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Compare Small Business Loans in 2024

Explore financing options to start or grow your business — and find the best lender to fit your needs.

Best for small businesses

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  • Required time in business: 6+ months
  • Required monthly revenue: $20k+
  • Min credit score: 550+

For a variety of finance options

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  • Required time in business: 6+ months
  • Required monthly revenue: $10k+
  • Min credit score: No credit needed

Best for business line of credit

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  • Required time in business: 1+ years
  • Required monthly revenue: Average of at least $3,000
  • Min credit score: 660

Compare business loans from our partners

To help you choose the best fit for your company, we’ve reviewed over 130 business loans — including SBA loans, term loans, lines of credit, merchant cash advances and more. Use our table to compare lenders, and then select Learn more to visit the lender’s site or More info to read our review.
Name Product Filter Values Min. Amount Max. Amount APR Requirements
Lendio business loans
Finder Score: 4.8 / 5: ★★★★★
Lendio business loans
Varies by lender
Operate business in US or Canada for 6 months or more, have a business bank account, minimum 500 personal credit score, at least $20,000 in monthly revenue
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
Olympus Business Capital
Finder Score: 3.8 / 5: ★★★★★
Olympus Business Capital
Not stated
Been in business for 6 months registered with the state, active and open bank account in business name, have $10,000 of revenue each month
No credit needed. Funding up to $100k with a variety of finance options to best fit your business needs.
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American Express® Business Line of Credit
Finder Score: 4.4 / 5: ★★★★★
American Express® Business Line of Credit
Minimum FICO score of at least 660 at the time of application, have started your business at least a year ago, and an average monthly revenue of at least $3,000
Access lines of credit for your small business even if you aren't currently an Amex customer.
Finder Score: 4.9 / 5: ★★★★★
Rates start at 1% per month
500+ FICO score, $200,000 annual revenue, 6 months in business, most recent business bank statements
Same day approval
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Fundera business loans
Finder Score: 4.9 / 5: ★★★★★
Fundera business loans
Varies based on lenders
$60,000+ of annual revenue, 550+ personal credit score, in business for 6+ months
Get connected with short-term funding, SBA loans, lines of credit and more.

Your options for borrowing money for your business go beyond a traditional term loan to include lines of credit, merchant cash advances and other types of business loans. The business financing you choose should depend on your business and why you need the money.

What is a business loan?

A business loan is any type of financing that’s used to fund business expenses — from paying staff wages and purchasing inventory to expanding your business or improving cash flow to investing in marketing or covering unexpected emergencies.

Startups and entrepreneurs can look to traditional lenders like banks and credit unions as well as online lenders, crowdfunding sites and the Small Business Administration for business funding. Requirements, rates and terms depend on the lender and your business.

Your business typically needs to be at least six months old and bring in over $50,000 a year in revenue to qualify. Other factors like your personal credit score and relationship with the lender also play a role.

Depending on the type of financing, you can find unsecured options that don’t require collateral or secured loans backed by your business assets or the item you’re purchasing. Interest rates can be fixed or variable, with repayment terms lasting anywhere from six months to 25 years.

Guides to other business financing options

Types of small business loans

There are several types of financing that you can use to start a business, pay for vehicles or equipment, access working capital and more. Each comes with varying interest rates and loan repayment terms.

Term loans

Business term loans offer a lump sum you repay in installments plus interest and fees. Term loans come in short-term and long-term loan options. They’re best for funding a one-time expense, like buying a piece of equipment or purchasing a new business.

  • Typical loan amounts: $5,000 to $500,000
  • Typical starting rates: 6% APR
  • Typical fees: Origination fee
  • Typical loan term: Two to 10 years
  • Best for: Funding a one-time purchase or expense

Term loans can either be secured with collateral or unsecured. But even unsecured business loans typically require a personal guarantee from the business owner.

A business loan marketplace like Lendio allows you to compare term loan offers from multiple lenders.

