Compare small business loan interest rates

Find out how business loan interest rates work and how to qualify for some of the lowest rates around.

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SharpShooter Funding Business Loan

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Borrow up to $300,000

  • Borrow from $1,000
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Business loan interest rates are among the most important factors when comparing the cost of small business loans. But it’s hard to know if you’re getting a competitive rate if you don’t know what to expect. Apart from learning how to qualify for low rates, we’ll help you understand how interest rates on business loans work and which other loan-related costs you might want to consider besides the cost of interest.

The typical rate on a small business loan can range from around 5% to 60% APR.

Compare business loan interest rates

Name Product Interest Rate Min. Loan Amount Max. Loan Amount Loan Term Minimum Revenue Min. Credit Score Filter Values
SharpShooter Funding Business Loan
Fee based, Prime pricing starting at 9.00%
$1,000
$300,000
6 months - 5 years
$4,166 /month
500
SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $4,166 in monthly deposits ($50,000/year).
OnDeck Business Loan
8.00% – 29.00%
$5,000
$300,000
6 - 18 months
$10,000 /month
600
OnDeck offers loans up to $300,000 for small business owners working in approved industries who have been in business for at least 6 months with a minimum monthly revenue of $10,000.
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Loan interest rates by lender

You might have known that your revenue, credit score and time in business are all important factors in determining what business loan interest rates you might expect to pay. But the type of loan and lender can also impact the rate you get.

Based on rates alone, term loans are the most competitive type of loan out there — although business loan interest rates can get very high if you borrow from an online lender. Short-term financing options that don’t typically come with interest like merchant cash advances and invoice factoring tend to be more expensive than the competition.

There isn’t much difference between different types of banks. Foreign banks might typically have lower starting rates, although their rates can slightly increase in the end. However, it may be easier to get approved for a business loan at a local bank than at a large national or international bank.

Online lenders tend to offer higher rates than banks. In fact, the maximum rate on all 3 types of bank loans is several percentage points lower than the minimum rate for online lenders.

What’s a good interest rate on a business loan?

There is no one “good rate” for everyone. Good business loan interest rates depend on what type of financing you’re looking for and also what rates you and your business are eligible for. The more of a risk lenders consider you, the higher the rate you’ll qualify for.

Typically, business loans backed by some kind of collateral or personal guarantee have lower rates because they’re less of a risk to the lender — CSBFP loans have decent rates because they’re partly backed by the government.

How long you take to pay back your loan also typically affects the rate. Long-term loans and lines of credit tend to have more competitive rates than short-term business loans because there’s more time for interest to add up. Lenders who offer the lowest rates, like banks, generally only offer long-term loans.

Who qualifies for the lowest rates?

Generally, you’ll need to meet the following requirements to get a competitive rate on a business loan:

SharpShooter Funding Business Loan

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $50,000
  • Free online loan quote
  • Borrow up to $300,000
  • Quick application process

SharpShooter Funding Business Loan

SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $4,166 in monthly deposits ($50,000/year).

  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $300,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $50,000
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5 tips for getting a competitive interest rate

  1. Check your credit.
    While business credit scores exist, business loan providers more commonly rely on personal credit scores more. Check your credit report for mistakes and get a soft credit check online to learn your approximate credit rating.
  2. Give yourself time.
    Often, the loans with the lowest rates take longer than higher-rate loans — just look at the rates on online loans, which sometimes process as quickly as 24 hours, but can come with higher interest rates up to 55% or more.
  3. Revisit your business plan.
    While not all lenders require a business plan, it can be a strong argument for your business. Make sure everything is up to date and tighten the writing to be as concise and impactful as possible.
  4. Back your loan.
    While a personal guarantee can be a big personal risk, providing collateral or a lien on your business’s assets can reassure your lender that you have something at stake.
  5. Know how rates work.
    Some short-term loans come with monthly interest rates as low as 1%. While that might seem like a steal compared to a loan with a 7% annual rate, it’s actually more expensive. Make sure you understand what the rate actually means for each loan before you get into it.

How do small business loan rates work?

It depends on what you mean by “rates.” There are a few different types of small business loan rates you might come across: Interest rates, APR and factor rates. Click “show more” to learn about each one.

What affects my interest rate?

Interest rate is based off your business’s risk to the lender. Smaller businesses with few valuable assets and a small annual turnover will likely pay a higher interest rate than a more established business.

Lenders will determine business loan interest rates by judging each business individually based off a few common markers.

Business loan fees

While rates are an easy way to compare, they can be misleading. Even if you’re comparing a loan’s APR. That’s because it doesn’t tell you when you’ll have to pay that fee. These are some common fees you might run into when you’re taking out a business loan.

FeeTypical rangeWhen it applies
Origination fee2% to 7% of the loan amountWhen your lender disburses your funds, either added to your loan amount or deducted from your funds before you receive them.
Referral feeVariesIf you take out a loan by using a connection service or third party organization.
CSBFP registration fee2% of the total amount of the loanWhen your lender disburses your funds, either added to your loan amount or deducted from your funds before you receive them.
Late feeEither between $5 to $25 or 3% to 5% of your loan amountAfter you’ve missed a payment. Many lenders have a grace period before the late fee applies.
Insufficient funds feeAround $50Whenever your business’s bank account doesn’t have enough funds to cover the payment.

3 factors to compare in addition to interest rate

On top of fees, there are other factors that you might want to consider when considering a loan:

  • Down payments.
    Some business loans require you to make a down payment on the item or project you want to fund — especially equipment, vehicle loans and mortgages. Look for the “loan-to-value ratio” on these types of loans to find out what percentage the lender will cover and what your business needs to pay upfront.
  • Personal guarantee.
    Many unsecured business loans still require a personal guarantee from one or more business owner. A personal guarantee means that you’re responsible for paying back the loan if your business can’t and might require a lien on your personal assets. It might help you get approved, but also makes the loan more risky.
  • Loan term.
    If you’re getting a loan with interest, how long you have to pay back your loan affects your total loan cost just as much as the APR. Longer terms can make your loan more expensive but lower your monthly repayments. To keep down the total cost, try to avoid unnecessarily long loan terms.

Bottom line

There’s no one size fits all rate on a business loan. But knowing the general range of rates you can expect on a type of loan or from a specific lender can help you narrow down lenders. To learn more about how business loans work, check out our guide.

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