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Updated Jul 18, 2024

Best Business Loans for 2024

Every business needs funding, but choosing the right loan is key. You can’t go wrong financing with these reputable lenders.

Mike Berner
Written By: Mike BernerBusiness Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Comparing Loan Options
Businessloans.com
Businessloans.com logo
  • Loans from $5,001 to $3 million
  • One to 20-year repayment
  • No minimum credit score
USALinks to Businessloans.com
See Offers
  • Loans from $5,001 to $3 million
  • One to 20-year repayment
  • No minimum credit score
Best for Marketplace Lending
Biz2Credit
biz2credit business loan green and black logo
  • Loans up to $6 million
  • 12 to 36 months repayment
  • 660 credit score
USALinks to Biz2Credit
See Offers
  • Loans up to $6 million
  • 12 to 36 months repayment
  • 660 credit score
Best for Line of Credit
Fundbox
Fundbox company logo
  • Loans up to $150,000
  • 12 – 24 weeks repayment
  • 600 credit score
USALinks to Fundbox
See Offers
  • Loans up to $150,000
  • 12 – 24 weeks repayment
  • 600 credit score
Best for Flexible Terms
SBG Funding
SBG Funding company logo
  • Loans from $500 to $10 million
  • Flexible repayment
  • 500 credit score
USALinks to SBG Funding
See Offers
  • Loans from $500 to $10 million
  • Flexible repayment
  • 500 credit score
Best for Fast Funding
Rapid Finance
Rapid Finance logo
  • Variety of loan types and terms
  • Approval within hours
  • Same-day funding
USALinks to Rapid Finance
See Offers
  • Variety of loan types and terms
  • Approval within hours
  • Same-day funding

Table of Contents

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At Business News Daily, we’ve spent years researching and testing the financial tools and services entrepreneurs need to manage their money and grow their businesses. Our team of small business finance specialists conducts independent evaluations of leading financial service providers to determine which provide the most value. We also regularly consult with finance experts, including accountants, bookkeepers, payroll managers, payment experts and tax professionals, to stay on top of the latest finance trends impacting small businesses. And every review we publish is evaluated by our editorial staff to ensure objectivity, accuracy and fairness are at the core of our decision-making. Learn more about our editorial guidelines.

How We Decided

To find the best business loans and lenders, our team of small business finance experts examined the market to identify the best rates, the fastest approvals and the most efficient application processes. Our research covered direct lenders and lending marketplaces, as well as alternative lenders that provided financing options like invoice factoring and equipment...

Read MoreRead More

To find the best business loans and lenders, our team of small business finance experts examined the market to identify the best rates, the fastest approvals and the most efficient application processes. Our research covered direct lenders and lending marketplaces, as well as alternative lenders that provided financing options like invoice factoring and equipment financing. We met with these lenders and asked detailed questions about their application processes, borrower requirements, approval and funding timelines, and interest rates. We also looked at reviews from real-life borrowers to see how well these lenders lived up to their promises.

38

considered

19

reviewed

5

selected

To find the best business loans and lenders, our team of small business finance experts examined the market to identify the best rates, the fastest approvals and the most efficient application processes. Our research covered direct lenders and lending marketplaces, as well as alternative lenders that provided financing options like invoice factoring and equipment financing. We met with these lenders and asked detailed questions about their application processes, borrower requirements, approval and funding timelines, and interest rates. We also looked at reviews from real-life borrowers to see how well these lenders lived up to their promises.

38

considered

19

reviewed

5

selected

Unless you have stellar credit and a booming business that’s been around for a while, securing a traditional business loan can be tough. That’s where the best business loan companies we examined in our reviews come in. These lenders, such as BusinessLoans.com and Fundbox, are typically willing to work with borrowers that traditional banks may turn down for business financing.

These lenders offer a wide range of financing options, including working capital loans, merchant cash advances, equipment financing, invoice factoring and term loans. Many alternative lenders also make it easy to get financing with online applications and same-day funding.

We researched the options to help you find the best business loan for your needs. Below are the best loan companies that offer financing for a wide range of businesses and use cases.

Compare Our Best Picks

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Our Top Picks for 2024
Businessloans.com
Biz2Credit
Fundbox
SBG Funding
Rapid Finance
Rating9.2/107.5/107.5/109.8/109.5/10
Best for

Comparing loan options

Marketplace lending

Lines of credit

Flexible terms

Fast funding

Loan amount

$5,001 to $3 million

Up to $6 million

Up to $150,000

Up to $10 million

$500 to $10 million

Repayment terms

One to 20 years

12 to 36 months

12 to 24 weeks

Six months to 10 years

Varies

Funding speed

24 hours to one week

24 to 72 hours

Next business day

24 to 72 hours

Same day

Minimum requirements

$100,000 in annual revenue, no minimum credit score, one to six months in business

$250,000 in annual sales, 660 credit score, 18 months in business

$100,000 in annual revenue, 600 credit score, six months in business

$250,000 in annual revenue, 500 credit score, six months in business

500 credit score, 3 months in business

Review Link
Scroll Table

Our Reviews

Businessloans.com logo
  • Funding Amount: $5,001 to $3 million
  • Loans Offered: Term loan, merchant cash advance, invoice factoring, working capital loan, line of credit, equipment financing
  • Application requirements: $100,000 in annual revenue, no minimum credit score, one to six months in business.
Editor's Rating: 9.2/10
See Offers

Why We Chose BusinessLoans.com

BusinessLoans.com is a relative newcomer on our list, launched in 2020 to streamline the loan application process and seamlessly connect borrowers with the best loans for them. The platform excels at welcoming borrowers with minimal knowledge about or prior experience with business loans. The company is known to work with any borrower to get them the funding they need — even borrowers who don’t meet the qualification criteria.

Applying for BusinessLoans.com funding is straightforward. You’ll provide about a dozen data points that you should almost certainly know offhand. The process shouldn’t take more than three minutes. The BusinessLoans.com algorithm will match you with lending partners that best fit your needs. The company works with over 35 lenders, so your likelihood of finding a lender is high.

We like that BusinessLoans.com is committed to demystifying loans and making them work for any borrower. The company will teach you how to effectively compare loans while providing hands-on assistance. This is why BusinessLoans.com is our top pick for comparing loan options.

Businessloans.com application

BusinessLoans.com has a simple application process that is easy to understand. (Source: BusinessLoans.com)

BusinessLoans.com Rates and Fees

Funding Type Rates
Term Loan Starting at 9% APR
Merchant Cash Advance (MCA) 20-40% payback on loan amount
Invoice Factoring 2-4.5% charge for any unpaid invoices
Working Capital Loan 8-25% APR
Line of Credit $150 account fee

BusinessLoans.com Pros

  • BusinessLoans.com helps borrowers who are unfamiliar with the lending space understand and compare loans.
  • Applying for BusinessLoans.com funding is straightforward.
  • After a simple, quick application, you’ll receive assistance in comparing your loan options and choosing the best one for your circumstances.

BusinessLoans.com Cons

  • Collateral is required for most loans.
  • You might wait as long as one week for funding. This is several days longer than you’d wait with many other lenders on this list.
  • BusinessLoans.com doesn’t provide all information about loan rates and amounts.

BusinessLoans.com User Scores

Trust Pilot: 4.9/5

“This is my second loan with Business Loans. Simple, Fast, Seamless and same day funding,” one user wrote.

Learn more about BusinessLoans.com in our complete review.

biz2credit business loan green and black logo
  • Funding Amount: Up to $6 million
  • Loans Offered: Term loans, working capital loans. ERTC loans, commercial real estate loans
  • Application requirements: $250,000 in annual sales, 660 credit score, 18 months in business
Editor's Rating: 7.5/10
See Offers

Why We Chose Biz2Credit

We selected Biz2Credit as the best choice for marketplace lending because the company has a long track record of arranging small business loans and works with a network of lending partners to find you the best financing option. Since its founding, Biz2Credit has leveraged its network to fund more than $7 billion in small business loans.

We also like Biz2Credit’s multiple loan options. You can apply for a term loan, a working capital loan or a commercial real estate loan. Rates start at 7.99% and depend on your credit score. The better your credit, the lower your interest rate. Biz2Credit charges simple interest — another unique feature we like that many business lenders don’t offer. Simple interest is calculated based on the principal balance each month. In contrast, compounding interest is calculated based on the principal balance plus any outstanding interest already accrued, which raises the loan costs. Biz2Credit offers an additional discount if you connect your business checking account.

Biz2Credit application

We appreciate that applying for Biz2Credit is a simple four-step process. Source: Biz2Credit

Biz2Credit Rates and Fees

Biz2Credit offers term loans with interest rates as low as 7.99%, but the rate varies depending on your creditworthiness. Keep in mind there’s also a $250 to $400 underwriting fee on top of any closing costs.

Biz2Credit Pros

  • Biz2Credit offers various business financing options at competitive rates.
  • Its funding specialists match you with loans that best meet your needs.
  • Not many vendors offer ERTC loans.

Biz2Credit Cons

  • Biz2Credit has tougher eligibility requirements than other lenders we considered.
  • Repayment periods for term loans only extend to 36 months.
  • Detailed rates and terms aren’t readily available for all loan types.

Biz2Credit User Scores

Trust Pilot: 4.6/5

“Partnering with Biz2Credit was one of the most seamless, efficient and customer-friendly experiences I’ve ever had with a lender,” one user wrote.

Learn more about Biz2Credit in our complete review.

Fundbox company logo
  • Funding Amount: Up to $150,000
  • Loan Offered: Line of credit only.
  • Application requirements: $100,000 in annual revenue, 600 credit score, six months in business.
Editor's Rating: 7.5/10
See Offers

Why We Chose Fundbox

We recommend Fundbox as the best lender for lines of credit because it has competitive rates and transparent pricing. When you get a line of credit from Fundbox, you’ll know exactly what the cost will be before you finalize the transaction. This helps you make informed decisions, and not many lenders offer this much transparency. We also like that Fundbox makes repayment easy with weekly installments through its Flex Pay program. Some business owners may prefer monthly payments, but paying weekly means smaller chunks come out of your cash flow.

Fundbox goes beyond lending when supporting its customers. Another feature that stood out to us is its integration with popular programs that many businesses already use. The lender integrates with Freshbooks, QuickBooks and Zoho, three of the best business accounting software platforms.

Fundbox calculator

Fundbox has a line of credit calculator that makes it easy to see how much you would pay over a 12- or 24-week timeframe. (Source: Fundbox)

Fundbox Rates and Fees

Fundbox can extend up to $150,000 in credit, with repayment terms of 12 or 24 weeks and a starting interest rate of 4.66%.

Fundbox Pros

  • With a Fundbox line of credit, you know exactly how much you’ll pay before drawing any funds.
  • This lender provides lines of credit as high as $150,000 and can fund your account 24 hours after approval.
  • Fundbox provides a mobile app.

Fundbox Cons

  • To qualify for a line of credit, you must be an established business bringing in at least $100,000 in sales.
  • Fundbox doesn’t offer other types of loans other than a business line of credit.
  • Repayment terms only stretch to 24 weeks.

Fundbox User Scores

Trust Pilot: 4.4/5

“Fundbox has by far one of the best products for small business owners. The flexibility is amazing! FLEXPAY is like no other product on the market,” one user wrote.

SBG Funding company logo
  • Funding Amount: Up to $10 million
  • Loans Offered: Term loans, bridge loans, line of credit, equipment financing, invoice financing, SBA loans
  • Application requirements: $250,000 in annual revenue, 500 credit score, six months in business
Editor's Rating: 9.8/10
See Offers

Why We Chose SBG Funding?

Whether you need short-, medium-, or long-term funding, SBG Funding has an option for you. We like that SBG Funding’s loan terms can be as short as six months or as long as 10 years.

SBG Funding’s flexibility doesn’t end with its terms. You can borrow as much as $10 million, depending on the loan type. That allows you to grow with the lender. You may need a $10,000 short-term loan to start with, but later need a loan to buy a $1 million piece of equipment. SBG Funding can support that growth with its loan product, which is why it’s worth serious consideration if you’re looking for a flexible lender.

SBG Funding is also willing to work with borrowers who have credit issues. It can make a qualifying decision in 24 hours and get funding to you the same day in some cases. However, SBG Funding requires more documentation to approve a loan than most other business lenders we reviewed. That may dissuade some borrowers. But with competitive rates, flexible terms and loans of up to $10 million, the extra effort may be worthwhile.

SBG Funding application

SBG Funding’s application process is worth the time. Source: SBG Funding

SBG Funding Rates and Fees

Funding Type Rates Funding Amount Loan terms
Term Loan Starts at 1.75% per month Up to $5 million 1 – 5 years
Bridge Loan Starts at 1.92% per month Up to $1 million 6 – 24 months
Line of Credit Starts at 1.75% per month Up to $150,000 6 – 24 months
Equipment Financing Avg. 3.75% per month Up to 100% of equipment cost 1 – 7 years
Invoice Financing Starts at 0.25% per week Up to 90% of invoices N/A (flexible payment options)
SBA 7(a) Loan Not specified Up to $10 million 2 – 10 years

SBG Funding Pros

  • SBG Funding provides fast funding on loans as high as $10 million.
  • Small business owners receive favorable pricing and flexible terms.
  • SBG Funding is more transparent with its loan rates and terms.

SBG Funding Cons

  • SBG Funding requires a lot of documentation when you apply for a loan.
  • Applicants must have over $10,000 in monthly sales.
  • Determining APR can be difficult because SBG only advertises its monthly rates.

SBG Funding User Scores

Trust Pilot: 5/5

“The business money arrived when they said it would, even earlier. Thank you. I look forward to working with you in the future for my business needs,” one user wrote.

Learn more about SBG Funding in our complete review.

Rapid Finance logo
  • Funding Amount: $500 to $10 million
  • Funding Types: Term loans, merchant cash advances, lines of credit, invoice factoring, SBA loans, bridge loans, asset-backed loans and commercial real estate loans
  • Application requirements: 500 credit score, 3 months in business
Editor's Rating: 9.5/10
See Offers

Why We Chose Rapid Finance

Rapid Finance is true to its name, delivering fast funding to approved loan applicants. We like that both approval and funding can occur within hours, which is much faster than most lenders we reviewed. Rapid Finance offers merchant cash advances of up to $500,000. You repay your loans by giving Rapid Finance a fixed percentage of future credit card transactions.

To apply with Rapid Finance, you must provide a government-issued photo ID, a business tax ID, your business’s checking routing and account numbers, and the last three months of your company’s bank account statements. The application can be completed online in about 15 minutes if your documentation is readily accessible.

Rapid Finance funding options

Rapid Finance offers a variety of funding options. (Source: Rapid Finance)

Rapid Finance Rates and Fees

Rapid Finance doesn’t advertise rates and fees upfront; loan details depend on the specific product you choose.

Rapid Finance Pros

  • Rapid Finance has an easy online application, quick approval times and same-day funding.
  • Rapid Finance offers various loan options and flexible repayment terms.
  • Many of the platform’s loans don’t require collateral.

Rapid Finance Cons

  • If you have a low credit score, the interest rate Rapid Finance charges may make the loan too expensive.
  • Rapid Finance requires at least two years in business for term loans.
  • The company doesn’t post its rates and terms publicly.

Rapid Finance User Scores

Trustpilot: 4.2/5

“The team paid attention to my needs and expectations and they were very professional during the entire process,” one user wrote.

Learn more about Rapid Finance in our complete review.

Alternatives to Consider

Fora Financial

Fora Financial offers business loans up to $1.4 million for short-term needs, with flexible repayment plans and potential discounts for early payback. We like their relaxed requirements, including a minimum of 6 months in business, $12,000 in sales, and a credit score of 500. Additionally, you won’t need any collateral and can easily track your loan progress through their online portal.

Noble Funding

Noble Funding stands out for its commitment to transparency and customer service. They offer competitive rates and terms for various loan options, with a focus on in-person assistance and zero hidden fees. We were also impressed that customers consistently praise their service on independent review sites.

If you’re looking for long-term financing, Noble has loans up to $500,000 and bridge loans exceeding $4 million for short-term needs. While they don’t require collateral, a credit score of at least 650 is needed to qualify.

Balboa Capital

Balboa Capital is known for its fast and streamlined application process, allowing you to apply and potentially receive funding within minutes – all online. We appreciate that they avoid excessive paperwork and hidden fees, making them an attractive option for businesses seeking a hassle-free approval process.  In addition to standard business loans, Balboa Capital offers niche financing solutions, including options for franchises and vendor financing programs.

Crest Capital

Crest Capital specializes in equipment financing for businesses, offering loans between $5,000 and $500,000 with fast funding and competitive rates. They can finance up to 100% of the equipment cost, including installation fees. For equipment under $250,000, a simple online application is all that’s required. For borrowers seeking equipment financing, Crest Capital is our best pick.

Accion

Accion Opportunity Fund is a non-profit lender dedicated to supporting small businesses that might struggle to get traditional funding. They offer loans from $500 to $150,000 and are willing to work with businesses with less-than-perfect credit.  Their commitment to helping underserved markets like women-owned, minority-owned, and startup businesses makes them a unique resource. Accion even offers microloans and financing options for food and beverage businesses, often excluded from traditional lending. Term loan rates start as low as 5.99%.

Choosing a Business Loan Provider

When seeking a loan, you must understand the ins and outs of the lending process, the lender’s qualification requirements, and loan terms to secure the capital you need without compromising your business’s future. As you compare various lenders, consider the following elements to ensure you choose the right loan.

Loan Application Ease

While you evaluate lenders, ask how long or detailed the application process is. Your lender will collect information about your business income and debts and use that to assess your ability to repay the loan. Some lenders require a lot of paperwork, while others don’t, depending on the loan size and term length.

If you need money quickly, select a lender with an online application and relaxed requirements about necessary documentation. Speed up the approval process by having certain documents ready, including your business’s tax returns, bank statements, financials, articles of incorporation and franchise agreements.

Did You Know?Did you know

Many online lenders offer educational tools to help you understand common business loan mistakes that may be holding you back from securing a business loan.

Interest Rate

Small business loans accrue interest, which is the price you pay for a loan. Rates are either fixed or variable. Generally, alternative lenders offer a fixed interest rate. Your interest rate will depend on the lender you partner with; your business’s financials, credit score and years in business; and your personal financial history. It is important to weigh the cost of the loan against the benefits of borrowing. If the cost does not make sense for your needs, seek a lower-cost alternative.

Rules and Requirements

Lenders charge business borrowers money to access capital. That includes interest, an origination fee and other charges such as maintenance and late payments. Pay attention to the annual percentage rate (APR). That tells you the full cost of the loan, including fees.

The size of the loan also impacts how much interest you’ll pay. The loan term is the amount of time you have to repay the loan. Loan contract terms can range from as short as a few weeks to as long as several years.

Qualifying Criteria

Depending on the loan type and lender, the qualifications for approval vary. Most lenders look at your business and personal credit score, years in business, annual sales, and business plan. Lenders don’t want to lose money and will scrutinize you and your business to ensure you can repay the loan.

TipTip

To build business credit, ensure your business’s legal structure is established, register the business with your secretary of state, and get your EIN (employer identification number).

Collateral

Business collateral is an asset you pledge to secure your loan. If you can’t repay the loan, you forfeit the collateral to the lender. Collateral can be your building (if you own it), equipment, accounts receivables, property, or something else of value. Lenders offering secured loans require the business owner to put up a certain amount of collateral. Unsecured business loans do not require collateral.

Many lenders also require a personal guarantee, a binding legal document in which you pledge to personally pay back the loan if your business can’t. If the debt is nondischargeable and you file personal bankruptcy, you’re still obligated to repay the loan.

Funding Speed

It is important to know when you’ll have the loan funds in your bank account so you can plan accordingly and avoid a cash crunch for payroll or other business operating expenses. Some alternative lenders can fund your loan the same day you’re approved, while others take a few business days.

Paperwork

Some lenders require you to provide additional documentation, such as tax returns, photo ID, bank and credit processing statements, or a voided check. Each lender has specific requirements.

Key TakeawayKey takeaway

There is much to consider when applying for a small business loan, such as costs and terms. The more information you have before shopping for a loan, the better prepared you’ll be to make a good choice and properly manage your business’s finances.

What Type of Business Loan Is Best for Your Small Business?

There are many business loan options aside from traditional bank loans. The one that makes the most sense for you depends on your credit score, time in business, and the amount you’re looking to borrow. Funding speed and specific terms will vary from one product to the next. With that in mind, here’s a look at the small business financing options available to you.

SBA Loans

U.S. Small Business Administration loans are processed by lenders and banks. These low-interest loans are intended to help owners expand their businesses (e.g., buy a business, land or equipment) or recover after a natural disaster. The maximum amount you can receive from an SBA loan is $5.5 million.

There are four specific types of SBA loans.

  • SBA 7(a) loans: These are a good option for working capital, debt consolidation or buying equipment for your enterprise. You can borrow up to $5 million. SBA 7(a) loans feature a variable interest rate tied to the prime rate. Collateral is required.
  • SBA 504 loans: This loan type also has a cap of $5 million, with rare extensions to $5.5 million for manufacturing or energy-efficient projects. Many business owners use a 504 loan to purchase machinery or land. SBA 504 loans cannot be used for working capital or inventory. Interest rates are typically fixed and are based on five- and 10-year U.S. Treasury bond rates. No collateral is required.
  • Microloans: Microloans can be used for working capital and to purchase supplies, equipment or fixtures, and furniture. Rates vary from 6% to 9%. Loans are available from community-based nonprofits; the maximum amount you can borrow is $50,000.
  • Disaster loans: In case of emergency, disaster loans offer borrowers up to $2 million. They are designed specifically for small business owners who must rebuild after a natural disaster or global crisis. In late 2022, the SBA announced it would waive interest on disaster loans during the first 12 months. After that, the interest rate for for-profit businesses will be 3.04%.
Did You Know?Did you know

SBA loans are in high demand — the agency issued over 62,000 7(a), 504, and microloans in 2022. But an SBA loan may not be right for you, which is why it’s important to consider all loan types.

Term Loans

With a term loan, you get a lump sum and must repay it in installments over a set period. Term loans have different repayment schedules depending on your business needs.

  • Long-term loans: These loans have terms of at least six years. They are typically used for big purchases, such as company vehicles or property.
  • Medium-term loans: These loans have terms ranging from two to five years. They’re commonly used to purchase business equipment or to fund expansion.
  • Short-term loans: These loans have terms of less than two years. They are typically used to purchase inventory, fill cash flow gaps for working capital, or meet other short-term cash needs.

Lines of Credit

Lines of credit, or LOCs, give business owners quick access to capital. There are no rules for how the money can be used, and you only pay interest on the money you draw. The lender determines the loan size and interest rate. Many LOC loans have qualification requirements such as a minimum annual revenue, the length of time your company has been in business, and minimum credit scores of 500 or higher.

Merchant Cash Advance

With a merchant cash advance, the lender offers merchants an advance in exchange for future credit card sales. You get access to cash quickly and must repay the advance daily via a percentage of your credit card sales.

Did You Know?Did you know

Small business loans and cash advances differ. Advances are best for short-term needs, while loans are preferable for borrowers with the time and credit to obtain them.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending is a loan from another business owner or individual investor interested in financing your business. This cuts out the need for banks. These loans have drawbacks and are not allowed in all states.

Unsecured and Secured Loans

An unsecured business loan doesn’t require you to put up collateral. However, you must have good credit to qualify. A secured loan requires collateral, including an asset, equipment, accounts receivable or real estate property.

Equipment Financing

Equipment financing occurs when a business owner takes out a loan to pay for equipment. The collateral is the equipment you are financing. Most business owners can get approved thanks to the collateral component.

TipTip

If you don’t have the cash or desire to purchase equipment outright, consider leasing equipment.

Invoice Financing

With invoice financing, business owners receive an advance on unpaid invoices. This financing is also called accounts receivable financing. Invoicing companies can advance you as much as 80% of the value of your unpaid invoices. You receive the final 20%, minus any fees when the invoices are paid.

Alternative Loans

Alternative lenders are another small business financing option. These nonbank lenders provide loans to business borrowers. They’re typically more flexible than banks and have a quicker application process and funding time. The approval requirements are usually more relaxed than those of a bank. Any financing outside of a bank is considered an alternative loan.

Key TakeawayKey takeaway

Business owners have many options for accessing capital, all with varying costs and terms. SBA loans, term loans, lines of credit, equipment financing, private funding and alternative lending are popular options.

To find the best business loan providers, our team of financial experts meticulously combed through an initial pool of 38 potential lenders. After a rigorous narrowing process, we identified 19 top contenders for further examination. These finalists were then evaluated across 19 key criteria reflecting the priorities of business owners seeking financing. Ultimately, we selected five for inclusion on our list.

We grouped these criteria into weighted categories, which we evaluated based on what is typically most important to a business owner when selecting a business loan. Here’s how we made our decisions.

  • Rates and fees: (30%): Our team meticulously compared interest rates, origination fees, and any additional charges to identify the most budget-friendly lenders. We also looked carefully for hidden fees to ensure that there are no surprises. This empowers you to secure the capital you need without sacrificing your financial well-being.
  • Loan types (25%): We prioritized the variety and adaptability of loan products on offer. This includes analyzing loan types (term loans, lines of credit, equipment loans), loan amounts available, and repayment terms. We ensured a diverse range of options exists to meet the specific needs of your business.
  • Ease of application (20%): We evaluated the eligibility requirements and application process for each lender. This analysis considers factors like minimum credit score, time in business, and revenue requirements. Additionally, we assessed the application process itself, ensuring that it’s streamlined and efficient.
  • Customer service: (15%): Because unforeseen situations can arise, we looked closely at the customer service offered by each lender. This included assessing phone support availability, online resources, and the responsiveness of customer service representatives. We also checked out customer testimonials on user review sites.
  • Expert analysis (10%): Our recommendations were also informed by the insights of our in-house business and finance experts. Their years of experience and analysis ensure that the providers on our list make financial sense.

Evaluating these factors helped us identify not only trustworthy business loan options, but also how each lender best fits specific business needs. We recognized that some lenders excel at certain loan types or cater to particular company sizes. This analysis led to the “Best For” categories you see on this page, ensuring you can easily find the loan that aligns perfectly with your business goals.

To learn more about our methodology, see our full editorial process.

Business Loan FAQs

Several types of SBA loans are available for business owners. Three of the most common include SBA 7(a) loans, SBA 504 loans and microloans, which we discussed in this article. The SBA 7(a) loan is ideal for small to midsize businesses, with low interest rates and long repayment terms. The 504 loan is well-suited for purchasing real estate or paying for construction or renovations. Finally, microloans are best for very small businesses that must offset startup or early expansion costs, because these loans are capped at $50,000.

The interest rates on SBA 7(a) loans are typically variable, though they can occasionally be fixed rate. SBA 504 loans and microloans are fixed rate.

If you’re a startup, your company doesn’t have a financial history. Instead of evaluating your business’s credit, lenders will check your personal credit. This is a common lender practice, especially for new business owners. Sometimes looking at your personal credit is the only option lenders have.