Lines of credit

A business line of credit gives your business cash access as needed to cover working capital expenses. It’s a good option if you have a seasonal business, regularly need funds to purchase inventory or want to have funds available for unexpected expenses. Like a term loan, a business line of credit can require collateral or be unsecured.

  • Typical credit limits: $5,000 to $250,000
  • Typical starting rates: 8% APR
  • Typical fees: Origination fee, monthly or annual maintenance fee, withdrawal fee
  • Best for: Ongoing expenses and working capital

Most business lines are revolving credit, meaning that the credit limit replenishes as you pay it off. Typically, each withdrawal turns into a short-term loan, though some lenders might only require minimum monthly payments on your balance. A marketplace like Lendio offers lines of credit from different lenders.

SBA loans

The Small Business Administration (SBA)’s government-backed business loan programs are designed to help small businesses access funding. SBA loans offer low rates and high loan amounts to businesses that are too small or too new to qualify for your typical bank loan. These are usually secured with collateral.

  • Loan amounts: Up to $5 million
  • Typical rates: Usually around 5.5% to 8%, but SBA loan program rates vary
  • Typical fees: SBA guarantee fee, other fees depending on the lender and loan program
  • Typical terms: Five to 25 years
  • Best for: Small businesses with strong financials and good credit that can’t qualify for a bank loan

Several different SBA loan programs cover almost every type of expense, from working capital to buying commercial real estate. SmartBiz, our best choice for SBA loans can help you find the right loan for you by simplifying the application process

Vehicle and equipment financing

Whether you need to finance a vehicle or the equipment necessary to run your business, you may be able to finance these expenses 100%, depending on your business credit score and monthly revenue.

  • Typical loan amount: 80% to 100% of the vehicle or equipment value
  • Typical financing cost: 8% to 30% APR
  • Best for: Buying the equipment you need to run your business

This type of financing typically offers fixed-rate installment loans that use the purchased vehicles or equipment as collateral. But, depending on the kind of business you run, a vehicle or equipment lease may work better for you.

National Funding, a lender that specializes in this kind of loan, is our pick for best equipment financing lender.

Merchant cash advances

Companies with large amounts of credit card sales may consider merchant cash advances for their business financing. These advances offer quick access to revenue from sales and then require a fixed-charge repayment based on a percentage of your sales. Merchant cash advances can be set up as daily or weekly financing.

  • Typical advance amount: $2,500 to $1 million
  • Typical financing cost: 1.1 to 3 times the advanced amount
  • Best for: Accessing future revenue from consumer credit card sales

If your business cannot qualify for other types of business financing, merchant cash advances can provide a temporary cashflow solution. Importantly, you can get your funding quickly, but it can be one of the more expensive business financing options out there.

Consider a company like Fora Financial, which offers cash advances from $5,000 up to $750,000 if you’ve been in business for at least a year.


There are many differences between business loans and investors. But first, let’s define an investor. An investor is a person or organization who provides funding for your business in exchange for a share of the company, with hopes that they’ll get a return on their money.

Typically, you’ll have several types of investors to choose from. No matter which you choose, you’re indefinitely giving up a slice of your company’s value — called equity — in exchange for funding.

Invoice financing and factoring

Invoice financing and factoring offer an advance on unpaid customer invoices. Invoice financing is generally available for invoice volumes under $20,000, though invoice factoring can run from around $20,000 to $10 million. Instead of interest, you pay a monthly or weekly fee based on the time it takes for customers to fill their invoices. These fees can be high compared to the interest you might pay on your typical business term loan or line of credit.

  • Typical advance rate: 85% to 100% of unpaid invoice’s value
  • Typical fees: 2% to 15% of your invoice’s value
  • Typical terms: 90 days per round of financing
  • Best for: Short-term financing needed to fill orders

Invoice financing allows you to maintain control of your unpaid invoices and offers up to 100% of the invoice value upfront. Invoice factoring involves selling unpaid invoices to a company. The factoring company usually offers 85% to 95% upfront and the rest, minus a fee, after your customers fill their invoices.

