Best Small Business Loan Providers – Your Leg Up
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Finding the best business loans and small business lenders is similar to your experience when shopping for a mortgage or personal loan. Each product has its unique advantage in the market, and some may be a better fit for your business needs than others. The only way to find this out for sure is to shop around.
We’ve taken some guesswork out of it for you to compare the features and companies for the best small business loans on the market. These companies are part of the growing segment of online lenders versus the traditional mega-sized financial institutions we’re used to dealing with.
Whether you’ve recently opened your own company or been in business for years, knowing the details and differences in various loan options are guaranteed to be a wise business decision on your part.
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Types of small business loans
Another aspect of small business loans that makes them similar to mortgages is the variety of products available. Small business financing is possible through several methods, and some of the most common types include:
- Lines of credit: For short-term funding, a business can access a revolving line of credit for business expenses. These are considered unsecured business loans, so you do not need any collateral to secure funding. You do, however, need a good credit score, both personal and business credit score.
- Term loans: These loans provide businesses with a lump sum of cash upfront, usually used to purchase fixed assets, such as equipment. The repayment is spread over a defined period, from months to years. Collateral is needed, and many lenders require a down payment, too.
- Small Business Administration (SBA) loans are federally backed business loans with various available programs. There are generally small business loans for small, short-term loans, such as the 7(a) microloan program. Plus, loans are available for real estate, equipment needs, and disaster recovery.
- Invoice factoring: These loans provide cash from the lender based on the outstanding invoices from your current small business customers.
Big Think Capital provides business borrowers with a straightforward and transparent funding platform.
- Business lines of credit from $10k – $1m
- Term as long as 5 years
- Rates as low as 7%
- Decisions as fast as 24 hours
- Quick access to your funds once approved
- Applying won't affect your credit score
Overview of the best small business loan providers
Business loan provider | Best for |
BlueVine | You have outstanding invoices from clients and need access to cash |
OnDeck | You need access to a line of credit or term loans fast |
Funding Circle | Full range of funding options |
FundBox | Fewest fees |
Lendio | Comparing multiple lenders, products, and options at once |
Biz2Credit | Commercial real estate needs |
National funding | Businesses with bad credit |
Kiva | Microloans and crowdsourcing |
American Express | American Express customers who need a line of credit |
Rapid Finance | A super-quick funding process |
The best small business loan providers
BlueVine
Founded in 2013, BlueVine specializes in servicing small business owners. It is a financial technology company (fintech) and does not fall under the traditional bank category. It also does not offer a conventional loan but offers options for a business to access cash.
Lines of credit are offered for up to $250,000 at rates as low as 6.2%. To become eligible, you must have a credit score of 625 or more, your business must have been in operation for at least 24 months, and it must generate at least $40,000 monthly in revenue.
The line of credit isn't available in Nevada, North Dakota, and South Dakota.
OnDeck
OnDeck, formed in 2006, specializes in lending to small businesses. It offers various options for small businesses, including lines of credit and term loans.
The line of credit is designed to be flexible to meet the needs of irregular cash flow. Amounts start at $6,000 and increase up to $100,000. The revolving business lines of credit allow you to access the cash when needed, and then the business is subject to a 12-month repayment period.
Term loans from OnDeck range from $5,000 to $250,000 at an APR of at least 29.9%. Repayment can be made over 24 months.
To become eligible for either of these products, your business must be at least one year old and generate $100,000 or more in revenue. Your FICO score must be at least 625 and you must have a business checking account.
OnDeck does not lend to Nevada, North Dakota, and South Dakota businesses.
Funding Circle
Funding Circle is an online lending platform specializing in small business funding and has connected over 130,000 small businesses to over $19 billion in funds. It offers three major loan products: business lines of credit, business term loans, and the SBA(7)a loan.
The business line of credit allows you to borrow $25,000 to $250,000, incurring an average draw fee of 1.6%. The business term loan lets you borrow $25,000 to $500,000, with repayment in as little as six months or as much as seven years.
The SBA(7)a loan is federally backed with a flat 8% interest rate (as of this writing). You can borrow $30,000 to $500,000. Repayment can be made in up to 10 years. Your business must be established for at least two years, so this wouldn’t be a good option for a startup. You also need a minimum annual revenue of $400,000 and a 650 FICO score for eligibility.
Fundbox
Fundbox was established in 2013 as another AI-powered financial company focused exclusively on small businesses. Since its founding, it has released over $3 billion in funding to 500,000 businesses.
The business line of credit offers loans of up to $150,000. To qualify, your credit score must be at least 600, and your business must be at least six months old and generate annual revenue of at least $100,000 to qualify.
Lendio
Lendio is a marketplace for small businesses applying for funding and credit. The company exists to get funding from business owners, especially where traditional bank loans fall short. Lendio connects business owners to over 75 lenders once your application is submitted. Since its inception, the company has helped fund over 300,000 loans totaling more than $12 billion.
Lendio suggests a minimum credit score of 600 and a business has been in place for six months, generating over $8,000 in monthly revenue.
The company offers a business line of credit of $1,000 to $500,000 at an 8% to 60% interest rate. It also offers a short-term loan of $2,500 to $500,000 for as low as 8%.
