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Compare the Best Small Business Loans Options of 2020

See Your Loan Options

Explore the top small business loans and lenders and find the right fit for your business’s needs.

At some point in the lifecycle of your business, you’ll need access to financing—whether to cover cash flow, expand your team, buy a new location, purchase equipment, or for a different purpose altogether. Small business loans can offer you the capital you need to run and grow your business.

Traditionally, business loans were only available from established banks, which, although offering the best rates and terms, also require lengthy processes and the highest qualifications—making it difficult for many small business applicants to get the funding they need. Today, however, between banks, government-guaranteed loans, and alternative, online lenders, there are now more options than ever for small businesses to get access to capital—including everything from term loans to lines of credit to asset-based financing.

You can use this guide to learn more about the top lenders and best business loan products, as well as find out how to apply for and get a business loan.

Best Lenders for SBA Loans

Five Star Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • SBA loans can meet a variety of financing needs
  • Five Star is a preferred SBA lending partner; top 100 SBA lending partners in the U.S.
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

Five Star Bank is a preferred SBA lending partner, offering SBA 7(a) loans. Although the application process will be more detailed and take more time than that of online lenders, Five Star Bank can offer SBA loans with some of the best rates and terms available. These loans can be used for a variety of purposes and are well-suited for established, highly qualified businesses who are looking for long-term financing.

Loan Amount: $25,000 - $350,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 685

Min. Annual Revenue: $100,000

Min. Time in Business: Two years

Celtic Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • Celtic Bank offers SBA loans to borrowers across the U.S.
  • One of the top SBA lending partners in the U.S.
  • SBA loans can meet a variety of financing needs
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

Celtic Bank is a preferred SBA lender—in fact, they’re one of the top SBA lending partners in the U.S. Celtic Bank offers SBA 7(a) loans—with some of the most competitive rates and terms on the market. You can use an SBA loan from Celtic Bank to meet a variety of long-term financing needs, including purchasing equipment, inventory, or even acquiring another business. With high requirements and a lengthy application process, these loans are best for qualified, established businesses who don’t have an immediate funding need.

Learn more about SBA loans from Celtic Bank.

Loan Amount: $25,000 - $150,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 640

Min. Annual Revenue: $100,000

Min. Time in Business: Two years

First Home Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • SBA loans can meet a variety of financing needs
  • First Home Bank is a top-15 SBA lending partner in the U.S.
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

A top-15 SBA lending partner, First Home Bank offers SBA 7(a) loans. With these SBA loans, you can access some of the best rates and terms of any business financing product on the market. SBA loans from First Home can be used for a variety of purposes and can accommodate a range of long-term financing needs. However, you’ll have to meet high requirements to qualify for an SBA loan from First Home Bank, and therefore, these loans are well-suited for established businesses with strong finances.

Loan Amount: $25,000 - $350,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 650

Min. Annual Revenue: $100,000

Min. Time in Business: Two years


Best Lenders for Online Term Loans

OnDeck Capital

Pros
  • Simple and fast one-page application
  • No prepayment penalty
  • Prepayment discount on interest owed if you pay back the loan early
  • Builds business credit but doesn’t affect personal credit
Cons
  • Requires UCC-1 lien and personal guarantee
  • Can be expensive on higher end of interest rate range
  • Requires daily or weekly payments

OnDeck is an online lender that provides fast, short-term financing in amounts up to $500,000. Short-term loans from OnDeck are great for covering big, unexpected expenses and can be used for virtually any purpose. OnDeck’s loan application can be completed quickly and easily online and they can fund businesses in as little as one day. Plus, unlike many alternative lenders, OnDeck offers a prepayment discount on your interest-owed if you pay back your loan early.

Learn more about OnDeck.