Our choice for the best invoice financing and factoring lender is FundThrough, which offers up to 100% of your accounts receivables.

What is the debt service coverage ratio?

The debt service coverage ratio — more commonly called the DSCR — is an industry measure of the cash income a business has left over at month’s end that can be used to service its debt. It includes principal, interest and lease payments.

The DSCR is a main benchmark used to determine your ability to repay a loan. When you apply for a loan at a bank or credit union, the lender uses your DSCR to decide whether your business can manage its repayments. If your business isn’t generating the income it needs to pay its operating costs and make repayments, then a lender will likely pass on your application.

How to calculate your business’s DSCR

Calculate your DSCR by dividing your annual business operating income by your total annual debt service level — the amount of principal and interest you must repay in a given year. The total annual debt service level will include your current debt and the loan you’re applying for.

A lender may use a different figure when assessing your operating income. Some use the earnings metric called EBITDA — or earnings before interest, taxes, depreciation and amortization — while others add net operating income to depreciation and any other noncash charges.

As a result, the DSCR figure won’t be the same across lenders, which can make a direct comparison among them difficult. Some also express the DSCR as a percentage rather than as a ratio.

Approval rate by loan type

A closer look:

  • Vehicle and equipment loans: 79%
  • Merchant cash advance: 72%
  • Line of credit: 68%
  • Term loan: 58%
  • Personal loan: 57%
  • SBA loan: 55%

The type of loan you get and the lender you work with are the biggest factors that determine how much you can borrow with a business loan. And you might find easier approval with a business loan backed by a form of collateral — be it a car, a tractor or your business’s future sales. A secured loan is less risky for the lender, who can sell your collateral to soften the financial hit if your business defaults.

Can I get a business loan as a sole proprietor?

In a sole proprietor, a single person owns and runs an unincorporated business. While a sole proprietor can have employees, they are the only ones paying income tax on profits earned.

Because sole proprietors have little separation between business and personal finances, banks and other financial institutions often view them as risky investments. If a sole proprietor loses out on an important contract, gets sick or cannot continue their business for any reason, the lender has wasted money on a loan that will likely go unpaid.

This risk makes it difficult for sole proprietors to secure a business loan, but it’s not impossible. With the right documentation and a good business plan in place, there are lenders willing to offer loans to sole proprietors.

5 best loans for sole proprietors

Loan typesTypical amountsHow it worksPros and cons
SBA loan

Learn more

$5,000–$5 millionAn SBA loan is backed by the government. Although these loans are harder to qualify for, they’re designed for small businesses with just a few employees and target borrowers who’ve had trouble getting a traditional loan elsewhere.
  • Lower rates than similar loans from banks
  • Requires excellent credit
  • Must have solid business financials
Personal loan

Learn more

$2,000–$100,000A personal loan can be used for business expenses. The borrowing amounts are typically lower, and it’s harder to deduct the cost on your taxes.
  • Good for small, temporary cash flow shortages
  • Approval based on you, not your business
  • Exposes you to more risk than a business loan
Invoice financing

Learn more

80% of the invoice amountInvoice financing gives you an advance on your unpaid invoices. Costs are typically a percentage of the invoiced amount, and you’re expected to pay the advance back quickly after your invoice is due.
  • A reasonably low-risk option for an established trader
  • Must have invoices due
  • Not an option for startups
Line of credit

Learn more

$5,000–$1 millionA line of credit allows you to draw from your credit limit whenever you need, and you only pay interest on the money you borrow.
  • Less risk and cost than a lump sum
  • Access your funds quickly
  • Requires good credit
Term loan$2,000–$5 millionA term loan allows you to borrow a single lump sum and pay it back over time.
  • Can provide your business with a large amount of capital
  • Fixed monthly payments
  • Requires rigorous documentation
  • Riskier than other loan option

Choosing a loan type: Sarah’s landscaping service

Consider this scenario: Sarah is a self-employed landscaper who designs boutique gardens for wealthy homeowners and small businesses across Seattle. She employs a part-time assistant and hires landscapers on a project-by-project basis.

