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Compare the best small business loans of 2024.

Looking for financing to purchase equipment, provide working capital, or buy commercial real estate for your small business? A business loan can be the perfect solution. Compare the best business loan options below including lines of credit, SBA loans, term loans, and other alternative forms of financing.

Lender/Funder*Best Loan/Financing TypeLoan/FInancing AmountMin. Time in BusinessLoan/Financing TermMin. Credit ScoreTime to Funds
(After Approval)
BlueVineLine of Credit$250K2 years6 or 12 months650Same day
Idea FinancialLine of Credit$10k-$250k3 yearsUp to 18 months650Same day
Headway CapitalLine of Credit$5k-$100k1 year12 or 18 months615Same day
Funding CircleTerm Loan$25K – $750K2 years6 months to 7 years660As fast as 3 days
Bankers Healthcare Group (BHG)Term Loan$25k – $500k2 years12 years700As fast as 3 days
Cadence BankSBA 7(a)Up to $5 million2 years7 to 25 years6505 to 10 days SBA turnaround
BayFirst FinancialSBA 7(a)Up to $350,0002 years7 to 25 years65030-60 days SBA turnaround
Ready CapitalSBA 7(a)$10k to $5 million2 years7 to 25 years64030-60 days SBA turnaround
BalboaEquipment FinancingUp to $500,0007 months7 years640Same day
ClickLeaseEquipment FinancingUp to $20,000None2-5 years520Same day
KapitusBusiness Cash Advance$10k to $750k3 years6-36 months6401 business day
OnDeckBusiness Cash Advance$5,000 to $250,0002 years6-18 months625Same day
Raistone CapitalInvoice Factoring$50k to $50 million+1 year30-180 days+N/A1 business day
Gillman-BagleyInvoice Factoring$50K to $10 million3 months30 daysN/A1 business day
Eagle Business FundingInvoice FactoringUp to $5 millionNoneNone, they take on the invoice repaymentN/AAs fast as 48 hours

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Best for Line of Credit

BlueVine – Line of Credit

APR range

Starting at 4.9% for 6-month repayment schedule

Funding amount

Up to $250,000

Term

6 or 12 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

Bluevine’s line of credit is ideal because your approval is revolving and, as you pay down what you’ve drawn, you’re able to access those funds repeatedly. This means you could have the funds you need to really get your business started. 

Pros:

  • Best line of credit for speed to decision
  • Fast funding
  • Option for monthly or weekly payments

Cons: 

  • Not available to businesses in Nevada, North Dakota, and South Dakota
  • Fees for drawing on your line of credit
  • Personal guarantee for the funding required

 

  • $15 fee for bank wire option for funding
  • 1.7% per week or 7% per month for line of credit draws

 

 

BlueVine – Line of Credit

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APR range

Starting at 4.9% for 6-month repayment schedule

Funding amount

Up to $250,000

Term

6 or 12 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

Bluevine’s line of credit is ideal because your approval is revolving and, as you pay down what you’ve drawn, you’re able to access those funds repeatedly. This means you could have the funds you need to really get your business started. 

Pros:

  • Best line of credit for speed to decision
  • Fast funding
  • Option for monthly or weekly payments

Cons: 

  • Not available to businesses in Nevada, North Dakota, and South Dakota
  • Fees for drawing on your line of credit
  • Personal guarantee for the funding required

 

  • $15 fee for bank wire option for funding
  • 1.7% per week or 7% per month for line of credit draws

 

 

Idea Financial – Line of Credit

APR range

Daily interest rate minimum of 0.0658%

Funding amount

$10,000-$250,000

Term

Up to 18 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

Another option you have for a line of credit is Idea Financial. This financer requires that business owners looking for financing have a minimum of two years in business under their belt and at least $15,000 in revenue each month. They also will not lend to sole-proprietors or non-profits, so those business entities in those categories must look elsewhere for their financing.

Pros:

  • Best line of credit for length of term offered
  • Quick approval and funding 

Cons: 

  • Selective qualification requirements
  • Doesn’t lend to sole proprietors or nonprofits
  • Draw fee of 2.49%

 

 

Idea Financial Logo

Idea Financial – Line of Credit

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APR range

Daily interest rate minimum of 0.0658%

Funding amount

$10,000-$250,000

Term

Up to 18 months

Min. credit score

650

Time to funding

As fast as 24 hours after approval

Another option you have for a line of credit is Idea Financial. This financer requires that business owners looking for financing have a minimum of two years in business under their belt and at least $15,000 in revenue each month. They also will not lend to sole-proprietors or non-profits, so those business entities in those categories must look elsewhere for their financing.

