short-term business loan
An unsecured lump sum loan with repayment terms of up to 18 months
To cover unexpected costs or to survive a downturn
Business term loan
An unsecured lump sum loan with repayment terms of up to 10 years
To provide working capital for more established businesses
Business line of credit
A revolving line of credit for ongoing expenses
To tap into funds as needed and pay off as you go
Merchant cash advance
A quick turnaround loan for newer businesses or those with bad credit
To borrow against your future credit card sales
SBA loan
A low interest small business loan partially backed by the government
To provide working capital to grow your business
Equipment financing
A collateralized term loan to fund equipment
To pay for any kind of equipment for your business
Inventory factoring
A loan with an amount tied to your receivables
To access cash by selling your purchase orders or receivables
Inventory financing
A loan with an amount tied to your receivables
To access cash with a loan backed by your invoices
Secured vs. unsecured business loans for $25,000
Business loans can either be secured or unsecured. Secured business loans may require some kind of collateral — especially if it’s an equipment loan. However, it’s possible to get an unsecured business loan of $25,000 from select online lenders.
How to qualify for a $25,000 loan
While a $25,000 business loan is well below the average business borrowing amount of $660,000, it’s still substantial enough that you’ll need to meet certain revenue and other criteria, including:
At least six months in business. Many lenders require businesses to have a track record of six to 12 months. However, loans for very new businesses are generally short-term options like merchant cash advances, which can be expensive compared to other loans.
Minimum monthly revenue. A general rule of thumb is that lenders will loan you 10% to 30% of your annual revenue. If you earn $100,000 a year, you could potentially borrow between $10,000 and $30,000.
Good personal credit. Business lenders often rely on personal rather than business credit scores. Depending on the type of financing, you could qualify with a score as low as 520, although 670 and up is better.
A personal guarantee. The lender may also ask you for a personal guarantee, especially for unsecured loans not backed by collateral.
How much does a $25,000 business loan cost?
The cost of a $25,000 business loan can vary widely depending on the type of loan. For example, a traditional bank term loan might start as low as 8% APR, while SBA loan rates are capped at the prime rate plus 2.25% to 2.75% for most programs, plus additional fees.
For shorter-term financing like merchant cash advances and lines of credit, APRs can run much higher — typically starting below 10% for the best credit borrowers and reaching as high as 60% APR or more for borrowers with lower credit scores.
Use the calculator below to find out how much your loan might cost based on different rates and terms.
It depends on your loan. Most $25,000 loans are term loans, lines of credit, merchant cash advances (MCAs) and invoice factoring and financing. Because these loan types are so different, payments vary widely. They might be monthly for a term loan but weekly or even daily for an MCA. And if you use invoice factoring, you won’t repay the factoring company at all — rather, you sell your invoices to the company for a discount.
How to get a $25,000 business loan
The application process depends on the lender. While traditional bank loans might require a lot of paperwork, some online lenders offer “no-doc” loans that connect to your accounts to verify your financials immediately.
Regardless of the lender, here are the general steps to apply for a $25,000 business loan:
>Determine the type of loan you need. Before you start comparing, decide what type of loan you need. If you’re funding a one-time cost, look for a term loan. If you have ongoing expenses or cash flow dips, look for a line of credit or an MCA.
Compare lenders. Find and compare lenders that offer $25,000 loans by looking at the loan’s APR, terms and requirements. Do you need the money right now, or would you rather do more research first? Online lenders can get you funding faster than banks.
Check your eligibility. Online lenders typically offer online prequalification so you can find out if you’re eligible and check your rates. But if you’re applying through a bank, you might have to call or apply in person.
Ready your documents. For a bank, prepare to gather your personal and business tax returns, profit and loss statements, and bank statements. For an online lender, you may get away with just three months’ worth of bank statements.
Fill out the application. This can take a few minutes to over an hour, depending on the lender and type of loan. No doc lenders tend to have the fastest application processes, allowing you to connect to your bank accounts directly.
Submit any additional information. Your lender reviews your application and reaches out for more information or documents if needed. Usually, you can submit these online, by mail or in person at a branch.
Read and sign the contract. Review your final offer, making sure the rates, terms and monthly payments fit your business’s budget. If you agree, sign and submit your contract.
The turnaround time on $25,000 loans depends on the loan type. SBA loans can take weeks to process, while short-term loans from online lenders can take one business day or less. For the fastest application times and turnaround, consider a no-doc lender.
Can I get an SBA loan for $25,000?
Yes, many SBA loan programs are available for $25,000, including the popular 7(a) and Express loan programs. Loans backed by the Small Business Administration (SBA) offer low rates and high loan amounts to businesses that have a hard time qualifying elsewhere. But they also come with some of the highest rejection rates in the market.
Can I get a loan for $25,000 with bad credit?
It’s possible to find $25,000 in business financing, even with bad credit. But your options may be more limited. The most common types of business loans and financing available to bad credit borrowers are merchant cash advances, invoice factoring or financing, as well as loans backed by collateral, such as equipment loans and leases.
Can I get a loan for $25,000 to start a business?
Yes, but your options are basically limited to SBA 7(a) and SBA microloans and possibly SBA 504 loans to finance equipment. However, SBA loans tend to have somewhat stringent requirements. You’ll need decent credit and a solid business plan showing how the business will generate revenue to qualify.
Because it can be hard to qualify for an SBA loan, some entrepreneurs use their own savings or take out a personal loan to finance a new business. Personal loans don’t have a time in business or revenue requirement, making them ideal for startups — if the lender allows the funds to be used for this purpose.
While it’s likely easier to qualify for a $25,000 loan than a larger amount, you’ll still need to meet the lender’s criteria. Compare the best small business loans to see the amounts and rates you may qualify for.
Kat Aoki is a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Forbes Advisor, Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time.
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