Two female small business owners discussing lending options with a lender

The Best Lenders for Small Business Loans in 2021

10+ min read • Feb 07, 2020 • Jesse Sumrak

Finding the best lender is like digging through a bag of trail mix. You have to dodge a lot of mediocre alternatives to obtain the M&Ms. But the decadent, chocolatey reward is oh-so-worth the effort.

Instead of helping you sift through a bag of dried fruits and nuts, we’ve decided to comb through the pack and pull out all of the M&Ms for you (aren’t we sweet?). In this guide, we’re going to cover the best lenders for small business loans. Not the maybe-you-should-consider or might-have-potential lenders—we’ve only included the best-of-the-best.

Because you don’t really want to sort through a bunch of subpar options. You want the cream of the crop. We get it—that’s why our list is short and sweet.

Before we dive into the best lenders, let’s take a second to explain how to choose the best lenders and what makes a lender the “best.”

How Should You Choose a Lender?

Two small business owners meeting with a lender

1. Shop Around

Don’t settle for your first loan option. Shop around. 

Lending marketplaces can offer you hundreds (yes, hundreds) of loan options, whereas a bank may only offer you a few. By using a marketplace like Lendio, you can browse, compare, and choose a lender without going from bank to bank.

Regardless if you choose a one-stop-shop marketplace or to do it the old fashioned way, make sure you shop around to get a feel for your options. Buyer’s remorse can be terrible when shopping for a new pair of shoes—imagine how much worse it could be after choosing a 3-year loan.

“Want to skip the line at the bank? Use an online lending marketplace to shop around for your loan. You can apply online, compare options, and get funding within 24 hours of approval.”

2. Only Consider Lenders That Fit Your Timeline

Timing is everything, especially when it comes to money. The cheapest loan 3 months too late won’t do you much good.

Traditional loan application processes can take weeks or months—ain’t nobody got time for that. The best small business lenders can approve and fund your loan in days or even hours. Now that’s what we’re talking about.

If timing is a factor, limit your list to the lenders that can approve and fund your loan quickly.

At Lendio, we’re all about speed. We use a 15-minute application, nifty algorithms, digital document uploads, and personal funding managers to help you find the best lender as fast as possible.

3. Break Free of Tradition

When you think about getting a loan, you probably think of strolling into a big bank and walking out with money in your account. Unfortunately, your chances of that are pretty slim. Big banks only accept around 26% of small business loan applications—the odds are not in your favor.

Traditional lenders want seasoned business owners, perfect credit scores, and mountains of collateral—not quite the characteristics of most small business owners.

But big banks aren’t your only option. Alternative lending is on the rise in the US, giving anyone a fair shot at scoring grade-A financing. These options will look at your personal credit, existing assets, or even your monthly credit card transactions to determine if you qualify—making it easy for new business owners to find a loan.

If the banks turn you down, don’t give up! You may have just been looking for the right loan in the wrong place. Don’t be afraid to break free of tradition.

“Alternative lending is a way to find financing outside of a traditional banking institution. The application and approval times are typically faster than the process at your local bank.”

4. Look for Transparency

The best lenders will make your fees, rates, and terms clear and obvious. And if you need help understanding, they’ll take the time to walk you through all the details.

Transparent lenders also make it easier for you to shop around. By comparing rates and terms, you’ll ensure you find the best loan available. 

You don’t have to settle for vague explanations and jargon-laden conversations. The best-of-the-best lenders will give you all the information you need.

5. Examine Your Lender’s Reputation

The best lenders don’t just have excellent rates and terms—they have positive customer reviews to back up their claims.

Read your fellow small business owners’ firsthand opinions. They’ll give you the no-filtered truth you need to choose the right lenders.

What Makes a Lender the ‘Best’?

Excellent lender helping two small business owners finance their business

While there’s no one-size-fits-all business loan, there are lenders who make financing faster, easier, and cheaper.

When searching for the best lenders, we weigh several factors:

  • Interest Rates: How much does the loan cost?
  • Loan Minimums/Maximums: What’s the potential loan size for small businesses?
  • Loan Terms: Are the terms flexible or rigid?
  • Qualifications: How stringent are the qualification requirements?
  • Process: Is the application and funding process quick and easy?
  • Service: How friendly and helpful is the customer service?
  • Customer Reviews: What do verified borrowers have to say about their experiences working with a lender?

Don’t just take our word for it—here are the best lenders (as decided by you, the lendees) for small business loans in 2020. To read individual reviews and summaries of what all of our lenders have to offer, check out our comprehensive lenders listing

OnDeck

Loan Options: 

  • Merchant Cash Advance
  • ACH Loan
  • Business Line of Credit
  • Term Loan
  • Equipment Financing

Loans up to $100,000-500,000, depending on the loan option

Minimum Qualifications:

  • 1 Year in Business
  • 500 Credit Score
  • $8,000 in Monthly Revenue

OnDeck is all about creating impeccable customer experiences. They offer reduced fees and lower rates to repeat borrowers. So if you foresee needing a variety of term loans or lines of credit in your business’s future, it’s not a bad idea to start with OnDeck.

“OnDeck has loaned more than $12 billion to businesses worldwide.”

Businesses can score loans from $5,000 to $250,000. To qualify, you’ll need at least 1 year in business, $100,000 in annual revenue, and a minimum credit score of 600. Not too shabby.

It’s not just the better rates and fees that keep customers coming back. Our verified borrowers found the customer support and funding process transparent and straightforward.

“OnDeck provided the funds in a quick, professional manner with full transparency on the policies of the approving [of] the loan. Very pleased with the process and thankful!” — Verified Borrower

See what other OnDeck borrowers have to say here.

The Business Backer

Loan Options: 

Loans up to $200,000

Minimum Qualifications:

  • 1 Year in Business
  • 550 Credit Score
  • $20,000 in Monthly Revenue

The world of traditional lending has little mercy on those with flawed or non-existent credit, and that’s a shame for a good number of small business owners. The Business Backer takes a different approach. Instead of only looking at the numbers, they add the customer’s story to the data.

In a world of practically unregulated factoring, The Business Backer is on a mission to provide transparent merchant cash advance options. You should still do your research (and if you use Lendio, our funding managers will help), but The Business Backer’s transparency makes comparing alternative lending options easy.

To qualify, you’ll need roughly 12 months in business, a personal credit score of 550 or higher, and at least $180,000 in annual revenue, but the actual amount necessary varies by loan product.

Our verified consumers gave The Business Backer a perfect score in terms of speed, process, communication, and transparency. What more can you ask for?

“I’ve gotten loans from other entities and let me tell you that this was one of the most pleasant transactions I’ve done. Very competitive and definitely outshines competitors. Very transparent.” – Verified Borrower

See what other The Business Backer borrowers have to say here.

Headway Capital

Loan Option: 

Loans up to $100,000

Minimum Qualifications:

  • 6 Months in Business
  • 550 Credit Score
  • $4,166 in Monthly Revenue

Need a line of credit with no hidden fees? Look no further than Headway Capital.

Headway Capital is an alternative lender that delivers lightning-fast funding. In the world of lines of credit, you can generally expect to wait for 1–2 weeks to access your funds—but not at Headway Capital. Approval is quick, and once approved, you get funds in your account within 1 business day.

One of Headway Capital’s biggest draws is their simple qualifications: $50,000 in annual revenue, 560+ credit score, and just 6 months in business.

Due to their lenient requirements, rates are a bit higher. And they have a 2% draw fee each time you tap into your line of credit—but besides that, they’re a fantastic option for small business financing.

Verified borrowers love Headway Capital’s speed, simplicity, and transparency. When it comes to processes, it doesn’t get much smoother.

“Headway Capital is easy to work with and provides funding quickly so that our business needs were able to continue on track for needed business expansion. Headway maintains open communication with our agency so that we clearly understand what is expected of our agency as we utilize funding of the line of credit.” – Verified Borrower

See what other Headway Capital borrowers have to say here.

Fundation

Loan Options: 

  • Business Line of Credit
  • Term Loan

Loans up to $50,000

Minimum Qualifications:

  • 2 Years in Business
  • 660 Credit Score
  • $8,400 in Monthly Revenue

If you run a small business that’s been tagged as “unbankable,” Fundation is an excellent option for finding a line of credit or term loan.

With Fundation, you can get a loan between $20,000 and $500,000 on a 1- to 4-year term and a line of credit for up to $150,000. Qualifications are a little bit more stringent: 1+ years in business, 3+ employees, good personal credit, and at least $100,000 in annual revenue.

So Fundation isn’t the best option for brand new businesses, but if you have a bit of history under your belt, you can qualify for a lot of money very quickly. Your financing could be funded as soon as 1 day after applying—that’s the benefit of choosing a direct lender.

Borrowers were super excited about Fundation’s speed and flexibility and the fact that there is no prepayment penalty.

“Fundation gave made the money that I needed without a hassle. The money was in my account in 2 days. Amazing!” – Verified Borrower

See what other Fundation borrowers have to say here.

Mulligan Funding

Loan Option: 

Loans up to $1,000,000

Minimum Qualifications:

  • 1 Year in Business
  • 500 Credit Score
  • $42,000 in Monthly Revenue

If you’ve been in business for at least 9 months, Mulligan should be on your financing radar. Mulligan is a family-owned direct lender, so you get direct access to the funding source.

Once you’ve funded with Mulligan and maintained a good repayment history, you’ll be in a prime position to qualify for expedited loans. That means you can get more cash even before you’ve completed your initial loan payment—and without the double cost most lenders charge. That’s just one example of the family-friendly difference Mulligan promises.

“Mulligan Funding is a member of the ILPA, a trade organization dedicated to advancing best practices in small business lending.”

Approval is quick and easy. Applicants can get approved in less than a day and have up to $500,000 in funding in 2 business days. Yeah, that’s fast.

If the thought of shopping for financing at a mom-and-pop shop sounds more appealing than the great and spacious big bank, then Mulligan should be top of your list for ACH and term loans.

Lendistry

Loan Option: 

Loans up to $5,000,000

Minimum Qualifications:

  • 2 Years in Business
  • 640 Credit Score
  • $12,500 in Monthly Revenue

Securing small business financing in low-income areas can be next to impossible. These businesses are usually seen as high risk, so if lenders offer financing, it’s at a horrendous rate. That’s why platforms like Lendistry exist.

Lendistry is a CDFI (Community Development Financial Institution). CDFIs are dedicated to boosting underserved communities by providing affordable financial assistance to small businesses.

Lendistry is for all of the business owners who’ve heard “no” one too many times. If you have less-than-perfect credit or fall short of collateral requirements, Lendistry can help.

This isn’t just financing you settle for, either. Lendistry boasts reasonable rates, transparent terms (up to 10 years and loans up to $1 million), quick access to capital, and flexibility. Loans start at $50,000, so if you’re looking for a small injection of capital, you’ll need to look elsewhere.

To qualify, you’ll need a credit score above 600, $150,000 in annual revenue, and at least 2 years in business. If you don’t meet all of the criteria, don’t worry—Lendistry looks at each application on a case-by-case basis, so there’s always a chance.

If you own a small business in a low-income area, add Lendistry to the top of your list of potential lenders.

Funding Circle

Loan Option: 

Loans up to $400,000

Minimum Qualifications:

  • 2 Years in Business
  • 660 Credit Score
  • $20,833 in Monthly Revenue

Funding Circle is a UK-based peer-to-peer lender. Technically, they’re not a “lender,” but they connect you to investors. However, the application, funding, and payment process still feels like any ol’ loan.

Due to their model, Funding Circle can offer fantastic rates on term loans. Well, for those who can qualify, that is. You’ll have to meet some rigid requirements to satisfy their demands: 2+ years in business, $150,000+ annual revenue, and a 640+ credit score.

For those who qualify, you’ll enjoy low APRs and up to $500,000 in term loans.

Still Overwhelmed? Let Us Help.

A lender helping two female small business owners

Sometimes, more information empowers you to make better decisions. Other times, it stagnates critical decision-making and leads to paralysis by analysis. Yuck.

At Lendio, our whole business is dedicated to helping you find, apply for, and receive the financing you need to grow your business. We have a super-nifty 15-minute application that asks all the right questions to help you find the perfect loan.

No math, no application fee, no obligation. Once you’re approved, we help you get access to your funds in as little as 24 hours. There’s no dilly-dallying here.

We’re America’s largest small business loan marketplace, which means we have a network of 75+ of the world’s best lenders for small business loans. Once you apply, we’ll match you to one of the best lenders on this list and other fantastic options.

Our algorithm is designed to find you the very best lenders for the very best loans. It’ll even take into account past verified borrower reviews when presenting you with options. If borrowers are having less-than-ideal experiences with a lender, you’re less likely to receive a recommendation for that lender. See, even our machine learning technology is on your side.

Once the offers start rolling in, we just leave you to it. Have fun choosing. Bye…

Just kidding! We’ll provide you with your very own dedicated personal funding manager. They’ll ask questions to understand more about your business circumstances, financing needs, and goals. Armed with this information, they’ll walk you through your loan options and help you choose the perfect small business loan.

What are you waiting for? Your perfect loan is just a 15-minute application away. Apply now.

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Jesse Sumrak

Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He's created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he's not dabbling in digital marketing, you'll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.