Pros:

  • Best line of credit for length of term offered
  • Quick approval and funding 

Cons: 

  • Selective qualification requirements
  • Doesn’t lend to sole proprietors or nonprofits

  • Draw fee of 2.49%

 

 

Headway Capital – Line of Credit

APR range

Starting at 40% annually

Funding amount

$5,000-$100,000

Term

12, 18, 24 months

Min. credit score

620

Time to funding

As fast as 24 hours after approval

Headway Capital offers a true revolving line of credit. Their monthly payments and ongoing access
to capital make it a great product for those who want to be able to access funds at any time. With
their fast and easy application and funding process you can have funds in your account within one
business day.

 

Pros:

  • Best line of credit for less-qualified borrowers
  • Weekly or monthly repayment options available
  • Just 1-year minimum time in business required

Cons: 

  • Not available to businesses in Arkansas, Connecticut, Michigan, Montana, North Dakota, Nevada, Rhode Island, South Dakota, and Vermont
  • Lower max loan amount
  • Draw fees may apply
  • Terms and fees vary depending on what state you operate out of
  • Minimum first draw amount
  • 2% draw fee in some states

 

 

Headway Capital Logo

Headway Capital – Line of Credit

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APR range

Starting at 40% annually

Funding amount

$5,000-$100,000

Term

12, 18, 24 months

Min. credit score

620

Time to funding

As fast as 24 hours after approval

Headway Capital offers a true revolving line of credit. Their monthly payments and ongoing access
to capital make it a great product for those who want to be able to access funds at any time. With
their fast and easy application and funding process you can have funds in your account within one
business day.

 

Pros:

  • Best line of credit for less-qualified borrowers
  • Weekly or monthly repayment options available
  • Just 1-year minimum time in business required

Cons: 

  • Not available to businesses in Arkansas, Connecticut, Michigan, Montana, North Dakota, Nevada, Rhode Island, South Dakota, and Vermont
  • Lower max loan amount
  • Draw fees may apply

  • Terms and fees vary depending on what state you operate out of
  • Minimum first draw amount
  • 2% draw fee in some states

 

 

Best for Term Loan

Funding Circle – Term Loan

APR range

11.29% to 30.12%

Funding amount

$25,000 to $500,000

Term

6 months to 7 years

Min. credit score

660

Time to funding

As fast as 3 days after approval

For a term loan, consider applying with Funding Circle. The lender offers large loan amounts up to $500,000. However, their required 660 minimum credit score makes it more difficult to qualify for than some other online lenders might be.

Pros:

  • Best alternative option to SBA
  • Fixed monthly payments
  • No early repayment fees that lets you save on interest
  • Large loan amounts available

Cons: 

  • Longer time in business requirement than with other loan products
  • Longer possible time to receive funds than other lenders might take
  • 3.49% to 6.99% origination fee 
  • Late payment fee 5% of missed payment

Funding Circle – Term Loan

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APR range

11.29% to 30.12%

Funding amount

$25,000 to $500,000

Term

6 months to 7 years

Min. credit score

660

Time to funding

As fast as 3 days after approval

For a term loan, consider applying with Funding Circle. The lender offers large loan amounts up to $500,000. However, their required 660 minimum credit score makes it more difficult to qualify for than some other online lenders might be.

Pros:

  • Best alternative option to SBA
  • Fixed monthly payments
  • No early repayment fees that lets you save on interest
  • Large loan amounts available

Cons: 

  • Longer time in business requirement than with other loan products
  • Longer possible time to receive funds than other lenders might take

  • 3.49% to 6.99% origination fee 
  • Late payment fee 5% of missed payment

Bankers Healthcare Group (BHG) – Term Loan

APR range

Rates starting at 7.99%

Funding amount

Up to $250,000

Term

Up to 12 years

Min. credit score

660

Time to funding

Approval in as little as 24 hours, funding in as little as 3 days

If you’re looking for a much longer-term loan, Bankers Healthcare Group, also called BHG, can offer businesses loans with up to 12-year terms. Plus, the rates begin at 7.99%, which is pretty good for an online lender. The credit score requirement is just 660, making this an accessible, long-term financing option.

Pros:

  • Best term loan for healthcare industries
  • Strong customer service
  • Transparent fees
  • Variety of loan options

Cons: 

  • Possible prepayment penalty, depending on the loan 
  • Longer time in business requirement than with other loan products

3% origination fee

Bankers Healthcare Group (BHG) – Term Loan

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APR range

Rates starting at 7.99%

Funding amount

Up to $250,000

Term

Up to 12 years

Min. credit score

660

Time to funding

Approval in as little as 24 hours, funding in as little as 3 days

If you’re looking for a much longer-term loan, Bankers Healthcare Group, also called BHG, can offer businesses loans with up to 12-year terms. Plus, the rates begin at 7.99%, which is pretty good for an online lender. The credit score requirement is just 660, making this an accessible, long-term financing option.