Lendio has access to startup loans, commercial mortgages, and business acquisition loans if none of those products suit your needs. Whatever financial solution you are looking for, chances are Lendio can help connect you with an option.
Big Think Capital provides business borrowers with a straightforward and transparent funding platform.
- Business lines of credit from $10k – $1m
- Term as long as 5 years
- Rates as low as 7%
- Decisions as fast as 24 hours
- Quick access to your funds once approved
- Applying won't affect your credit score
Biz2Credit
Like Lendio, Biz2Credit connects business owners with lenders and various loan options.
Biz2Credit's business line of credit provides loans of $10,000 to $1 million at interest rates of 7% to 25%. Repayment can be made in six months to five years. To become eligible, you must have a personal FICO score of 580+, and your business must be at least one year old, generating an average monthly revenue of $10,000.
You can also take an SBA loan of $5,000 to $5 million at rates as low as 6.5%. This loan is funded in at least 30 days, and you can repay the money in five to 25 years.
Biz2Credit also offers equipment financing up to 100% of equipment value, merchant cash advances of up to $250,000, unsecured business loans of up to $100,000, and business acquisition loans of up to $5 million.
National Funding
Since National Funding was founded, it has worked with over 75,000 businesses and funded over $4.5 billion to businesses.
The company's short-term business loans boast an easy application process and quick funding in as little as 24 hours. Loan lengths range from 6 to 18 months. Unlike other platforms, National Funding's website is rather scant on details like eligibility criteria.
Kiva
Kiva is an entirely new concept with small business lending and would fall under the “alternative lenders” category. Founded in 2005 as a non-profit based in San Francisco, Kiva offers microloans, where borrowers can ask for funding for various needs, including business needs, tuition, financial assistance, and multiple other applications.
Kiva works by soliciting donations from the public. Contributors can lend as little as $25, and Kiva then invests their money. For borrowers, applicants apply for funding through Kiva, and once it goes through the underwriting process, the loan is then crowdsourced.
Kiva works with borrowers across the globe and focuses on applicants who might not have access to lending and funding like other countries might have. All funding donated to Kiva goes directly to the loans for the borrowers.
American Express
American Express offers a line of credit for businesses ranging from $2,000 to $250,000. Each time you draw from the line, you have a 6-, 12-, or 18-month repayment period, depending on the terms of your agreement.
Total monthly fees incurred over the loan term range from 3% to 9% for 6-month loans, 6% to 18% for 12-month loans, and 9% to 27% for 18-month loans.
In terms of eligibility, your FICO score must be at least 640, and your business must be at least one year old, generating an average monthly revenue of at least $3,000.
Rapid Finance
As the name implies, Rapid Finance specializes in quick access to credit and loans. Funding may be available literally within hours of your loan approval. The difference between Rapid Finance and other companies is the variety of loan programs available to applicants. The financing options available include:
- Small business loans
- Merchant cash advance
- Lines of credit
- Bridge loans
- SBA loans
- Invoice factoring
- Asset-based loans
- Commercial real estate
The product terms and conditions vary, but the lines of credit start at $5,000.
Summary of best small business loan providers
Lender | Minimum credit score | Loan amounts |
BlueVine | 625 | Up to $250,000 |
OnDeck | 625 | $5,000 to $250,000 |
Funding Circle | 650 | $30,000 to $500,000 |
Fundbox | 600 | Up to $150,000 |
Lendio | 600 | $1,000 to $500,000 |
Biz2Credit | 580 | $10,000 to $5 million |
National Funding | N/A | $5,000 to $500,000 |
Kiva | No minimum | No set amounts |
American Express | 640 | $2,000 to $250,000 |
Rapid Finance | N/A | Starting at $5,000 |
FAQs
What is a “term loan” in the small business world of funding?
A term loan is simply a loan with a predetermined repayment period or a defined repayment timeline. Most business loans have 6-, 12-, 18-month repayment options, although some are as lengthy as 10 years.
Is my personal credit score used when I apply for a business loan?
Yes, in most cases, small business loans use the business owner’s personal credit score as a factor in determining creditworthiness. The need for a strong credit score never goes away, and it is true it follows you in the business world. Keeping your credit score as strong as possible will go a long way during the application process and helping you secure the funding you need for your small business.
Big Think Capital provides business borrowers with a straightforward and transparent funding platform.
- Business lines of credit from $10k – $1m
- Term as long as 5 years
- Rates as low as 7%
- Decisions as fast as 24 hours
- Quick access to your funds once approved
- Applying won't affect your credit score
The bottom line
Navigating the journey of securing funding for a new business, equipped with a detailed business plan, is increasingly straightforward in today's financial world. Small businesses now have access to a variety of funding options, from online-only and non-profit lenders, tailored to suit different needs, including working capital and larger-scale investments. The loan application process, often streamlined through an online application system, takes into account various factors such as credit score requirements, the presence of a business bank account, and the amount of money needed. Lenders offer a range of options, including competitive interest rates, low fees, flexible credit card choices, and substantial lines of credit. Additionally, qualifying borrowers can benefit from clear repayment terms, often with the possibility of longer terms for ease of management. By thoroughly comparing these diverse offerings, small business owners can quickly obtain the necessary funding, empowering them to achieve the growth and success they envision in a thriving economic landscape.
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Writer
Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.
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