A business loan can help you purchase inventory, free up cash flow or even open a site or storefront. And when it comes to choosing a business loan, interest rates are one of the most important factors to consider.
Currently, the average fixed rate for a bank prime term loan is 8.50%. Term loans from traditional banks tend to have the lowest rates – although rates on business loans can range anywhere from 3% to 60% and up, depending on the loan type and lender.
Business loan rates are influenced by the Federal Reserve funds rate. As of April 1, 2024, this rate is 5.33% – the same as March. But it’s one point higher than a year ago, which means business loan rates across the board are still relatively high.
Regardless of the type of loan or financing you’re after, our list of the best lenders offer some of the most competitive rates, low fees and fast approval and funding.
35+ business loan lenders reviewed and rated by our team of experts
12+ types of business loans analyzed
Evaluated under our unbiased rating system covering 10+ categories
20+ years of combined experience covering financial topics
We're big on editorial independence. That means our content, reviews and ratings are fair, accurate and trustworthy. We don't let advertisers or partners sway our opinions. Our financial experts put in the hard work, spending hours researching and analyzing hundreds of products based on data-driven methodologies to find the best accounts and providers for you. Explore our editorial guidelines to see how we work.
Lendio can be a good place to start if you want to save time searching for a lender. Just complete an online form with your information to compare potential lenders that offer a wide range of short- and long-term loans, including term and SBA loans, lines of credit and merchant cash advances. Lendio's network includes more than 75 lenders that cater to a range of credit scores. For credit lines, you might even qualify with a credit score around 600. But you may receive marketing calls and emails from lenders, even after you take out a loan.
Pros
No fee to the borrower
Wide range of financing options
Options for poor credit
Phone support available
Cons
Partners may continue to market to you
Weekly payments may be required on some loans
APRs can run high on some short-term loans
Loan amount
$1,000 – $5,000,000
APR
Starting at 3%
Min. Credit Score
500
Loan term
3 months to 25 years
Requirements
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
Kiva's interest-free microloans are ideal for entrepreneurs looking to turn an idea into reality. It doesn't have any time-in-business requirements, and you can borrow up to $10,000 without paying interest or fees. Borrowers are also granted a six-month grace period before payments are due. But know that Kiva is a nonprofit crowdfunding platform — so if you don't have a large social network willing to contribute, you may not get anything. Loans that aren't fully funded aren't dispersed.
Pros
No interest or fees
No credit or residency requirements
Loans as low as $1,000
Cons
No loans over $10,000
Relies on crowdfunding
Loan amount
$1,000 – $10,000
APR
0%
Loan term
6 months to 3 years
Requirements
Have at least ten friends and family members willing to contribute to your loan, live in the US, ages 18+, not in bankruptcy or foreclosure, not under any liens, not engaged in: multi-level marketing, direct sales, pure financial investing or illegal activities
BlueVine offers lines of credit up to $250,000 and with its low starting APR and lack of fees – it could be a good choice for small businesses that need frequent access to funds. After you're approved, you can pay a $15 wire transfer fee to accelerate your funds in a few hours. Otherwise, withdrawals take one to three business days to process. Its lines of credit are revolving, so you can borrow and repay as needed. But repayments are weekly if you go with the line of credit — which may strain your budget during slow seasonal periods.
Pros
Starting APR compares to banks
Flexible credit and revenue requirements
Funding within 24 hours for a fee
Cons
Weekly repayments on line of credit
High revenue requirements
Not all industries qualify
Loan amount
$5,000 – $250,000
APR
Starting at 6.2%
Min. Credit Score
625
Loan term
6 or 12 months
Requirements
24+ months in business, $40,000+ in monthly revenue, 625+ credit score
OnDeck offers short-term loans and lines of credit to businesses looking for quick funding and who might not qualify for a bank loan. Its line of credit requires very little documentation to apply and funding could be as soon as the same business day. Requirements are in line with other providers, requiring one year in business and $100,000 in annual revenue. And it may accept credit scores as a low 625, so borrowers with fair credit have a shot. There are no prepayment penalties or draw fees on the line of credit (LOC), but repayments may be weekly.