Pros:

  • Best term loan for healthcare industries
  • Strong customer service
  • Transparent fees
  • Variety of loan options

Cons: 

  • Possible prepayment penalty, depending on the loan 
  • Longer time in business requirement than with other loan products

3% origination fee

Best for SBA 7(a)

Cadence Bank – SBA 7(a)

APR range

Current prime rate + lender rate

Funding amount

Up to $5 million

Term

7 to 25 years

Min. credit score

650

Time to funding

5 to 10 days SBA turnaround

As far as SBA loans go, the SBA 7(a) is one of the most flexible. It allows businesses to use the funds in a number of ways and has a great interest rate. Cadence Bank is an SBA lender and can help you get Small Business Administration-backed loans for your business.

Pros:

  • Best for customer care
  • Tend to have lower rates 
  • High $5-million maximum on all SBA 7(a) loans
  • Backed by the Small Business Administration

Cons: 

  • Slower speed to funding compared to FinTech products
  • Stricter requirements for new businesses
  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee

Cadence Bank – SBA 7(a)

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APR range

Current prime rate + lender rate

Funding amount

Up to $5 million

Term

7 to 25 years

Min. credit score

650

Time to funding

5 to 10 days SBA turnaround

As far as SBA loans go, the SBA 7(a) is one of the most flexible. It allows businesses to use the funds in a number of ways and has a great interest rate. Cadence Bank is an SBA lender and can help you get Small Business Administration-backed loans for your business.

Pros:

  • Best for customer care
  • Tend to have lower rates 
  • High $5-million maximum on all SBA 7(a) loans
  • Backed by the Small Business Administration

Cons: 

  • Slower speed to funding compared to FinTech products
  • Stricter requirements for new businesses

  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee

BayFirst – SBA 7(a)

APR range

Current prime rate + lender rate

Funding amount

Up to $350,000

Term

7 to 25 years

Min. credit score

650

Time to funding

30 to 60 days SBA turnaround

For an SBA (7)a loan, you’ve got BayFirst as an option for financing. CreditBench, which is part of BayFirst, offers these loans backed by the SBA. While they offer up to $350,000, they can still be a fantastic option for small business owners that meet the SBA requirements.

Pros:

  • Best publicly held SBA option
  • Backed by the SBA
  • Expedited approval process compared to non-preferred SBA lenders

Cons: 

  • Stricter qualification requirements
  • Average funding times
  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee
BayFirst

BayFirst – SBA 7(a)

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APR range

Current prime rate + lender rate

Funding amount

Up to $350,000

Term

7 to 25 years

Min. credit score

650

Time to funding

30 to 60 days SBA turnaround

For an SBA (7)a loan, you’ve got BayFirst as an option for financing. CreditBench, which is part of BayFirst, offers these loans backed by the SBA. While they offer up to $350,000, they can still be a fantastic option for small business owners that meet the SBA requirements.

Pros:

  • Best publicly held SBA option
  • Backed by the SBA
  • Expedited approval process compared to non-preferred SBA lenders

Cons: 

  • Stricter qualification requirements
  • Average funding times

  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee

Ready Capital – SBA 7(a)

APR range

Current prime rate + lender rate

Funding amount

$10,000 to $5 million

Term

7 to 25 years

Min. credit score

640

Time to funding

30 to 60 days SBA turnaround

For a large, SBA-backed loan, look to Ready Capital. They offer loans up to the standard $5 million for business owners looking for cash for their business. But they do have some fees to look out for when comparing your options.

Pros:

  • Best SBA for micro and startups
  • Large loan amounts
  • Backed by the SBA
  • Good rates for the loan type and amount

Cons: 

  • More strict qualification requirements
  • Has a longer time to funds than online lenders 
  • Must be owner operated and fit size requirements of the SBA
  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee

Ready Capital – SBA 7(a)

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APR range

Current prime rate + lender rate

Funding amount

$10,000 to $5 million

Term

7 to 25 years

Min. credit score

640

Time to funding

30 to 60 days SBA turnaround

For a large, SBA-backed loan, look to Ready Capital. They offer loans up to the standard $5 million for business owners looking for cash for their business. But they do have some fees to look out for when comparing your options.