Loan Amount: $5,000 to $500,000

Est. Rates: 9.99% to 99%

Terms: Three to 36 months

Fees: Origination fee of 0% to 4%

Time to Fund: As fast as one business day

Min. Credit Score: 600

Min. Annual Revenue: $250,000

Min. Time in Business: Three years

Funding Circle

Pros
  • Low interest rates and long terms for an online lender
  • Monthly payment schedule
  • No prepayment penalty; can save on interest by paying early
  • Can build business credit but won’t affect personal credit
  • No minimum revenue requirement
Cons
  • Requires blanket lien and personal guarantee
  • High eligibility requirements for an online lender
  • Origination fee can reach 6.99%
  • Not as fast to fund as some online lenders

Funding Circle is a peer-to-peer lending program that offers medium-term loans with affordable rates and a simple online application process. Funding Circle is a great option for established businesses who need longer-term financing for large purchases or expenses. In this way, Funding Circle is a faster, yet affordable, alternative to bank loans. Funding Circle term loans are also worthwhile for qualified business owners looking to consolidate existing business debt.

Learn more about Funding Circle.

Loan Amount: $25,000 - $500,000

Est. Rates: 11.67% to 36% APR

Terms: Six months to five years

Fees: Origination fee between 3.49% and 6.99% of approved loan amount

Time to Fund: As fast as two days

Min. Credit Score: 660

Min. Annual Revenue: No minimum

Min. Time in Business: Two years

BlueVine

Pros
  • Startup and newer businesses can qualify
  • No origination or other fees
  • No prepayment penalty
  • Once approved, can receive funds in as fast as a few hours
Cons
  • Requires UCC-1 lien and personal guarantee
  • Weekly payment schedule
  • Can be expensive on higher end of interest rate range

BlueVine is an online lender that offers short-term loans with a fast and fully digitized application and underwriting process. Term loans from BlueVine are worthwhile for business owners looking to fulfill a specific, short-term financing need—as well as for newer businesses. With their speed and flexible requirements, BlueVine short-term loans are also good for businesses who can’t qualify for traditional bank term loans.

Learn more about BlueVine.

Loan Amount: $5,000 to $250,000

Est. Rates: 4.8% to 51%

Terms: Six or 12 months

Fees: No origination or other fees

Time to Fund: Average of two to seven business days

Min. Credit Score: 600

Min. Annual Revenue: $100,000

Min. Time in Business: Six months


Best Lenders for Lines of Credit

PNC Bank

Pros
  • Revolving line of credit with minimum monthly payment requirements
  • Low interest rates
  • No fees
  • Can be used for any business purpose
  • Fast funding time, especially for a bank product
Cons
  • High credit score and time in business requirements
  • Personal guarantee required

One of the largest banks in the U.S., PNC Bank offers a number of business financing products, including a flexible and affordable unsecured line of credit. PNC Bank lines of credit are great for highly qualified business owners who are looking for financing to fill cash flow gaps, meet working capital needs, or have on-hand in case of emergencies. Although the application process may not be as intuitive as some online lenders, PNC can make you an offer as fast as one day—plus, you can make an initial draw on your credit line while completing the online checkout process with PNC.

Learn more about PNC Bank.

Loan Amount: $10,000 to $100,000

Est. Rates: Variable rate of Prime + 7.49% or 9.49%

Terms: Revolving line of credit that functions like a credit card

Fees: No origination, draw, or annual fees

Time to Fund: As fast as two days

Min. Credit Score: 680

Min. Annual Revenue: $100,000

Min. Time in Business: Three years

OnDeck

Pros
  • Revolving line of credit
  • No prepayment penalty
  • Builds business credit but doesn’t affect personal credit
  • Instant funding when you draw on your credit line for no extra fee
Cons
  • Weekly payment schedule
  • Personal guarantee required
  • Can be expensive on higher end of interest rate range

OnDeck is an online lender that offers short-term, flexible revolving lines of credit. OnDeck’s one-page application makes it quick and easy to apply for a line of credit and you can receive funding as fast as one business day. Short-term lines of credit from OnDeck are great for business owners who need to stabilize cash flow or cover other working capital needs. Plus, OnDeck offers instant funding on their lines of credit for no additional cost—meaning you can access your funds within minutes after drawing on your credit line.