Recently, a large hotel chain contracted her to design and build a courtyard garden for a new property. While promising, this is a much bigger job than her usual projects, and she realizes she needs at least $60,000 to hire more laborers and rent equipment.

Sarah’s choice: A term loan
With a good idea of her costs and safety knowing her client is large and stable, Sarah opts for a term loan from a bank. Because her business has been in operation for years, she’s able to get a fixed repayment plan with a low interest rate of 9.25%.

Business loans for veterans

Veterans may get specialized loan programs designed to support and empower military veterans in their entrepreneurial endeavors. Some business loans for veterans may come with favorable terms and conditions, such as lower interest rates, flexible repayment options, and reduced or waived fees.

You may also be able to take advantage of small business grants and veteran entrepreneurship programs through the SBA — or get a line of credit, equipment loan or accounts receivable loan from a bank or online lender.

Financing for high-risk industries

Even if you’ve been in business for years, have excellent credit and are turning a profit, your business still might struggle to qualify for a loan if it’s part of a high-risk industry.

Lenders generally consider industries high risk if they are more likely to fail. For example, industries like alcohol and gambling might be considered high risk because they’re subject to regulations that frequently change. However, other industries like restaurant and retail might be seen as risky because revenue isn’t always guaranteed.

Examples of high-risk industries include:

If you own a high-risk industry and can’t get approval from traditional lenders, you can find other types of financing, though they tend to be expensive.

  • Invoice factoring. This financing not only charges up to 15% of your invoice value in fees, but your business might also be required to sign up for several months or years of factoring, which can make it difficult to qualify for other less-expensive types of financing in the future.
  • Merchant cash advances. If your business relies on credit card sales, MCAs give you quicker access to your money but can charge up to three times the amount you were advanced.
  • Vehicle and equipment loans. These loans are secured using the purchased vehicle or equipment and can have better terms and fees. But you risk losing your collateral if you default on your loan for whatever reason.
  • Short-term loans. If you need money quickly and can pay it back just as quickly, a short-term loan may be right for your business. But keep in mind that you’ll have to repay the loan within 12-18 months, and your interest rate may be higher than more traditional options.
  • SBA loans. The Small Business Association can offer the best rates, but qualifying for their loans can be difficult. The process is also long, so this isn’t a good option if you need money fast.

Using your business loan for marketing

If you’re looking to expand your business through advertising, you can use a business loan to fund a marketing campaign in some cases. It helps to nail down your marketing strategy before you apply for financing.

Here are some common ways marketing loans can be used.

  • Paid digital marketing. Digital marketing often involves setting up a paid advertising campaign that targets specific customers on search engine results, websites, social media platforms and even e-commerce sites like Amazon.
  • Sponsored content. Sponsored content, also known as native advertising, involves paying a publication to write an article or create other content that mentions your product. Financing a sponsored content campaign allows you to reach a new audience and can be a more cost-efficient way to increase sales than digital marketing.
  • Social media campaigns. Social media campaigns focus on reaching a new audience through Twitter, Instagram, Facebook and other platforms. You can use a business loan to buy ads, hire a team to reach customers by posting on social media through your brand’s accounts or sponsor an influencer to gain access to their followers.
  • Email campaigns. Email marketing involves sending out newsletters and promotions to current customers and people who might be interested in your products or services. It’s one of the cheapest ways to advertise — in some cases, you might only need capital to buy a client management software system.

How do online business loans compare to bank loans?

It may seem like every online lender offers the same thing, but that doesn’t make it true. Like any loan option, compare the features of the loan and the rules set by the lender to get the best online business loan that offers the most for your money. The brands listed below have some features in common, giving you a solid way to kick off the comparison process.

