Best Business Loans

Zina Kumok Personal Finance Writer

Best Money evaluated multiple business loan providers based on criteria such as loan type and purpose, interest rates, fees, eligibility requirements, and more. Keep reading to explore more about our best business loans in 2024, including details on funding ranges, credit scores, and annual revenue.

Our Best Small Business Loans of 2024

1. Biz2Credit: Our Best for Short-term Loans
2. Lendio: Our Best for Equipment and Startup Loans
3. OnDeck: Our Best for Small Business Loan Servicer Overall
4. Bank of America: Our Best for Those Who Also Want Branch Access
5. American Express Business Line of Credit: Our Best for Lines of Credit 
6. Funding Circle: Our Best for Quick Approvals
7. LendingTree: Our Best for Comparing Lenders
8. Wells Fargo: Our Best for SBA Loans 
9. Revenued: Our Best for Fast Funding
10. Lendzi: Our Best for Borrowers with Low to No credit

Methodology: How We Reviewed the Best Small Business Loans

We carefully reviewed top business loan providers, focusing on real experiences, critical financial metrics, industry insights, and customer feedback.

Using the following evaluation criteria, we aim to provide a comprehensive and unbiased comparison of the best business loan providers, ensuring you have all the information needed to choose the right financial partner for your business. 

• Minimum & maximum loan amounts: We assessed each provider's loan range to ensure they can accommodate various business sizes and financial needs.
• Loan terms: We evaluated the flexibility and length of loan terms as well as repayment options. 
• Required credit score: We looked into credit score requirements, which helps gauge the accessibility of loans for businesses with different credit profiles.
• Application requirements: We examined the documentation and eligibility criteria required for loan applications, focusing on ease and clarity.
• Time-in-business requirements: We reviewed the minimum duration a business must be operational to qualify for a loan, ensuring options for new and established businesses. 
• Application simplicity: We evaluated how straightforward and user-friendly the entirety of the loan application process is. 
• Funding speed: We analyzed the time it takes to disburse funds after approval.
• Customer support: We assessed the quality and availability of customer support.
• Consumer reviews: We considered feedback from past and current customers to understand experiences and satisfaction levels.
• Better Business Bureau rating: We checked each provider's BBB rating to gauge its reputation and reliability in the financial industry.

A Closer Look at Our Best Small Business Loans:

1. Biz2Credit -  Our Top Pick for Short-Term Loans

Biz2credit offers term loans and also provides revenue-based financing — meaning it receives a portion of the borrower's revenue as payment. This type of financing isn't technically a loan but is a good option for businesses that need more financial flexibility. 

It’s worth noting, that according to our research, only a small percentage of customers are eligible for Biz2Credit's term loan program. Repayment plans range from one to three years. Biz2Credit has a BBB rating of B. 

Why We Chose to include Biz2Credit in this list: Biz2Credit is a great choice for borrowers looking for short-term loans and for business owners who don't need a traditional business loan and are comfortable with revenue-based financing. Finally, its minimum credit score requirement is lower than most other lenders on this list. 

Read the full Biz2Credit review

Biz2Credit Visit Site

2. Lendio - Our Top Pick for Equipment and Startup Loans

Founded in 2011, Lendio is a lending marketplace with over 75 vendors. It provides a one-stop shop for various products, including term loans, lines of credit, equipment financing, and more. It also provides fast business capital for borrowers who need cash quickly — once approved, you’ll be able to access funds in as little as 24 hours. Lendio has an A+ rating from the Better Business Bureau.

Why We Chose to include Lendio in this list: Lending marketplaces offer business owners an easy way to explore various financing options and save time by submitting just one application for multiple offers. It offers favorable loan terms for equipment and startups, and we're also a fan of Lendio's high loan limits.

Read the full Lendio review

Lendio Visit Site

3. OnDeck - Our Top Pick For Overall Experience

Founded in 2006, OnDeck has facilitated over $15 billion in U.S.-based loans, making it a significant player in the small business lending market. OnDeck interest rates are higher, which may work less for business owners with good credit. Its line of credit product is unsecured; OnDeck relies on personal guarantees and business assets to secure a term loan. The company holds an A+ rating from the BBB. 