Learn more about OnDeck lines of credit.

Loan Amount: $6,000 to $100,000

Est. Rates: 13.99% to 63% APR

Terms: 12 months

Fees: $20 monthly maintenance fee

Time to Fund: As fast as one business day

Min. Credit Score: 600

Min. Annual Revenue: $250,000

Min. Time in Business: Three years

Fundbox

Pros
  • Flexible requirements; great for newer and less-qualified businesses
  • Fundbox will waive remaining fees if you pay your balance in full before the term end
  • No origination, maintenance, or termination fees
  • Fast, automated process based on business checking account or accounting software information
Cons
  • Very short-terms with weekly payment schedule
  • Higher interest rates than other line of credit products
  • Credit line only available up to $100,000

Fundbox offers short-term lines of credit with one of the most automated application processes on the market. To apply for a line of credit through Fundbox, you simply have to sign up for an account and connect your business checking account or accounting software. Fundbox can give you a credit decision in minutes and fund you within one day. Fundbox lines of credit are great for business owners who need to cover a cash flow gap—especially those with lower credit scores or limited time in business.

Learn more about Fundbox.

Loan Amount: $1,000 to $100,000

Est. Rates: Starts at 4.66% of draw amount

Terms: 12 or 24 weeks

Fees: No additional fees

Time to Fund: As fast as one day

Min. Credit Score: 500

Min. Annual Revenue: $50,000

Min. Time in Business: Three months


Best Lenders for Equipment Financing

Balboa Capital

Pros
  • Flexible requirements and competitive terms
  • Offers a corporation-only guarantee option instead of a personal guarantee
  • Monthly or quarterly payments on equipment financing
Cons
  • Combination of equipment financing and leasing—you don’t own the equipment until it’s paid off
  • Requires hard credit pull
  • Up to 2% origination fee

Although Balboa Capital offers a few types of funding, they’re best-known for their equipment financing. Balboa can provide fast, long-term equipment financing with competitive rates. Plus, Balboa has flexible qualification requirements and a simple application process. Equipment financing from Balboa is a great option for businesses looking to purchase a piece of equipment—especially if you want to avoid signing a personal guarantee.

Learn more about Balboa Capital.

Loan Amount: Up to $250,000

Est. Rates: 4% to 25%

Terms: Two to six years

Fees: Origination fee of up to 2%

Time to Fund: As fast as three days

Min. Credit Score: 600

Min. Annual Revenue: $100,000

Min. Time in Business: One year


Best Lenders for Invoice Financing

Bluevine

Pros
  • Flexible credit and time in business requirements
  • Customers pay to your BlueVine account, allowing you to maintain that relationship
  • No minimum volume or termination fees; fund as many or as few invoices as you’d like
Cons
  • You’re responsible for paying BlueVine if customers don’t pay
  • If customers don’t pay on-time, weekly fees can get expensive

With invoice financing through BlueVine, you can receive an advance of up to 90% of the amount of your outstanding invoices. Applying for invoice financing with BlueVine is quick and easy—and BlueVine will evaluate the creditworthiness of your customers when considering your application. BlueVine invoice financing is great for B2B businesses who have capital tied up in outstanding invoices and are waiting longer than one week for their customers to pay. This product can help stabilize your cash flow—plus, if your customers pay on-time, this financing will be all the more affordable for you.

Learn more about BlueVine.