  • Higher approval rates than banks. Online lenders look at real-time business health rather than analyzing a few data points from your credit report. This is a more accurate way of calculating risk, allowing them to approve more loans.
  • Quick processing time. Many lenders offer fast approval by looking directly at your business data and bank information. Rather than filling out forms or answering a lot of questions, you connect your business accounting data. The lender can use the information it needs.
  • Reduced fees and transparent fee structures. Bank loans tend to come with an early repayment penalty, but the majority of alternative lenders waive this fee. As they’re smaller institutions that use technology to approve loans, this translates into less overhead costs and lower fees for you.
  • Varied products. Whether you’re after a short-term business loan, a line of credit, a larger long-term loan or any other financing options, online and technology-based lenders have products available.

What’s a no-credit-check business loan?

A no-credit-check business loan is a type of business financing where the lender doesn’t consider your credit score during the application process. It’s typically short-term financing and can cost more than other options.

Often, no-credit-check business loans don’t work like a typical unsecured term loan. Most require some kind of collateral or a personal guarantee. Others might consider different risk factors, like your clients’ credit scores.

Can I get a no-credit-check loan for my startup?

It’s possible but not likely. Most startup-friendly loans tend to rely on the business owner’s credit to make up for the fact that your business doesn’t have a long record of revenue.

Unless you have enough money in a retirement plan to fund a new business with a ROBS, you might have difficulty finding a legitimate lender willing to forego a credit check completely. Here’s how startup funding works by credit score:

  • Very good credit: 740–850. You’ll likely qualify for startup loans based on your credit score alone, or consider taking out a personal loan to fund your business. You don’t need to worry about passing a credit check because you’ll pass with flying colors.
  • Good credit: 670–739. With good credit, you still have a wide range of options and will likely get approved for most startup and personal loans.
  • Fair credit: 580–669. Your options are generally limited to alternative lenders and no-credit-check financing like crowdfunding and ROBS. However, you’ll still make the cut for a handful of lenders specializing in startup loans, like Diamond Business Loans.
  • Poor credit: 300–579. You might have better luck pitching to investors than getting a business loan. You could qualify for some short-term loans, but they’ll likely come with high rates and fees. You can also look for a local nonprofit willing to offer financing to someone with a low credit rating.

Should I get a business loan or a credit card?

It depends on what you need to finance. Business loans are designed to cover a large one-time expense and you’ll have low-interest business loan options to choose from depending on youor credit, while credit cards are designed to cover smaller expenses that are hard to predict over a long period.

It also depends on your cash flow. If you have the cash flow to pay off your credit card balance each month, you won’t have to pay any interest.

Some credit cards come with a 0% APR promotional period, which can last as long as 12 months. If you pay off the balance before the period is up, you won’t have to pay interest.

Which is right for my business?

Compare business credit card if you …Compare loans if you …
  • Can pay off your balance within a year
  • Want to earn rewards on purchases
  • Want to track employee spending
  • Need a revolving credit limit
  • Want a credit limit with lower approval requirements
  • Have a poor credit score or no credit history
  • Want an ongoing low APR
  • Don’t want to pay an annual fee
  • Want loan flexibility
  • Need a high credit limit
  • Have an excellent credit score
  • Have established business credit

How to get a small business loan

Most small businesses can get a business loan by determining how much funding the business needs and comparing lenders. Qualifications generally include:

  • More than three years in business
  • A credit score over 670
  • More than $100,000 in revenue

If you don’t meet qualifications, you may be able to find financing from an SBA loan provider or an alternative lender if bank loans aren’t an option. Alternative lenders include microlenders, online business loan providers and factoring companies. They might not offer competitive rates compared to a bank, but they can help your business get to a place where it’s eligible for a bank loan.

How long does it take to get a business loan?

The turnaround time for a business loan largely depends on the lender you work with and the type of financing you’re interested in. It can take a bank or credit union one to two weeks to process a business loan application and disburse your funds.

Alternatively, online lenders may be able to offer you an instant approval decision and fund your loan within a few business days, while others may be able to offer loans with same-day funding. And with SBA loans, the entire process can take several months.

