The 13 Best Commercial Lenders

The Ultimate Guide on Commercial Lenders

Where can a business owner even begin their hunt for a small business loans?

If you were searching for financing say, 10 years ago, we’re willing to bet that you’d start at the bank.

But these days, traditional finance institutions aren’t the only players in the game.

There are more alternative and online commercial lenders in the market than ever before—meaning small business owners have a long list of commercial lenders, or business loan providers, to pursue.

Here are the top commercial lenders to consider:

For SBA loans:

Medium-Term Loans:

Short-Term Loans:

Equipment Financing

Invoice Financing

Line of Credit

Merchant Cash Advance

What Are Alternative Commercial Lenders?

These days, it’s tough to discuss commercial lenders without alternative lending coming up into conversation. Alternative lending means online, non-bank commercial lenders.

For small business owners today, securing financing from a bank is difficult, because many banks see small businesses as a risky investment, and only want to lend to the best-of-the-best borrowers. Plus, commercial banks say that lending to small businesses takes as much time and effort as lending to bigger, more established businesses—but with a smaller payoff.

And after the 2008 recession, banks started giving even fewer business loans to small business owners in need of capital. The decrease in funding from these commercial lenders left many small business owners in need of financing. Fortunately, a new type of lender stepped in to fill this market need.

Alternative commercial lenders entered the space to provide easier access to business financing. These commercial lenders still give out term loans and lines of credit like banks do, but they also offer small businesses new loan products—like invoice financing, equipment loans, or small business startup loans.

The 13 Best Commercial Lenders

Now that you understand what traditional and alternative lenders are, let’s look at some lender options for your small business.

We’ll start by familiarizing you with the different commercial loan types. Then, we’ll offer up a few different commercial lenders for each type of financing.

Let’s get started.


SBA Loans

SBA loans are traditional term loans guaranteed by the government.

By guaranteeing a portion of these loans, the Small Business Administration (SBA) minimizes risk for commercial lenders—and gives business owners access to better loans than they’d otherwise qualify for. You can expect the following ranges of terms with SBA loans:

Loan Amounts: $5,000 to $5 million
Loan Term: Five to 25 years
Interest Rates: Starting at 5%
Speed: As little as 30 days

The SBA has three types of commercial lending programs: the SBA 7(a) program, the CDC/504 program, and the SBA microloan program. Each of these commercial loans has their own distinct terms and uses.

While SBA loans can be easier to qualify for than traditional term loans from a bank, the bar is still high. You need to have strong credit and a profitable business to qualify for the 7(a) or 504 loans. The microloan program has lower requirements but you still need to demonstrate sufficient cash flow.

If you’re trying to get an SBA loan, consider these commercial lenders:

  • Wells Fargo Bank

    Wells Fargo SBA lending offers the low rates, long repayment terms, and large loan amounts that small businesses expect from SBA loans. But they’ll also be tough to secure—Wells Fargo SBA loans are typically only available to the most qualified small business borrowers.

    Through Wells Fargo, you can secure 7(a), 504, and Express loans (which fund more quickly). Depending on the loan product and your business qualifications, amounts go up to $6.5 million with repayment terms up to 25 years and interest rates starting at 6%.

  • BayFirst

    BayFirst is one of the most active SBA lenders in the country. Through BayFirst, you can acquire an SBA 7(a) or 504 loan with amounts up to $5 million.

    However, this Florida-based lender typically focuses on lower loan amounts in the $350,000 range.

Medium-Term Loans

With a traditional term loan, or what we sometimes call a medium-term loan, you’ll be given a lump sum of capital to meet your financing needs. You’ll pay your lender back, plus interest, over a set repayment period. Term loans will typically carry the following ranges of terms:

Loan Amounts: $25,000 to $500,000
Loan Term: One to five years
Interest Rates: 7% to 30%
Speed: As little as two days

If you need a pretty large amount of capital—to meet a variety of financing needs—and you have time to wait for your small business loan, a medium-term loan is a great option for you.

You’ll need to meet commercial lenders’ minimum standards ($75,000 in revenue, 620 credit score, and one year in business), but if you do, you’ll score a loan with a long term and low interest rate.