Pros
Low-doc application
Same-day funding may be available
No prepayment or draw fees
Cons
Weekly repayments may be required on LOC
Not available to all industries
Loan amount
$5,000 – $250,000
APR
Average is 60.9%
Min. Credit Score
625
Loan term
3 to 24 months
Requirements
Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account
With factor rates starting at 1.11, Credibly is among the least expensive merchant cash advances out there. It's also more transparent about its rates and fees than similar providers, and you can access your funds as soon as the day you're approved. While its $15,000 monthly minimum revenue requirement is higher than other competitors like Fora Financial, it's not restricted to credit card sales. But like other merchant cash advances, it's still an expensive product.
Pros
Same-day funding available
Requires only 6 months in business
500 credit score requirement
Cons
Doesn't disclose remittance percentage
One-time 2.5% fee added to balance at funding
Admin fee of $50 per month
No advances over $400,000+
Loan amount
$5,000 to $400,000
Starting Factor Rate
1.11
Min. Credit Score
500
Loan Term
3 to 15 months
Requirements
500+ credit score, 6+ months in business, $15,000+ average monthly bank deposits
Bank of America offers a wide range of secured and unsecured loans and lines of credit for most business needs. It even offers business auto loans — which can be hard to find at large banks. This nationwide lender has some of the lowest starting rates for unsecured financing and generous relationship discounts. But, as with most big banks, it can be difficult to qualify – especially if you aren't already a customer. Smaller businesses might have more luck with a community bank or online lender.
Pros
SBA preferred lender
Relationship rate discounts available
Low rates on unsecured loans compared to other banks
Financing program for healthcare practices
Available in all 50 states
Cons
$150 origination fee
Not transparent about maximum APR
Smaller businesses may not qualify
More strict eligibility requirements than other lenders
Loan amount
$10,000 – $100,000
APR
Starting at 7.50%
Min. Credit Score
700
Loan term
12 to 60 months
Requirements
Good credit, 2+ years in business, $100,000+ revenue
If you own a newer business, work in a high-risk industry or have poor credit, United Capital Source could be a helpful stop. It's an alternative business loan connection service that helps borrowers who struggle to qualify for traditional lending options. Search for a business line of credit, merchant cash advance, SBA loan or invoice and receivables factoring. It's cannabis-business friendly, accepts bad credit borrowers and customers give it generally high reviews. You could even qualify if you've been in business for just a few months.
Pros
High-risk industries OK
Compare lenders quickly
Multiple loan types
BBB accredited
Cons
Not a direct lender
Payments may be weekly or daily
Loan amount
$2,000 – $2,000,000
APR
Not stated
Min. Credit Score
550
Loan term
24 months to 25 years
Requirements
550+ credit score, 3+ months in business, $120,000+ annual revenue, business checking account
National Funding offers customized loans directly and with its lending partners. It offers equipment financing and leasing of up to $150,000 for new or used equipment. It guarantees you won't find a lower monthly payment elsewhere, or it pays $1,000 toward the equipment lease. And there's no down payment requirement. National Funding advertises fast approvals and funding in as soon as 24 hours, with early payment discounts and excellent customer reviews.
Pros
Quick funding on new and used equipment financing
No down payment required
Highly rated by customers and BBB
Cons
Low maximum loan amount
Loan amount
Up to $150,000
APR
6% - 14%
Min. Credit Score
600
Requirements
6 months in business and $250,000 in annual sales, business bank account
Loan amount
Up to $150,000
APR
6% - 14%
Min. Credit Score
600
Best for startups
Finance Factory business loans
4.1
★★★★★
Finder score
Finance Factory is an online lender marketplace with multiple financing options for startups. Entrepreneurs can also find services to roll over a retirement account into a new venture and personal loans to fund a new business. While it's not a direct lender, it's uniquely transparent about terms and rates — which are lower than average. But some financing options may require good to excellent credit, and funding can take a few weeks.