Why We Chose to include OnDeck in this list: We chose to include OnDeck on this list because of its transparency regarding qualifying requirements and streamlined application process. Due to rapid funding, OnDeck is a good option for small businesses needing fast capital. OnDeck reports payments to the credit bureaus, meaning that if you maintain a good payment history, it can be easier to receive future funding and qualify for lower interest rates. 

Read the full OnDeck review

OnDeck Visit Site

4. Bank of America - Our Top Pick for Those Who Also Want Branch Access

Whether you're interested in an SBA loan or searching for funding for a new company car or office location, Bank of America has more loan options than many other lenders. It's also well-known for the additional perks and rewards offered through its Preferred Rewards for Business program, which includes waived fees and discounted interest rates for qualifying accounts. Bank of America's BBB rating is A-.

Why We Chose to Include Bank of America in This List: We chose to include Bank of America in this list because it provides a wide variety of secured and unsecured loans, SBA loans, auto loans, and commercial real estate financing. Bank of America offers financing options for well-established companies yet has one of the lowest time-in-business requirements for lines of credit.

5. American Express Business Line of Credit - Best For Lines of Credit 

The American Express Business Line of Credit — aka the Business Blueprint — charges a monthly fee in lieu of traditional interest based on term lengths of six to 24 months. There are no origination, application, or maintenance fees, annual fees, or prepayment penalty. It's a cost-effective option for short-term financing needs. 

It’s valuable to note that loans of $150K or more require borrowers to be existing AMEX clients and meet other criteria.

Why We Chose to Include American Express Business Line of Credit In This List: We chose to include American Express in this list because it offers rewards for existing customers by providing a relatively high line-of-credit limit. Many customers prefer this option to term loans because of their flexibility. And, the time-in-business and credit score requirements are reasonable. 

Read the full American Express Business Line of Credit Review

American Express® Business Line of Credit Visit Site

6. Funding Circle - Our Top Pick For Quick Approvals

Founded in 2010, Funding Circle has funded loans totaling $21 billion. It offers term loans from 6 months to 7 years. Interest rates are competitive; a one-time origination fee ranges from 4.49% to 10.49%. Funding Circle’s term loans are secured, meaning a lien will be placed on business assets. It's a peer-to-peer lender allowing institutional investors to fund businesses. 

Why We Chose to Include the Funding Circle in This List: We chose to include the Funding Circle in this list mainly because of its simple and quick application and funding processes. There is also a relatively low barrier to entry in terms of credit scores and revenue to receive a comparably high loan amount. We also like that the lender offers fast loan approval and longer terms than many other financial institutions.

What Customers Are Saying: The collateral requirements and personal guarantees can deter some potential borrowers. Despite this, Funding Circle is praised by customers for its streamlined process, transparency, and customer service. The platform has a BBB A+ rating 

Read the full Funding Circle review

Funding Circle Visit Site

7. LendingTree - Our Top Pick For Comparing Lenders

LendingTree is a loan marketplace founded nearly 30 years ago, making it one of the original lending institutions of this type. It offers financing from many lenders, including some of those covered in this comparison list. The types of loans available through LendingTree include SBA loans, term loans, lines of credit, equipment financing, and others. The platform holds an A+ rating with the BBB.

Why We Chose to Include LendingTree on This List: The marketplace can be great for business owners who don’t know what type of funding they want or what loan amounts they qualify for. LendingTree earns revenue from its lending partners, which means that the platform is free for borrowers.

Read the full LendingTree review

LendingTree Visit Site

8. Wells Fargo - Our Top Pick For SBA Loans 

Wells Fargo offers several avenues for business owners seeking loans. Interest rates are fairly standard, but loan amounts are higher than other lenders on this list. Wells Fargo has been a significant player in small business lending. In the 2023 fiscal year, Wells Fargo issued $427+ million in 7(a) loans, making it one of the most active SBA lenders. Wells Fargo is not BBB accredited. 

Why We Chose to Include Wells Fargo on This List: As a traditional bank, Wells Fargo offers a variety of financing options for both new and experienced business owners, as well as secured and unsecured financing. Business owners needing higher capital will find it to be a good option. 