The minimum credit score you need to qualify for a business loan ranges from 500 to 640 or higher. The requirements depend on the type of loan you’re seeking and your lender.

For an SBA Express loan or SBA 7(a) loan, borrowers need a score of at least 600 or 640, respectively. If you’re interested in the SBA CAPLines program or an SBA export loan, you need a credit score of at least 660. SBA CDC/504 loans require a minimum score of 680, and for an SBA microloan, a score of at least 620 to 640 is preferred.

Online lenders often have more flexible requirements. Some provide loans to those with credit scores between 500 and 550. However, if your credit score is that low, you will likely pay higher interest rates.

Acceptable collateral varies. In general, anything valuable can be used. Common types of collateral for business loans are equipment, vehicles, real estate, inventory and accounts receivables. Some lenders may require you to offer personal collateral not tied to your business. This could include vehicles, real estate and cash in the bank.

You can apply by searching for lenders approved by the SBA. Armed with that list, comparison shop and apply directly on the lenders’ websites or through their mobile apps.

An easier option is to use the SBA’s Lender Match tool, which connects borrowers with SBA lenders. Answer a series of questions, which the SBA says takes five minutes. Two days later, you’ll receive an email with offers from lenders. It’s up to you to pick the lender, but once you’ve settled on one, you apply directly with it. (The SBA’s Lender Match tool is not for its disaster relief loans and assistance.)

An installment loan is financing you use to pay for equipment or property over a set period. Unlike a credit card, which gives you a revolving line of credit, loan payments are fixed over the loan’s term. Once you pay off the loan, the debt is settled. Interest rates on installment loans are typically lower than credit card interest rates, but more risk is involved. If you can’t repay the loan, the lender claims your collateral.

Installment loans are common for purchasing property, expensive equipment, business vehicles or other high-priced items. You can also use an installment loan to fund your startup. If you want the loan for this purpose, you’ll need good credit, collateral, a sound business plan and a willingness to sign a personal guarantee.

What to Expect in 2024

Credit availability and rising interest rates are two major themes for business loans in 2024. Over the last two years, the U.S. Federal Reserve significantly raised its benchmark interest rates. The WSJ Prime Rate, an index of prime rates from 30 major banks, has ballooned to 8.5%, which remains unchanged from the same period in 2023.

Over the last few months, inflation readings have fallen to the mid-3 percent range. More recently, the central bank has paused its rate hike campaign, and many analysts believe that rates are at or near a peak. Federal Reserve Chair Jay Powell has publicly indicated that rates could fall somewhat in 2024. For now, policymakers are holding interest rates at elevated levels and assessing the impact on the economy.

The good news for businesses in need is that many lenders are still approving small business loans at high rates. A down economy and rising inflation may leave many small business owners looking for additional funding. Alternative lenders are ready to meet that demand, and it also appears that the SBA will have more money to lend in 2024.

Additionally, artificial intelligence and machine learning are reducing loan approval wait times and increasing the speed with which funds are deposited into business owners’ bank accounts. Credit scores still matter, but lenders are increasingly scrutinizing other aspects of a business owner’s finances to ascertain their creditworthiness. Altogether, these changes are designed to make getting a small business loan easier and faster in 2023.

In response to rising inflation, the SBA has expanded its size standards for what is considered a small business. That means more businesses are now eligible for SBA loans and federal contracts.

Mike Berner
Written By: Mike BernerBusiness Operations Insider and Senior Analyst
Mike Berner is a finance expert who spent more than half a decade serving as an economic analyst for the U.S. Army Corps of Engineers. He is experienced in conducting quantitative analysis and research to guide clients and companies through changes in the financial markets. With a bachelor's degree in economics and a bachelor of business administration in finance, Mike is adept at breaking down the complex financial topics that affect business owners, from business loans and accounting to payroll and credit card processing. He also tests and analyzes the latest financial software solutions and enjoys giving tips on matters ranging from tax forms to sales strategies to investing through platforms like YouTube, TikTok and Substack.
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