Pros:

  • Best SBA for micro and startups
  • Large loan amounts
  • Backed by the SBA
  • Good rates for the loan type and amount

Cons: 

  • More strict qualification requirements
  • Has a longer time to funds than online lenders 
  • Must be owner operated and fit size requirements of the SBA

  • 4% referral and packaging fee
  • Approximately $450 in bank closing costs
  • Loans from $30k to $150k require a 1.7% guarantee fee
  • Loans above $150k require a 2.25% SBA guarantee fee

Best for Equipment Financing

Balboa – Equipment financing

Funding amount

Up to $500,000

Term

4, 36, 48, or 60 months

Min. credit score

620

Time to funding

As soon as same day

Balboa Capital offers customers up to $500,000 in equipment financing, which might not be enough for some business owners, but could be a good fit for others. They do require some form of collateral for all of their financing options, but if you use them for financing equipment of less than $350,000, you’ll need only soft collateral.

Pros

  • Best for heavy machinery financing
  • One-hour approval time during business hours
  • Flexible term lengths
  • Can offer same-day funding

Cons

  • Restricted to equipment purchases
  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
  • $295 Doc Fee
  • $250 Site Inspection Fee
balboa capital logo

Balboa – Equipment financing

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Funding amount

Up to $500,000

Term

4, 36, 48, or 60 months

Min. credit score

620

Time to funding

As soon as same day

Balboa Capital offers customers up to $500,000 in equipment financing, which might not be enough for some business owners, but could be a good fit for others. They do require some form of collateral for all of their financing options, but if you use them for financing equipment of less than $350,000, you’ll need only soft collateral.

Pros

  • Best for heavy machinery financing
  • One-hour approval time during business hours
  • Flexible term lengths
  • Can offer same-day funding

Cons

  • Restricted to equipment purchases
  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)

  • $295 Doc Fee
  • $250 Site Inspection Fee

ClickLease – Equipment financing

Funding amount

Up to $20,000

Term

24-60 months

Min. credit score

520

Time to funding

As soon as same day

If you need a new piece of equipment, then equipment financing is a fantastic way to finance that. You can go with a company like ClickLease to help you buy the item you need and pay it back over time. ClickLease has flexible terms and rates for a variety of business owners. 

Pros:

  • Best option for loan requests under $25k
  • No hard credit pull
  • Potentially tax deductible financing
  • Flexible terms and credit score
  • Monthly payments

Cons: 

  • Restricted to equipment purchases
  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)

One-time documentation fee

 

Clicklease Logo

ClickLease – Equipment financing

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Funding amount

Up to $20,000

Term

24-60 months

Min. credit score

520

Time to funding

As soon as same day

If you need a new piece of equipment, then equipment financing is a fantastic way to finance that. You can go with a company like ClickLease to help you buy the item you need and pay it back over time. ClickLease has flexible terms and rates for a variety of business owners. 

Pros:

  • Best option for loan requests under $25k
  • No hard credit pull
  • Potentially tax deductible financing
  • Flexible terms and credit score
  • Monthly payments

Cons: 

  • Restricted to equipment purchases
  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)

One-time documentation fee

 

Best for Business Cash Advance

Kapitus – Business Cash Advance

Funding amount

$5,000 to $250,000

Term

6 to 36 months

Min. credit score

575

Time to funding

As little as 24 hours, once approved

A business cash advance from Kapitus can help you get the funds you need to keep your business going. They can offer up to $750,000—a good amount of money for businesses in the market. They’re also a good option for businesses with lower credit scores because they look for a score of only 575 or higher.

Pros:

  • Best renewal experience
  • Approval within four hours
  • 575 minimum credit requirement
  • Payments taken from bank account can be daily, weekly, or monthly

Cons: 

  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
  • One year in business required
  • Fees: $20 ACH or $50 wire fee. 
  • Origination Fees
    • Contracts under $15,000: $395
    • Contracts over $15,000: 2.5%
Kapitus Logo

Kapitus – Business Cash Advance

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Funding amount

$5,000 to $250,000

Term

6 to 36 months

Min. credit score

575

Time to funding

As little as 24 hours, once approved

A business cash advance from Kapitus can help you get the funds you need to keep your business going. They can offer up to $750,000—a good amount of money for businesses in the market. They’re also a good option for businesses with lower credit scores because they look for a score of only 575 or higher.

Pros:

  • Best renewal experience
  • Approval within four hours
  • 575 minimum credit requirement
  • Payments taken from bank account can be daily, weekly, or monthly

Cons: 

  • Doesn’t build business credit (borrower may be able to self-report to credit bureaus)
  • One year in business required

  • Fees: $20 ACH or $50 wire fee. 
  • Origination Fees
    • Contracts under $15,000: $395
    • Contracts over $15,000: 2.5%

OnDeck – Business Cash Advance

Funding amount

$5,000-$250,000

Term

6-18 months

Min. credit score

600

Time to funding

As fast as same day after approval

If you’re looking for a cash advance or a line of credit to help cover costs for your business for a short amount of time, OnDeck’s product might be right for you. They can offer fast funding with no prepayment fees, but beware that missing any repayments can hurt your credit score.