Pros
Multiple options for startups
Transparent with rates across products
Award-winning support team
Cons
Not a direct lender
Few options for fair or bad credit
Funding can take weeks
Loan amount
$5,000 – $350,000
APR
0% to 15%
Min. Credit Score
700
Loan term
Up to 7 years
Requirements
600 to 800 credit score, no required years in business or monthly cashflow, though $1,000 to $5,000 monthly is preferred
Loan amount
$5,000 – $350,000
APR
0% to 15%
Min. Credit Score
700
Best for SBA loans
SmartBiz business loans
4.5
★★★★★
Finder score
SmartBiz speeds up the SBA application process by streamlining the information you need to provide. By working with multiple banks and online lenders, it may take just a few weeks to get funding — rather than the normal multimonth waiting period. Prequalification takes a few minutes, and the rates its lenders offer start low. But you'll need to borrow at least $30,000, and the process isn't free: SmartBiz charges a 2% referral fee and 2% packaging fee if you're approved.
Pros
Compare bank and SBA loans
Helps with SBA loan applications
5-minute online application
Highly rated by past customers
Cons
2% referral fee and 2% packaging fee
No SBA loans under $30,000
High starting APR on non-SBA loans
Loan amount
$30,000 – $500,000
APR
Prime Rate, plus 2.75% to 3.75%
Min. Credit Score
650
Loan term
10 years
Requirements
650+ credit score, 2+ years in business, $50,000+ in annual revenue, no bankruptcies or foreclosures in past 3 years
Loan amount
$30,000 – $500,000
APR
Prime Rate, plus 2.75% to 3.75%
Min. Credit Score
650
Methodology: How we choose the best business loans
Our lending experts analyze dozens of business loan providers to determine the best for business owners and startups. We search for lenders that suit a range of lending needs, highly-rated lenders that offer loans of $100,000 or less because most small business loans fall into that range.
We weigh lenders against 12 key metrics:
Rates
Fees
Application process
Lender reputation
Eligibility requirements
Credit score minimums
Products offered
Willingness to work with risky industries
Minimum and maximum loan amounts
Customer service reviews
Funding turnaround times
Extra features
How small business loans work
A business loan is a form of financing designed to help you start, grow or operate your small business, offering access to capital to cover payroll, purchase real estate, invest in equipment or other business needs.
Business loans can be unsecured or secured, which means collateral backs the loan. Even lenders advertising unsecured business loans may require a lien on business assets. You may also be asked for a personal guarantee, which means you’re responsible for the loan if the business fails.
You can find business loans through traditional banks and credit unions, online lenders and marketplaces, and community lenders. While a conventional business loan is a lump sum you repay in monthly installments, plus interest and fees – there are other types of financing that work differently but are still referred to as loans by lenders.
Interest rates vary widely by business loan type, ranging from 3% to 300% APR. Loans secured by collateral like invoices, equipment or real estate tend to have the lowest rates, while short-term financing options like merchant cash advances tend to have the highest rates.
Term loans and lines of credit may be the most popular types of financing. But other options might be better for certain businesses — especially those that struggle to qualify for traditional bank financing.
Covering recurring expenses tied to your business’s cash cycle, picking up the slack during an off-season or paying for ongoing projects where costs are difficult to predict.
Businesses buy heavy machinery and other expensive equipment.
Microloan
Start as low as $500
Small businesses that need financing for basic necessities but can’t qualify for a traditional business loan.
What are the benefits of a small business loan?
There are several benefits to using a small business loan or another type of financing:
Keep control of your business after receiving funds
Get funds to expand operations and meet demand
Cover operating expenses during a slow season
Deduct interest on your business tax returns
How to get the best small business loan
Watch our 60 second video below!
While small business loan requirements depend on the financing you need, you’ll get the lowest rates and strongest terms by meeting general requirements that include:
Good credit. If you don’t have a score of at least 670, consider bringing a cosigner along for better approval odds.
At least $50,000 in revenue. If your business is new or still in the startup phase, look into our top editorial picks for startup business loans.
At least one year in business. One year in business is pretty standard for most business loans. However, startup loans and other types of financing may only require six months or less in business.
A low-risk industry. High-risk industries like adult entertainment, cannabis and gambling may struggle to find financing.