Here are good commercial lenders for medium-term loans:

  • Fundation

    Fundation offers term loans with one- to four-year terms. Their interest rates start at 7.99% and can go up to 28.99%. They’ll typically charge an origination fee of about 3% as well.

    With Fundation, you’ll have a bi-monthly payment schedule, which will provide a nice middle-ground between weekly and monthly payments.

  • OnDeck Capital

    OnDeck Capital offers short-term loan amounts up to $250,000 with repayment terms up to 24 months. Interest rates start at 27.2% (based on loans originated in the half-year ending March 31, 2024; minimums provided are rates that at least 5% of customers received).

    To qualify for an OnDeck Capital loan, you’ll need annual revenues north of $100,000, a 625+ personal credit score, and at least one year of business history.

Short-Term Loans

Short-term loans are like medium-tern loans, but with shorter repayment terms.

As a result of their short repayment terms, short-term loans will come with less ideal terms, which will usually fall within the following ranges:

Loan Amounts: $2,500 to $250,000
Loan Term: Three to 18 months
Interest Rates: 14% and up
Speed: As little as two days

If you just need a small amount of capital—and you don’t have the time to wait around for it—short-term loans are great financing solutions.

As a business loan for bad credit, a short-term loan is a good option for business owners who don’t qualify for a lot of other financing solutions.

  • LoanBuilder, a PayPal Service

    PayPal’s short-term product—LoanBuilder—has terms ranging from three to 12 months. Depending on your term, your factor rate could be as low as 1.025.

    Unlike many other short-term loan options that collect daily payments, this commercial lender only collects weekly payments. As a result, the LoanBuilder product won’t cut into your business’s daily cash flow as severely.

Equipment Financing

If you need capital to finance the purchase of an expensive piece of equipment, then equipment financing is a perfect option for you.

With an equipment loan, you can finance up to 100% of the equipment you’re buying, and that financing will carry the following terms:

Loan Amounts: Up to 100% of the equipment value
Loan Term: The expected life of the equipment
Interest Rates: 8% to 30%
Speed: As little as two days

If you don’t have the cash on hand to pay for your business’s equipment upfront, this can be an ideal solution.

Plus, equipment loans are collateralized by the equipment itself, which makes them easier loan products for small business owners to qualify for.

  • Currency Capital

    Currency Capital isn’t a commercial lender in a technical sense. Instead, they offer a marketplace for businesses to shop their options for equipment leasing. They help connect small business owners with 100 top lenders that will help them finance big equipment purchases at ideal rates.

    To qualify for equipment financing from Currency Capital, you’ll need $120,000 in annual business revenue and a 620 personal credit score.

  • Funding Circle

    The alternative lender Funding Circle offers equipment financing at rates starting as low as 5%. To qualify, you’ll need a minimum credit score of 620 and two years of business history on the books.

Invoice Financing

If you’re always waiting on your customers to pay your invoices, you should consider invoice financing.

With invoice financing, commercial lenders can advance you cash for your outstanding invoices right away with the following terms:

Loan Amounts: About 50% to 90% of the total invoice amount
Loan Repayment: Typically until your customers pay their invoice
Factor Fees: About 3% plus an additional weekly percentage until invoice is paid
Speed: As little as one day

Invoice financing is a great option for business owners who suffer from cash flow shortages when their customers are slow to pay.

Remember, though, these commercial lenders will collect fees on the remaining part of your invoice value they hold in reserve, meaning you won’t get back the full amount you’re owed by your customers.

  • Fundbox

    Fundbox will advance you 100% of the outstanding invoice amount. You’ll then pay them back over a 12- or 24-week period.

    And if you’re able to pay Fundbox back sooner, they’ll waive your remaining fees. One huge perk of working with Fundbox is that you don’t have to wait for your clients to pay off the invoices. But before you agree to invoice financing with Fundbox, make sure that you have the funds to repay in full in the short 12-week period.

    Fundbox also integrates with many leading account programs, making their process very straightforward. When you’ve integrated your software with Fundbox, you can select the invoice you want to finance and see the repayment structure and fees before you complete the transaction. If you decide to go ahead with Fundbox, you’ll get the funds in your account the next business day.