How to compare lenders

Before you start comparing lenders, calculate how much you need to borrow, assess the state of your business’s finances, check your personal credit report and choose the type of financing you need.

Once you have a better idea of what you need, look for lenders offering the loan amount and type of financing you need — with basic requirements that your business meets.

Then, compare the rates, fees, terms and turnaround time for each product. You might want to weigh other factors that are important to you, like no paperwork requirements or lower rates for repeat borrowers. If you’re applying online, you may also want to consider the steps lenders take to protect applicants’ information.

Using a lending marketplace like or Lendio may also offer a way for you to quickly compare multiple loan offers from top lenders with just one form.

Alternatives to a business loan

Not ready to take out a business loan just yet? Consider one of these alternatives:

  • Personal loan. Some lenders will allow you to use a personal loan for business expenses. This can be ideal for startups and businesses struggling to meet minimum revenue requirements.
  • Business credit card. For small cashflow needs, a business credit card may be a good option. It can help build your business credit score while earning points or cash back for every dollar spent.
  • Grants. For free funding you don’t need to repay, you might want to look into business grants. You may be able to find opportunities through federal and state government agencies, as well as private corporations. Just keep in mind these can take months to apply for — and are generally quite competitive.
  • Investor financing. Funding from an angel investor can help take your business to new heights. But you’ll have to be willing to give up equity in your company in return.
  • Crowdfunding. Are you a startup or newer business thinking of expanding? You might want to look into crowdfunding — it’s a great way to judge interest in your area for your product or service and drum up funding.

How does crowdfunding work?

Crowdfunding is a way to raise a one-time sum that doesn’t need to be repaid. There are several types of crowdfunding, though seed funding — or rewards-based crowdfunding — and equity crowdfunding are common options. Both typically take around a month to raise the funds you need and are great for exciting projects.

With rewards-based crowdfunding, your business sets up an online campaign to raise money from fans, family and friends and offers prizes in return for donations. With equity crowdfunding, your company raises money from investors in exchange for a share of ownership in your business.

Should I consider crowdfunding?

Crowdfunding is ideal for businesses that have an exciting or profitable project on the horizon. But there are some situations where you may want to think twice.

Consider crowdfunding if…

  • Your business can’t qualify for a loan.
  • You need money to start a business.
  • You’re in a high-risk industry.
  • You don’t need money right away.
  • You have the resources to make a compelling campaign.

Try something else if…

  • You offer a niche product or service.
  • You don’t have a marketing team.
  • You don’t have the time to spend making a strong campaign.
  • You need working capital.
  • You want funding fast.

Peer-to-peer lenders: Business loan or crowdfunding?

Peer-to-peer (P2P) lenders fall somewhere between a type of business loan provider and a crowdfunding platform. These lenders work like a crowdfunding platform to connect you with investors who want to profit from your business’s interest payments.

But the actual process of applying, getting approved and repaying your loan works more like a business loan. You rarely need to submit a pitch deck or marketing video. And your credit score, time in business and revenue usually matter.

And peer-to-peer business loans typically aren’t as fast as loans from direct online lenders, however, since you often have to wait for investors to fund your loan. With LendingClub, one of the top P2P lenders in the country, the whole process can take several days from the time you’re approved.

Business loans by amount:

Top 10 best business guides

Explore the top business loan guides to help you along your business journey. From information on the best business loans on the market or your best startup loan options, to business loans that require little to no paperwork and more.

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To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.
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Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full bio

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Anna has written 251 Finder guides across topics including:
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Heather Petty was a personal finance writer at Finder, specializing in home and personal loans. After falling victim to a disreputable mortgage broker when buying her first home, she’s on a mission to help readers avoid similar experiences when managing their own finances. A self-proclaimed word nerd, her writing and analysis has been featured on MSN, and MediaFeed, among other top media. Heather previously worked as a technical writer and editor for the casino systems industry and is an internationally published young adult mystery author. She earned a BA in English with a minor in journalism from the University of Nevada, Reno. See full bio

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Heather has written 93 Finder guides across topics including:
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