Pros:

  • Best online closing experience
  • Fast funding
  • Can help boost your credit because they report to the major credit bureaus 
  • No prepayment fees

Cons: 

  • Potentially costly factor rates compared to other types of financing
  • Weekly payments

2.5% on 1st loan, 1.25% on 2nd loan, 0% on 3rd loan and thereafter

OnDeck – Business Cash Advance

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Funding amount

$5,000-$250,000

Term

6-18 months

Min. credit score

600

Time to funding

As fast as same day after approval

If you’re looking for a cash advance or a line of credit to help cover costs for your business for a short amount of time, OnDeck’s product might be right for you. They can offer fast funding with no prepayment fees, but beware that missing any repayments can hurt your credit score.

Pros:

  • Best online closing experience
  • Fast funding
  • Can help boost your credit because they report to the major credit bureaus 
  • No prepayment fees

Cons: 

  • Potentially costly factor rates compared to other types of financing
  • Weekly payments

2.5% on 1st loan, 1.25% on 2nd loan, 0% on 3rd loan and thereafter

Best for Invoice Factoring

Raistone Capital – Invoice Factoring

Factor rate

Varies

Funding amount

$50,000 to $50 million

Term

30-180+ days

Min. credit score

N/A

Time to funding

As little as one day

For businesses looking to pass their unpaid invoices off to another company to collect on, Raistone Capital could be the solution. This allows your working relationship with your customers to stay the same, while essentially getting paid earlier through Raistone, at a discounted rate.

Pros:

  • Best for large facility needs
  • Get cash quick, instead of waiting
  • Relationship with your customers stays the same

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t build business credit (business owner may be able to self-report.)

1% Facility Fee

Raistone Logo

Raistone Capital – Invoice Factoring

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Factor rate

Varies

Funding amount

$50,000 to $50 million

Term

30-180+ days

Min. credit score

N/A

Time to funding

As little as one day

For businesses looking to pass their unpaid invoices off to another company to collect on, Raistone Capital could be the solution. This allows your working relationship with your customers to stay the same, while essentially getting paid earlier through Raistone, at a discounted rate.

Pros:

  • Best for large facility needs
  • Get cash quick, instead of waiting
  • Relationship with your customers stays the same

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t build business credit (business owner may be able to self-report.)

1% Facility Fee

Gillman-Bagley – Invoice Factoring

Factor Rate

Varies

Funding amount

$50,000 to $10 million

Term

30 days

Min. credit score

None, based on your accounts receivable

Time to funding

As soon as same day

Gillman-Bagley offers invoice factoring, meaning you could sell them your unpaid invoices and they would pay a percentage of what those are worth. In this scenario, collection is then out of your hands, and Gillman-Bagley goes on to handle the collection of those invoices. Your customers know another company was working to get your invoices paid. Result: you accelerate your cash flow and spend less time and resources tracking down clients for payment.

Pros:

  • Best for customer experience
  • Builds business credit
  • No minimum credit score
  • No minimum amount of time in business

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t work with medical offices or construction
  • No facility or processing fees
Gillman Bagley

Gillman-Bagley – Invoice Factoring

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Factor Rate

Varies

Funding amount

$50,000 to $10 million

Term

30 days

Min. credit score

None, based on your accounts receivable

Time to funding

As soon as same day

Gillman-Bagley offers invoice factoring, meaning you could sell them your unpaid invoices and they would pay a percentage of what those are worth. In this scenario, collection is then out of your hands, and Gillman-Bagley goes on to handle the collection of those invoices. Your customers know another company was working to get your invoices paid. Result: you accelerate your cash flow and spend less time and resources tracking down clients for payment.

Pros:

  • Best for customer experience
  • Builds business credit
  • No minimum credit score
  • No minimum amount of time in business

Cons: 

  • Minimum funding amount of $50,000
  • Doesn’t work with medical offices or construction

  • No facility or processing fees

Eagle Business Funding – Invoice factoring

Factor Rate

Varies

Funding amount

Up to $5 million

Term

No term, they take on your invoices

Min. credit score

None, based on invoices

Time to funding

As little as 48 hours after approval

Invoice factoring allows you to sell your outstanding invoices to a company for a lump sum of cash. They, of course, take a percent of those invoices, but then they handle the collection. Eagle Business Funding can do exactly that for your business if you decide to pass your invoices along to a third party.

Pros:

  • Best for transportation and trucking
  • No waiting around for your customers to pay
  • Fast funding
  • No credit score requirement

Cons: 

  • Doesn’t build business credit (business owner may be able to self-report)
  • Don’t operate in California

No additional fees

Eagle Business Funding – Invoice factoring

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Factor Rate

Varies

Funding amount

Up to $5 million

Term

No term, they take on your invoices

Min. credit score

None, based on invoices

Time to funding

As little as 48 hours after approval

Invoice factoring allows you to sell your outstanding invoices to a company for a lump sum of cash. They, of course, take a percent of those invoices, but then they handle the collection. Eagle Business Funding can do exactly that for your business if you decide to pass your invoices along to a third party.

Pros:

  • Best for transportation and trucking
  • No waiting around for your customers to pay
  • Fast funding
  • No credit score requirement

Cons: 

  • Doesn’t build business credit (business owner may be able to self-report)
  • Don’t operate in California

No additional fees

Types of small business loans.

Whatever your business needs, there’s a small business loan for that.

Business Line of Credit

A business line of credit is like your superhero sidekick, ready to back you up when you need it most. Imagine you’ve got a cash flow hiccup, unforeseen expenses, or an unmissable opportunity for growth – this is where your line of credit steps in. It’s flexible, allowing you to borrow exactly what you need when you need it, and you only pay interest on the funds you use. Better still, once you repay what you’ve borrowed, your credit limit goes back up. It’s a reliable, revolving safety net for your business, giving you peace of mind and financial agility.

Best for: Working capital and other short-term needs.

Loan Amount

$1k-5250K

Speed of Funds

1-2 days

Interest Rate

8%-60%

SBA Loan

The SBA Loan, backed by the U.S Small Business Administration, offers a variety of loans designed to cater to an array of business needs. The 7(a) plan is the most flexible, assisting small businesses with a variety of expenses, from short-term working capital to long-term real estate development. The 504 loan is specifically tailored for major fixed asset purchases, such as land or machinery. The SBA Express loan is your ticket to quick funding, with a turnaround time of 36 hours for a loan approval decision. 

Each of these loans offers competitive interest rates, longer repayment terms, and lower down payments compared to traditional business loans. They are particularly beneficial for businesses that might have difficulty securing funds from other sources. With an SBA loan, you can propel your business forward while maintaining manageable debt.

Best for: Long-term business investments, purchasing machinery, real estate, or business expansion.

Loan Amount

up to $5M

Speed of Funds

1-3 months

Interest Rate

Prime+

Business Term Loan

A term loan provides a lump sum that gets repaid in regular intervals over a set amount of time, also known as the loan term. These loans are great for businesses that need a substantial amount of money upfront and prefer predictable payments. They are commonly used for long-term investments, such as purchasing equipment or real estate, expanding your business, or refinancing existing debt.

Best for: Long-term investments, refinancing debt, and other one-time expenses.

Loan Amount

$5k-2M

Speed of Funds

As soon as 24hrs

Interest Rate

As Low as 8.49%

Equipment Financing

Use this loan to purchase any kind of equipment your business needs. There are financing options for nearly every industry and any variety of items you need. Financing agreements can be structured similarly to a term loan or be structured as a lease with varying options to purchase the equipment at the end of the lease.

Best for: Businesses needing industrial equipment.

Loan Amount

5k-5M

Speed of Funds

As soon as 24hrs

Interest Rate

As Low as 7.5%

Commercial Mortgage

Use it to buy, build, expand, remodel, or even refinance your business. A commercial mortgage is similar to a residential mortgage, but it’s specifically designed for commercial properties. These loans have fixed or variable interest rates and are secured by the property being purchased.

Best for: Long-term investment in commercial real estate.

Loan Amount

$250k-5M+

Speed of Funds

1-2 months

Interest Rate

As Low as 6.25%

Microloans

Microloans are small loans typically ranging from $500 to $50,000, designed for small businesses that may not qualify for traditional loans. They are often used for working capital, inventory purchases, or start-up costs. These loans are particularly beneficial for minority-owned businesses and those in underserved communities.

Best for: Start-up businesses, minority-owned businesses, and underserved communities.

Loan Amount

$500 – $50,000

Speed of Funds

1 month

Interest Rate

As Low as 8%

Alternative forms of financing.

Whatever your business needs, there’s a small business loan for that.

Accounts Receivable Financing

Accounts receivable financing, often referred to as invoice factoring, works by providing your business with immediate capital in exchange for your outstanding invoices. A factoring company buys your account receivables and pays you a substantial portion of the amount upfront, typically around 80-90%. The remaining balance, minus a factoring fee, is paid to your business once your customer settles their invoice with the factoring company.

Best for: Businesses with outstanding invoices that are hindering cash flow.

Loan Amount

Tied to receivables

Speed of Funds

As soon as 24hrs

Interest Rate

as low as 3%

Business Cash Advance

A business cash advance offers businesses swift access to funds in exchange for a portion of future sales. Think of it as selling a slice of your future earnings today. Payments are withdrawn daily from your business bank account based on a fixed percentage. This type of financing is particularly suitable for businesses with irregular or seasonal cash flow. Moreover, it is more accessible than traditional loans, making it a popular choice for businesses that may not qualify for other forms of financing.

Best for: Businesses that need a quick influx of cash.

Loan Amount

$5k-1M

Speed of Funds

As soon as 24hrs

Interest Rate

As Low as 18%

Business Credit Card

A business credit card gives you easy access to capital for everyday expenses and can build your business credit history. Plus, many business credit cards offer cashback or rewards programs that can help offset business expenses.

Best for: Small, ongoing expenses and building credit history.

Loan Amount

Up to $150K

Speed of Funds

2-4 weeks

Interest Rate

Up to 31%

Other government business loans.

USDA 

Funded by the United States Department of Agriculture, these programs can support a variety of purposes, including business expansion, refinancing, and working capital.

Here is a quick overview of some of the key USDA business loan programs:

1. Business and Industry Loan Guarantees (B&I): The B&I program helps create jobs and stimulate rural economies by financially backing rural businesses. This program helps mitigate risk for lenders, making it easier for businesses in rural areas to get the capital they need for operations, growth, or modernization.

2. Rural Energy for America Program (REAP): REAP provides guaranteed loan financing to rural small businesses for renewable energy systems or to improve energy efficiency.

3. Intermediary Relending Program (IRP): The IRP offers low-interest loans to local intermediaries who re-lend to businesses to improve the economy in rural communities.

EXIM Working Capital Loan Guarantee

The Export-Import Bank of the United States (EXIM) Working Capital Loan Guarantee is a specialized financial solution designed to support U.S. businesses involved in international trade. This program aids businesses by covering their short-term working capital needs, such as inventory purchases, manufacturing costs, or even payment to suppliers.

The beauty of this program lies in its structure – instead of directly lending money to businesses, EXIM provides a guarantee to the lenders, covering up to 90% of the loan amount. This guarantee reduces risk to the lender, making it easier for businesses to secure financing.

SBA Disaster Loans

These loans are offered to businesses affected by declared disasters. They provide the capital needed for businesses to recover and rebuild. 

The Small Business Administration (SBA) provides various types of disaster loans to cater to different business needs during and after declared disasters. These include:

  1. Business Physical Disaster Loans: These loans are meant to assist businesses in recovering from disasters by repairing or replacing damaged physical property like buildings, inventory, or equipment.
  2. Economic Injury Disaster Loans (EIDL):  These loans provide working capital to help businesses continue their operations and cover expenses during the period of economic injury caused by a disaster.
  3. Military Reservists Economic Injury Loans (MREIDL): These loans aim to provide funds to eligible small businesses to meet operating expenses that they could have met, but are unable to meet because an essential employee was “called-up” to active duty in their role as military reservist.

Farm Service Agency (FSA Loans):

FSA loans cater to farmers and ranchers, providing the necessary funding for various agricultural activities. These loans are perfect for those looking to start, improve, or expand their farm or ranch.

Common types of FSA loans include:

  1. Operating Loans: These loans are designed to assist with the cost of running a farm or ranch such as livestock, feed, seed, equipment repairs, and insurance.
  2. Farm Ownership Loans: These loans are for farmers and ranchers who want to purchase or enlarge a farm or ranch
  3. Emergency Farm Loans: These loans help farmers and ranchers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine.

Indian Loan Guarantee Program (ILGP)

The ILGP is designed to assist American Indian or Alaskan Native-owned businesses. The program provides loan guarantees to eligible borrowers, encouraging lenders to extend credit to businesses that may otherwise struggle to secure financing.

To qualify for the Indian Loan Guarantee Program (ILGP), the business must be at least 51% owned by a federally recognized American Indian tribe or Alaskan Native corporation, or an individual who is an enrolled member of such a tribe or corporation.

Minimum requirements for obtaining a small business loan.

The eligibility criteria for obtaining funding may differ based on the type of loan and the lender.

CREDIT SCORE

600+

Credit score requirements will vary. While some options are available for scores in the 500’s a minimum credit score of 600 will make it easier to qualify for a loan.

TIME IN BUSINESS

6 MONTHS+

While some lenders may allow for 3 months and others may require 1-2 years, six months is a good rule of thumb to follow to improve your chances of qualifying for funding.

MONTHLY REVENUE

$8K+

Lenders will want to see a minimum threshold of monthly revenue. Like the other requirements, the exact minimum will vary by lender and loan type.

Steps to get a small business loan.

Securing a small business loan can help entrepreneurs propel their ventures to new heights. Here are the essential steps to guide you on this journey:

  1. Determine Your Need: Before you start your loan application, it’s crucial to clearly outline why you need a loan. Whether it’s for expanding your business, purchasing equipment, or managing cash flow, having a clear purpose will guide your decision and demonstrate to lenders your commitment and planning.
  1. Choose the Right Type of Loan: As we’ve discussed, there are many different types of small business loans, each designed to cater to specific business needs. Review your options carefully and choose the one that fits your requirements best.
  1. Consider Secured vs. Unsecured Loans: A crucial decision you’ll have to make is whether to go for a secured or unsecured loan. Secured loans require collateral, such as property or inventory, which the lender can claim if you fail to repay the loan. These loans often have lower interest rates due to the reduced risk for the lender. On the other hand, unsecured loans do not require collateral but may have higher interest rates. Your choice largely depends on your business’s financial situation and risk tolerance.
  1. Check Your Credit Score: Your credit score is a key factor lenders consider when deciding whether to approve your loan. Make sure you have a strong credit score before applying. If your score isn’t high, consider taking steps to improve it before you apply.
  1. Prepare a Detailed Business Plan: This should outline your business goals, strategies, target market, and financial projections. A comprehensive business plan will show lenders that you have a solid strategy in place.
  1. Gather Necessary Documents: This typically includes financial statements, tax returns, bank statements, and legal documents relating to your business. Check with your lender to see exactly what you need.
  1. Apply for the Loan: Once you’ve prepared, it’s time to apply. Depending on the type of loan and the lender, you may be able to apply online or may need to do so in person.
  1. Wait for Approval and Funds: After you’ve submitted your application, the lender will review it and make a decision. If you’re approved, the lender will then distribute the funds. This process can take anywhere from a few days to a few months, depending on the type of loan.

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How to apply for a business loan with Lendio.

Sure, you can go the bank route with a long application process and 75% rejection rate. But if you’re looking for financing in this lifetime, Lendio offers a faster, easier application process.

STEP
1
Fill out the 15-minute online application.

It’s secured with bank-grade encryption and SSL technology, so you know your information is safe.

STEP
2
Receive matches.

We pair you with loan options from our network of 75+ lenders. Our dedicated funding managers can help you weigh the pros and cons of each option.

STEP
3
Get funded.

Once you’re approved, you’ll be able to access your capital in as little as 24 hours.

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Business loan FAQs

Business loans are taken out by small business owners either through banks or online lenders. Amounts and loan requirements can vary quite significantly. The business owner will repay the loan over a set period of time along with any associated interest and fees.

It is possible to get certain types of business financing with a lower credit score. Some business cash advance lenders, for example, will allow for a minimum credit score in the 500s. Just know that with a lower credit score, lenders will typically look for a longer time in business and higher monthly revenue.

There are a number of reasons your loan may be denied. Your funding manager will work with you to identify loans you are best qualified for through our network of 75+ lenders. Should you be unable to find a match, Lendio has accounting software tools that can help you improve the financial health of your business and guidance on how to boost your credit score.

The credit score required to qualify for a business loan can vary significantly depending on the type of loan and the lender. However, as a general rule, lenders often look for a credit score of 600 or higher for traditional loans. Some types of loans, like the SBA 7(a) loan, may require a higher credit score, typically around 650 or above. On the other hand, some alternative lenders may have more flexible credit requirements, with minimum scores as low as 500. It’s worth noting that while a higher credit score can increase your chances of approval and secure better terms, it’s not the only factor lenders consider. Other aspects of your business’s financial health, such as revenue and time in business, will also play a significant role.

Obtaining a business loan for a brand-new business can be quite challenging. However, startups can still get equipment financing right from the day they launch their business. Depending on their monthly revenue and credit score, they may qualify for cash advances, accounts receivable financing, or a line of credit within 3-6 months of commencing their business.

Lendio’s methodology

Wondering how we chose the best? We used the following criteria to evaluate the lenders in our network.

  • Time to fund
  • Minimum and maximum loan amounts
  • Lenders with fees comparable to other similar lenders
  • Requirements: Credit score, revenue and time in business requirements
  • Flexible repayment options
  • External websites reviews.

*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (February 18, 2024). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.

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