Business Line of Credit

With a business line of credit, you’re given access to a pool of funds that you can draw on whenever you want or need to. You’ll only pay interest on what you draw, and once you’ve paid in full, your credit line goes back to its original amount. Here are the terms that business lines of credit typically come with:

Loan Amounts: $10,000 to over $1 million
Loan Term: Six months to five years
Interest Rates: 7% to 25%
Speed: As little as two days

A line of credit is one of the most flexible loan products out there for small business owners—they can just sit there in your back pocket, available for you to use whenever.

  • OnDeck Capital

    Along with medium-term loans, OnDeck also provides a good line of credit product. With an OnDeck line of credit, you can secure a loan up to $100,000 on a 12-month term with APRs starting at 35.9% (based on loans originated in the half-year ending March 31, 2024; minimums provided are rates that at least 5% of customers received).

    To qualify, you need $100,000 in business revenue, a 625 personal credit score, and one year in business.

Merchant Cash Advance

With a merchant cash advance, commercial lenders will advance you cash to meet your financing needs.

You’ll pay merchant cash advance companies back by offering them a slice of your daily credit or debit card sales. Merchant cash advances will usually come with the following ranges of terms:

Advance Amounts: $2,500 to $250,000
Repayment: Automatically deducted each day through your merchant account
Factor Fee: 1.14 to 1.18
Speed: One week

Merchant cash advances are attractive to business owners who don’t qualify for other loan products and need capital quickly. But as far as small business loans go, merchant cash advances are expensive loan products. For this reason, they really should only be considered as a last resort.

  • CAN Capital

    CAN Capital offers merchant cash advances ranging between $2,500 and $250,000 with daily, automatic payments and funding within three days.

    Factor rates on a CAN Capital MCA product range from 1.15 to 1.48. There’s also a $395 administrative fee to set up your account.

  • Rapid Finance

    A slightly cheaper alternative to CAN Capital is Rapid Finance, which offers MCAs up to $1 million with factor rates ranging between 1.16 to 1.30.

    To qualify, your business must have been operating for at least one year and make at least $5,000 per month in revenue.

Old vs. New Commercial Lenders: Key Differences

Now that we’ve given you a variety of different traditional and alternative commercial lenders to choose from, you might be wondering what the difference is, and how do you know which one to work with.

While both alternative and traditional commercial lenders can provide small business loans, there are definitely some marked differences.

Allow us to explain.

  • Speed

    Bank loans can take months to fund. Alternative lenders are mostly online, so these commercial lenders can give you the capital you need in days.

  • Choice

    In general, alternative commercial lenders offer small business owners more choice on the kind of financing they use for their business.

  • Cost

    Commercial banks don’t lend to risky borrowers, which means they can afford to charge a lower interest rate on their loans.

    On the other hand, alternative lenders lend to borrowers that may not have a lot of business history, have a less-than-stellar credit score, or both. To make sure they don’t lose all their money in the event that you default on your loan, alternative lenders will charge higher interest rates—which means more expensive loans.

  • Accessibility

    Bank loans can take a lot of time and effort to apply to, and after you apply, there’s a good chance you’ll get denied. Alternative commercial lenders offer full loan applications that can take as little as 30 minutes to complete.

What Does This Mean for Your Commercial Lender Search?

Alternative commercial lenders haven’t totally out-competed big banks—commercial banks are still the most common place a business owner will look for a loan.

But, by opening up credit for small business owners who need financing, these alternative commercial lenders play a valuable role in the lending industry.

And when you add the two types of lending together, you get a long list of commercial lenders that can meet your financing needs.

The Bottom Line

As you can now tell, whatever your business needs, there’s a commercial lender out there who can provide it.

Now that you know what all your options are, all you need to do is apply. It’s in your best interest to apply to several lenders so you can compare terms and find the best solution for your business.

Handling all those business loan applications on your own can be a huge time commitment; however, if you work with an online marketplace like Fundera, one application is all it takes to see your loan options. Plus, our loan specialists will walk you through the process, let you know what documentation is required, and will help you compare your offers.

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Priyanka Prakash, JD
Senior Contributing Writer at Fundera

Priyanka Prakash, JD

Priyanka Prakash is a senior contributing writer at Fundera.

Priyanka specializes in small business finance, credit, law, and insurance, helping businesses owners navigate complicated concepts and decisions. Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small business financial and legal concerns. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.

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