Loan Amount: Up to $5 million

Est. Rates: 0.25% to 1.7% per week

Terms: One to 13 weeks

Fees: No additional fees

Time to Fund: Average of two to seven business days

Min. Credit Score: 530

Min. Annual Revenue: $120,000

Min. Time in Business: Three months


Summary of Best Small Business Loans

LenderBest forEst. Interest RatesMin. Credit Score
Five Star BarSBA loansVariable based on the Prime Rate685
Celtic BankSBA loansVariable based on the Prime Rate640
First Home BankSBA loansVariable based on the Prime Rate650
OnDeckOnline term loans9.99% to 99%600
Funding CircleOnline term loans11.67% to 36% APR660
BlueVineOnline term loans4.8% to 51%600
PNC BankLines of creditVariable rate of Prime + 7.49% or 9.49%680
OnDeckLines of credit13.99% to 63% APR600
FundboxLines of creditStarts at 4.66% of draw amount500
Balboa CapitalEquipment financing4% to 25%600
BlueVineInvoice financing0.25% to 1.7% per week530

Explore the Top Loan Products Available

SBA Loan

SBA loans are government-guaranteed term loans. The guarantee allows SBA lenders to offer low-interest rate loans to business owners who might not qualify for a bank loan.

Maximum Loan Amount

$5K - $5M

Term

5 - 25 years

Interest Rates

Starting at 6%

Speed

As fast as 2 weeks

See if you qualify

Business Term Loan

Just like with a traditional bank loan, with a traditional term business loan, you are lent a lump sum amount upfront, which you pay back (along with fees) over a set period of time.

Maximum Loan Amount

$25K to $500K

Term

1 - 5 years

Interest Rates

7 - 30%

Speed

As fast as 2 days

See if you qualify

Business Line of Credit

With a business line of credit, you can borrow up to a maximum credit limit and only pay interest on the amount of capital that you borrow from your credit line.

Maximum Loan Amount

$10K to over $1M

Term

3 months to 2 years

Interest Rates

7% - 25%

Speed

Under 24 hours (in some cases)

See if you qualify

Invoice Financing

Invoice financing lets you sell invoices to a lender, who fronts you a portion of the invoice amount. The remaining percent (usually 20%) is held until the invoice is paid.

Maximum Advance Amount

Up to 100% of invoice value

Term

Until the customer pays the invoice

Factor Fee

Approx. 3% + %/wk outstanding

Speed

As little as 1 day

See if you qualify

Startup Business Loan

Startup loans offer newer businesses capital to grow. Business credit cards, lines of credit, and equipment loans are great startup loans if you have strong personal credit.

Maximum Loan Amount

$150K

Term

6 months to 4 years

Interest Rates

7.9 - 19.9%

Speed

As fast as 2 weeks

See if you qualify

Equipment Financing

With equipment financing, the lender will front you cash to help purchase the equipment outright. You then pay back the total amount lent, plus fees, for a set period of time.

Maximum Loan Amount

Up to 100% of equipment value

Term

Expected life of equipment

Interest Rates

8 - 30%

Speed

As fast as 2 days

See if you qualify

Short-Term Business Loan

With a short-term small business loan, you are lent a set amount of capital upfront, which you quickly pay back (along with fees) over a short period of time.

Maximum Loan Amount

$2.5K - $250K

Term

3 to 18 months

Interest Rates

Starting at 10%

Speed

As fast as 1 day

See if you qualify

Merchant Cash Advance

With merchant cash advances, a financing company fronts you a lump sum of capital, which you repay (plus their fee) with a set percentage of your daily credit card sales.

Maximum Advance Amount

$2.5K - $250K

Term

Paid daily via your merchant account

Factor Fee

1.14 - 1.18

Time to Funding

As little as 2 days

See if you qualify

How to Get a Business Loan

You may feel overwhelmed by the process of actually applying and getting the business financing that’s right for you. After all, even though you probably have some idea of what type of financing you need and what you’re going to use it for, it’s not always simple to figure out how to get a business loan.

There are a variety of lenders you can work with—both traditional banks and alternative lenders—and each will offer unique products with different rates and terms, as well as have their own application process, with specific qualifications and requirements that need to be completed.

Using an Online Marketplace

Luckily, you can make this process simpler by working with an online marketplace, like Fundera. Instead of having to go lender by lender—evaluating each of them in terms of their products, rates, and application processes—with an online marketplace, you can access the top small business lenders in one place. In this way, you can easily compare your options and apply to the best lenders that will be able to offer you the funding you need.