9. Revenued - Our Top Pick For Fast Funding

Revenued offers a funding service slightly different from the others listed in this comparison article, but it does the job. Revenued’s Business Card is not a credit card but a merchant cash advance (though the company doesn't call it that), the amount of which depends on business performance. It uses a factor rate rather than a traditional interest rate, typically around 1.1, meaning if you draw $1,000, you'll pay back around $1,100. Requirements include monthly revenues of $20,000 minimum.  Revenued is BBB A+ rated.   

Why We Chose to Include Revenued: As one of the newest lenders on this list, Revenued aims to provide small business owners with flexible terms, fast response times, and complete transparency. Two stand-out features include decisions within an hour and funding within 24 hours, which is one of the fastest turnaround times we’ve found in the market.

Read the full Revenued review

Revenued Visit Site

10. Lendzi - Our Top Pick For Low or No Credit Score

As a lending institution with 60+ partners, Lendzi can service a wide variety of businesses and offers several loan options through its partners. It works with borrowers with low credit or even no credit and claims it can provide funds within 24 hours of approval. Lendzi’s BBB rating is A+.

Why We Chose to Include Lendzi In This List: Not all business owners can qualify for traditional loans, and that's where Lendzi comes in. It accommodates business owners who've been denied financing through other means and also those with low/no credit. In exchange, Lendzi loans often have starting APRs or factor-based rates that are more expensive than traditional rates. 

Read the full Lendzi review

Lendzi Visit Site

Compare the Top Business Loans Companies

What is a small business loan?

A small business loan can be used for many reasons, including startup costs, managing cash flow, purchasing equipment or inventory, growing and operating the business, and more. Small business loans are available for all kinds of businesses, from one-man operations and start-ups to established companies.  

You usually need a solid business plan and good credit history to qualify for a small business loan. Some lenders may also require owners to personally guarantee the loan, meaning that if the business fails, the owner is responsible for personally paying back the loan. Terms and interest rates on small business loans can vary and typically depend on the lender's and a business's financial health. 

These loans are essential for helping small businesses grow, manage cash flow, and take advantage of new opportunities. They come in different forms, though term loans, Small Business Administration (SBA) loans, and lines of credit tend to be the most typical.

Types of small business loans

There are various types of business loans to suit different needs. Some of the most common include:

• Term loans: These have fixed repayment schedules and often come with fixed interest rates. Short-term loans must be repaid within 18 months, while long-term loans can extend up to 10 years.
• Line of credit: This provides access to a set amount of money businesses can draw from as needed. It's flexible, and charges interest only on the borrowed amount.
• SBA loans: Backed by the Small Business Administration, these loans typically offer better rates and terms than other small business loans.
• Equipment financing: Ideal for purchasing new equipment, this type of loan uses the equipment as collateral, often resulting in favorable terms and interest rates.
• Commercial real estate loans: Used to construct or buy commercial property, these loans are tailored for real estate investments.
• Microloans: These are smaller loans often available through peer-to-peer lending platforms and are ideal for startups or businesses needing less capital.
• Working capital loans: Designed to cover everyday operational expenses like payroll and supplies, these are often essential for maintaining cash flow.

Best Place To Get a Business Loan

The best place to get a business loan depends on several factors, including your specific needs, how long you've been in business, your credit score, and your location. Some of the more prevalent options include: 

• Traditional lenders like banks and credit unions: Great if you have a strong credit history and need larger loan amounts, as they often offer competitive interest rates and long-term loans. 
• Online lenders: Ideal for quicker access to funds, often providing more flexible terms and faster approval times, making them a good option for newer businesses or those with less-than-perfect credit.
• National Funding: Specializes in small business loans, offering a range of products tailored to various business needs. 

If you're unsure where to start, using a lending marketplace can be an excellent first step. These platforms allow you to compare offers from multiple lenders, helping you find the best rates and terms for your situation.

Ultimately, the best lender for your business will depend on your unique circumstances and financial goals. Taking the time to compare different options can ensure you find the most suitable financing for your needs.