Collateral requirements. If you’re looking for a secured business loan, know what collateral you’ll use to secure it. For example, with equipment financing, the loan is secured by the asset you’re financing.
Personal and business documentation. When applying, lenders ask for tax returns, profit and loss statements and more. Know what you’ll need to have on hand ahead of time.
Don’t meet these requirements? Visit our guide to business loans to learn more about your options. You can also set up an appointment at a local bank. Community banks tend to have more flexible requirements than their larger counterparts. Even if you don’t qualify for financing, the bank can point you toward other options and advise you on strengthening your application. Or, consider a personal loan from a lender like Upstart if you need funding fast.
Prepare to submit personal and business documents when applying for a small business loan, including:
Business and personal tax returns for your business and all owners
Government-issued identification and Employer Identification Number (EIN)
Profit and loss statements and balance sheets for up to three years
Business and personal bank statements
Business plan and future projections
The credit score requirement is typically 670+
What is the largest business loan I can get?
How much of a loan you can qualify for depends on factors like your business’s revenue, debts and what you’re financing. Generally, your loan amount is based on the value of a self-liquidating asset you’re using the funds to purchase.
SBA loan — from $500 to $5,000,000, depending on the program
Lines of credit — highs of $250,000 to $500,000
Equipment financing — value typically equal to the equipment’s value
If you own a newer business, haven’t yet reached $100,000 in revenue or have poor credit, you may not qualify for the lowest rates. Look to other financing options to grow your business.
Personal loans
A personal loan is a common choice for entrepreneurs looking to fund a startup. These loans typically max out at $50,000, though sometimes reach $100,000. The best personal loans require good credit, which is unsuitable for all business owners and needs.
Crowdfunding
You might not need to take on debt or pay anyone back if your business needs to fund a project that’s easy to communicate in a short video. Friends, fans or investors can help you raise money through crowdfunding. But keep up with regulations that are developing around it.
For example, all crowdfunding transactions must be online through a Securities and Exchange Commission (SEC)-registered intermediary. You can’t raise more than $5 million through crowdfunding offerings in a 12-month period, as stated by the US SEC.
Equity investments
You could finance your business needs by bringing on an investor. An investor allows you to get funding for your business that you never have to pay back in exchange for partial ownership in your company. But ensure you have a lawyer on retainer to avoid legal trouble with the SEC.
Business credit cards
For small expenses or working capital, a business credit card can be easier to manage than a loan. Plus, many business credit cards come with 0% APR promotional periods, giving you a window to make a big purchase and pay it off without interest over a few months or a year.
Invoice financing
This alternative type of financing is an advance on unpaid accounts receivables — also called accounts receivable financing. It’s an asset-based loan to help give your business cash flow while you wait for invoices to be paid. However, invoice financing is an advance that can be expensive.
Inventory financing
Got orders but not enough inventory? Inventory financing is a line of credit you use to purchase products, and the inventory is collateral on the loan. However, if you need to buy perishables like produce, you can find financing options for which the merchandise doesn’t secure the loan.
Merchant cash advance
An alternative borrowing option, a merchant cash advance, is a lump sum loan based on a percentage of your business’s card sales. It’s often for emergencies, used to cover expenses in a pinch or during slow seasons. Merchant cash advances don’t charge traditional interest. Instead, you get charged a fee called a factor rate expressed as a decimal — usually between 1.09 and 1.5 — and the factor gets multiplied by the amount borrowed.
This type of financing can get expensive, and many providers require weekly repayments.
Grants and other resources for small businesses
Whether you’re just starting or need help with crafting a business plan, check out these no- or low-cost resources:
Small Business Development Centers — SBDCs are the US’s network of small business development centers, all sharing the goal of helping small businesses grow. With over 1,000 local centers, SBDCs offer no-cost consulting to assist entrepreneurs in starting or expanding a business.
USA.gov — Search for grants, training programs and financing options through this government site.
Federal grants for tech businesses — Tech-centered companies may be eligible for the Small Business Innovation Research (SBIR) or Business Technology Transfer (SBTT) program grant. Each grant is suited for tech businesses or those with scientific research.
Local grants — State and local governments often have small business centers with information about grants and other resources.
How to manage payments
Business owners may not be strangers to debt. But if you’re looking to take on your first business loan or you’re struggling to manage multiple credit lines, keep these tips in mind:
Autopay. Sign up for autopay to avoid missing payments. As a bonus, many lenders offer rate discounts if you enroll in autopay, often around 0.25%.
Keep your lender in the loop. Even when things are going great, stay in contact with your lender because they may offer new products and prefer lending to businesses with existing relationships.
Ask about hardship programs. Hard times can fall on anyone. If you can’t repay your loan, even temporarily, contact your lender and ask about a hardship program or deferment plan. Lenders often offer deferment options rather than have you default.
Only borrow when you need it. Don’t be tempted to take on a larger loan simply because it’s offered, and ensure the loans you take on will be beneficial.
Consider consolidating if you have multiple loans. If you have multiple loans or high interest rates, you could consolidate your business debt for a lower rate and more manageable payments — if your business is in a strong financial situation with good credit.
How business debt consolidation works
Debt consolidation works by paying off one or more loans with a new loan, usually to save on interest charges. Most business debt consolidation loans are term loans, but it’s also common to consolidate debt with a low-rate credit card, such as a balance transfer credit card. You can also consolidate business debt with a personal debt consolidation loan or home equity loan, though you’ll be responsible for repayment if the business fails.
Debt consolidation might be wise if you have good credit and high-interest debt. But if you have poor credit and your company isn’t profitable, your business isn’t likely to qualify for a low rate on the consolidation loan. Even if you do, it may not save you money in the long run.
FAQs
Can I get a business loan with bad credit?
Yes, it’s possible to get a business loan with bad credit. Some lenders – especially online lenders – will accept scores as low as 500 on certain short-term loans, like merchant cash advances. And other financing options, like invoice financing or factoring, may not consider your credit score at all. As long as you can show sufficient revenue or invoice value, you could qualify. But rates can often run high on these types of bad credit business loans and are best used in a cash crunch.
What is the largest business loan I can get?
How much of a loan you can qualify for depends on factors like your business’s revenue, debts and what you’re financing. Generally, your loan amount is based on the value of a self-liquidating asset you’re using the funds to purchase.
SBA loan — from $500 to $5,000,000, depending on the program
Lines of credit — highs of $250,000 to $500,000
Equipment financing — value typically equal to the equipment’s value
Can I get a business loan with self-employment income?
Many banks and credit unions offer loans to the self-employed, including business loans. But your odds might be better with an online lender. If you’ve exhausted these options, consider applying to the US Small Business Administration (SBA).
The following SBA loans are available to sole proprietors or independent contractors:
SBA microloan, which offers up to $50,000 in funding
SBA express loan, which offers up to $500,000 in funding
SBA 7(a) loan, which offers up to $5 million in funding
Different SBA loans come with varied eligibility requirements. To qualify for an SBA loan, you must typically have a 680 FICO score, operate your for-profit business in the US, and have exhausted all other funding options.
Can I get a business loan for my startup business?
Startup loans for brand new businesses with no track record are hard to come by. Most lenders want to see at least six months in business and a certain level of revenue. This presents a catch-22 if you haven’t earned anything yet.
Instead, you could look into getting a personal loan to fund a new business or borrow against your assets, like your home or 401(K) – but these options come with financial risks. If you’re more entrepreneurial, consider a microlender like Kiva, an angel investor or a crowdfunding campaign.
How does business debt consolidation work?
Debt consolidation works by paying off one or more loans with a new loan, usually to save on interest charges. Most business debt consolidation loans are term loans, but it’s also common to consolidate debt with a low-rate credit card. You can also consolidate business debt with a personal debt consolidation loan or home equity loan, though you’ll be responsible for repayment if the business fails.
Debt consolidation might be wise if you have good credit and high-interest debt. But if you have poor credit and your company isn’t profitable, your business isn’t likely to qualify for a low rate on the consolidation loan. Even if you do, it may not save you money in the long run.
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.
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.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