Plus, if you’re unsure of what type of business loan is right for your business, or have questions about qualifications, individual applications, or timelines, you can work with a loan specialist, for free. This loan specialist will be able to walk you through your eligibility, loan options, and offers—once you’ve gone through the application process.

In fact, with an online marketplace, you can submit a few pieces of basic information and in just a few minutes see what small business loan options you might qualify for—without paying any fees or impacting your credit score. After receiving these options, you’ll then be able to make a decision about what will be best for your business and start the process of actually applying for a loan.

Business Loan Requirements

Ultimately, although the business loan requirements, as well as the application process, will largely be specific to the lender and the product you’re applying for, there are some important pieces of information you can keep in mind before you get started.

First, in order to qualify for a small business loan, there are a few requirements that lenders will almost always look at—time in business, personal credit score, and annual revenue. Generally, the longer you’ve been in business, the stronger your credit score, and the higher your annual revenue, the more likely you are to qualify for a loan—and one with the most desirable rates and terms.

Overall, if you have at least two years in business, a personal credit score of 700 or above, and strong financials, you’ll want to see if you can qualify for a traditional bank loan, which will offer the best rates and terms. If you can’t qualify for a bank loan, then you’ll want to look into other options—SBA loans, online term loans, business lines of credit, etc.

However, even if you don’t have the most ideal qualifications that doesn’t mean you won’t be able to get a business loan. As an example, a business owner with lower qualifications may still qualify for asset-based financing, as lenders are more likely to consider your collateral over the more traditional requirements.

Business Loan Application Process

With this in mind, to actually apply for a business loan, you’ll need to provide a variety of business and personal documents—the specifics of which, again, will depend on the lender. On the whole, however, you can expect to provide:

  • Basic business information such as a loan purpose statement, business tax ID number, and business plan
  • Business financial information including your credit score, financial statements, and tax returns
  • Personal information such as your ID, credit score, and personal tax returns

Again, if you work with an online loan marketplace like Fundera, you’ll be able to take advantage of the expertise of a loan specialist who can help you through this process—gathering the required documents, completing the application, and reviewing the offers you receive—to choose the one that’s best for your business. You’ll want to compare multiple products and even multiple offers to ensure that you’re getting the best small business loan possible to meet your financing needs.

How Fundera Makes Money

At this point, you might be wondering: How does an online marketplace like Fundera make money?

At Fundera, we only make money when you get the financial product you need. Essentially, this means that we receive a referral fee from the financial provider once you’re approved and have taken the product. This being said, as a partner to your business, we’ll never hesitate to recommend you toward a better solution, even if we don’t have a relationship with the financial provider. Ultimately, Fundera first and foremost exists to help small business owners make smarter financial decisions—whether that’s getting you the best offer available in our marketplace, or pointing you in the right direction for a better alternative.

You can learn more about Fundera’s editorial independence and how we make money here. If you have any questions about our editorial process, please don’t hesitate to contact us at content@fundera.com.

Frequently Asked Questions About Applying for a Small Business Loan

1. How can small businesses affected by the coronavirus outbreak get a loan?

To help small businesses affected by the coronavirus outbreak, President Trump announced that he instructed the SBA to extend low-cost capital to business owners through the Economic Disaster Injury Loan program. For up-to-date information on loans available for business owners affected by the coronavirus pandemic, you can refer to our guide here.

Business owners can also apply for other affordable loan products within the SBA loan programs now.

Additionally, individual states and cities are implementing financial measures to support small businesses, so you’ll want to check with your local business authority to see if there are options available for your business.

2. How do you qualify for a business loan?

Ultimately, the requirements you need to meet to qualify for a business loan will largely depend on the individual lender you’re working with and the specific loan product you’re applying for. Overall, however, lenders will likely first look at three metrics to determine whether or not you qualify—your personal credit score, your annual revenue, and your time in business.

Generally, the better your personal credit, stronger your annual revenue, and longer your time in business, the more likely you are to qualify for a small business loan—and one with the most desirable rates and terms. This being said, even if your qualifications aren’t ideal, there may still be options for you to consider. You can learn more about bad credit business loans here.

3. Is there a minimum credit score for business loan eligibility?

Lenders require different minimum credit scores for loan eligibility. Generally, however, you need around the following minimum credit scores to be approved for each type of loan: SBA loan: 640+, bank loan: 640+ but the higher the better, short-term loan from an alternative lender: 550+, equipment financing: 600+, invoice financing: not always required, but when it is, around 600.

All of this being said, to qualify for business loans with the best rates and terms, you’ll want to have a credit score of around 700. Learn more about business loan requirements here.

4. Is it hard to get a business loan?

There’s no single factor that determines how easy or difficult it is to get a business loan. On the whole, your business’s qualifications will dictate how hard it is to get a loan. If you have good credit, a few years in business, and a strong annual revenue, it shouldn’t be hard for you to qualify for an affordable loan. On the other hand, however, if you have poor credit, haven’t been in business long, and have low annual revenue, you’ll find it more difficult to get a small business loan.

Additionally, the type of small business loan you’re applying for will play a role in how hard it is to get. Generally, bank loans—which require top qualifications and lengthier processes—will be more difficult to get than other products, like invoice financing or a short-term loan. SBA and bank loans also offer the best rates and terms, whereas loans that are easier to qualify for will likely be more expensive.

Learn more about some of the easiest business loans to get here.

5. What is the fastest and easiest way to get a business loan?

There are some small business loan types that require minimal paperwork and can be funded in less than 24 hours. However, fast capital usually means more expensive capital. Although fast business loans are good options if you need funding quickly, we recommend giving yourself a period of time to shop to ensure you’re getting the best rate you can qualify for. If you do need funding fast, learn about the best quick business loan options here.

6. I have terrible credit. Can I still get a business loan?

There may still be financing options available to you even if you don’t have the best credit.

If you work with Fundera, we can perform a soft credit pull (that won’t affect your score) to determine what your credit score is and if there are lenders in our marketplace that you can work with. We can also offer tips and advice to help you improve your credit score to qualify for better loan products in the future.

7. How much is a small business loan?

A small business loan from an online lender can be as much as $500,000 in loan amount with interest rates as low as around 7%. However, small business loan amounts can go as low as $2,500, and interest rates can skyrocket to around 80%. SBA and bank loans typically offer the largest amounts. SBA loans, for example, can reach as high as $5 million in loan amount.

Ultimately, the amount of financing you qualify for and the amount it costs really depends on what type of business loan you’re applying to, and how qualified your business is.

8. What kinds of loans and rates can I get?

There is no one-size-fits-all answer for this. Every business is different and there are going to be a variety of factors that affect your eligibility. Generally, the longer you’ve been in business, the higher your personal credit score, and the more revenue you have means you’ll be able to access larger loan amounts and lower interest rates.

This being said, if you submit your business information through Fundera’s application, we can help you shop and compare your loan options—so that you know you’re getting the best possible product available to your business.

9. Is Fundera a lender?

Fundera is a marketplace and not a direct lender. We do not fund businesses nor underwrite loans. As a marketplace, we help you compare your loan options and connect you with the lenders best-suited for your business. We also simplify and expedite your loan search process by providing critical knowledge and expertise to ensure you have everything you need to get the best small business loan.

10. Will applying affect my personal credit score?

Fundera uses a soft credit pull to see which lenders are the best match for your business, so this will not affect your credit score. Once you’re going through the actual business loan application process, some of our lenders may perform hard pulls on your credit, but these tend to happen at the final stages of the process, when you are reviewing or accepting offers.

11. How do I know my financial information will be safe?

In order to work with some of the lenders we have relationships with, we have to be audited and pass inspection. Although we are not a bank, we have invested heavily to not only meet partner requirements, but also ensure our customers’ information is as secure as possible.

Editor's note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

Last Updated: April 06, 2020