How to Choose a Small Business Loan

Choosing the right small business loan starts with understanding your needs. If you have a clear idea of your financial requirements, a term loan might be the best option. Term loans offer a lump sum with fixed repayment terms. This is ideal for significant, one-time investments like expanding your business or purchasing equipment.

If your funding needs are uncertain or you prefer more flexibility, a business line of credit could be the better solution. Lines of credit allow you to draw funds as needed, up to a certain limit, and repay them either incrementally or all at once.

Business credit cards can be highly useful for those needing smaller, ongoing funding. They offer the convenience of revolving credit, and if you pay off the balance in full each month, you can avoid interest charges.

Consider your specific needs, the amount you need to borrow, and how you plan to use and repay the funds to determine the best loan type for your business. Comparing different options and consulting with a financial advisor can also help you make an informed decision.

What Documents Are Needed to Apply for a Small Business Loan?

When applying for a small business loan, you’ll need to gather several key documents to demonstrate your business's financial health and your ability to repay the loan. Here’s a rundown of the most common documents required:

• Business Plan: Outlines your business goals, strategies, and financial projections. Lenders use this to understand your business model and growth plans.
• Financial Statements: Includes profit and loss statements, balance sheets, and cash flow statements. They provide a snapshot of your business's financial performance over time.
• Tax Returns: Both personal and business tax returns for the past two to three years are typically required. This helps lenders verify your income and financial history.
• Bank Statements: Recent bank statements (usually the last six months) show your business’s cash flow and financial stability.
• Legal Documents: These may include your business license, articles of incorporation, and any commercial leases. These documents verify the legal standing and ownership of your business.
• Personal Identification: A government-issued ID (like a driver’s license or passport) is necessary to confirm your identity.
• Credit Report: Lenders will check your personal and business credit scores to assess your creditworthiness.

Preparing these documents in advance can streamline the loan application process and improve your chances of approval.

What Credit Score Is Needed for a Business Loan?

The credit score needed for a business loan varies depending on the type of loan and the lender. Generally, a higher credit score increases your chances of approval and access to better loan terms.

• Traditional Banks: A personal credit score of 680 or higher is typically required for loans from traditional banks. Banks prefer borrowers with strong credit histories, which indicate lower risk.
• SBA Loans: The Small Business Administration (SBA) loans usually require a minimum credit score of around 640. However, higher scores (700 and above) can improve your approval odds and help secure better rates.
• Online Lenders: Online lenders tend to be more flexible, often approving loans for borrowers with credit scores as low as 500-600. However, lower credit scores might come with higher interest rates and shorter repayment terms.
• Alternative Lenders: Credit score requirements can be more lenient for merchant cash advances or invoice factoring options. Some alternative lenders may approve loans based primarily on business revenue and cash flow rather than credit scores.

It's essential to check each lender's specific requirements, as they vary widely. Improving your credit score before applying can help you qualify for better terms and lower interest rates.

What Should I Do if I’m Rejected for a Small Business Loan?

Don't be discouraged if your application for a small business loan is rejected. Instead, take proactive steps to improve your chances next time.

• Understand the Reason: Ask the lender why your application was denied. Common reasons include low credit scores, insufficient collateral, or inadequate cash flow.
• Review Your Credit Report: Obtain your credit report and check for errors or areas that need improvement. Focus on paying down existing debt and making timely payments to boost your score.
• Strengthen Your Application: Improve your business plan and financial statements. Demonstrate how you plan to use the loan and how it will benefit your business. This can make your application more appealing to lenders.
• Consider Alternative Lenders: Look into online lenders, credit unions, or community banks, which may have more flexible criteria than traditional banks.
• Seek Professional Advice: Consult with a financial advisor or a small business consultant. They can provide valuable insights.

By taking these steps, you can improve your financial health and enhance your chances of securing a loan in the future.

What Are Some Possibly Additional Business Funding Options?

Additional, possible business funding options beyond traditional loans include:

• Merchant Cash Advance: This provides a lump sum upfront and is repaid through a portion of your daily credit card sales. Merchant cash advances often come with higher fees.
• Credit Cards: Business or personal credit cards can be useful for covering expenses. Look for cards with 0% APR introductory offers to save on interest. Pay off the balance before the promotional period ends to avoid high interest rates.
• Small Business Grants: Grants are non-repayable funds provided by various organizations, often aimed at businesses from underserved communities. Check with your local Chamber of Commerce or search online for opportunities. Tailor your application to grants that align with your business to improve your chances of success.
• Crowdfunding: Platforms like Kickstarter allow you to raise funds from the public. Crowdfunding success depends heavily on effective marketing and communicating your business's or product's value. Be aware that some platforms require you to meet your funding goal to receive any funds.
• Personal Loans: This can be an option if you can find a lender that permits using personal loans for business purposes. These may come with higher interest rates based on your credit score and income.
• Bootstrapping: This involves funding your business using personal savings or income. It’s a way to avoid debt, but may require significant personal financial sacrifice.

Each option has pros and cons, so consider what best fits your business's needs and financial situation.

Bottom Line: Take Your Time Understanding Your Options

When considering a small business loan, it's crucial to do thorough research and explore all options. Rushing into a decision can lead to unfavorable terms. Compare different lenders, understand the terms, and ensure the loan aligns with your business goals to make a smart, informed choice.

Not sure where to start? Using a lending marketplace can be beneficial. These allow you to compare offers, ensuring you find the best rates and terms for your unique circumstances. 

Ultimately, the right lender will depend on factors like your borrowing needs, time in business, credit score, and location. Taking the time to compare different options can ensure you secure the most suitable financing for your business.

Frequently Asked Questions (FAQs)

How do small business loans work?

Small business loans provide funds that you repay over time with interest. Terms, APRs, and repayment schedules vary based on the lender and loan type. Once approved, funds are deposited in a linked bank account, and repayments usually begin the following month. Term loans have fixed repayment terms, while lines of credit and business credit cards have no set payoff date.

How hard is it to get a small business loan?

Getting a small business loan can be challenging as it may consider your credit score, business history, and financial health. Traditional banks have stricter requirements, while online lenders offer more flexibility but may have higher rates. Qualifying for term loans can be challenging for new businesses or those with negative cash flow.

How much income do I need to get a business loan?

Income requirements vary by lender and loan type, but generally, lenders look for annual revenue of at least $100,000. Some accept less for smaller loans or startups. It's important to remember that income is not the sole factor: Lenders will evaluate your time in business, assets, credit score, and other factors to determine how much you may qualify for.

What can you do if you're denied a small business loan?

If your small business loan is denied, ask the lender for reasons why. Improve your credit score, strengthen your business plan, and consider alternative lenders like online platforms or credit unions. Seeking advice from a financial advisor can also help.

How much can I get for a startup business loan?

Startup business loans can be difficult to secure, but options are still available. Startup business loans typically range from $5,000 to $250,000, depending on the lender, your business plan, and financial projections. And while not specifically for startups, the SBA's 7(a) loans offer funding up to $5 million, which doesn’t guarantee that every startup will receive the maximum amount.

What is the easiest way to get a small business loan?

Business credit cards and online lenders are often the easiest funding type for small businesses. Cards have less stringent requirements than other types of financing, and online lenders offer faster approvals and flexible requirements compared to traditional banks. Beyond these options, consider invoice factoring or revenue-based financing.

Are there small business loans for bad credit?

Yes, some lenders specialize in loans for bad credit, often with higher interest rates. Options include online lenders, merchant cash advances, and microloans. Note, however, that you’ll likely have to secure your loan with business or personal assets. Equipment financing is also easier with less-than-stellar credit because the equipment is used as collateral.

Am I personally liable for a small business loan?

You may be liable for a small business loan if you provide a personal guarantee or if your business is structured as a sole proprietorship. Unless your business is well-established or has sufficient collateral, avoiding a personally guaranteed business loan is difficult. Liability depends on loan terms and business structure.

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

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Written by Zina Kumok

Zina Kumok is an experienced personal finance writer now contributing to BestMoney. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in U.S. News & World Report, Forbes Advisor and Bankrate. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins.