Best Small Business Loans

     

Kabbage

5/5

BEST SMALL BUSINESS LOAN PROVIDER

  • Minimum personal FICO score of 640 required
  • Low revenue requirement ($3,000/month)
  • Transparent fee structure
  • No pre-payment penalties or additional fees
START A QUOTE 

Lendio

4.5/5

BEST SMALL BUSINESS LOAN MARKETPLACE

  • Must be in business for at least six months
  • Have $10,000 in monthly revenue to qualify
  • Must have a personal score of 540
START A QUOTE 

Biz2Credit
4.25/5

BEST FOR LARGE BORROWERS

  • Commercial loans from $25,000–$5 million
  • Not geared towards small or new businesses
  • No collateral requirements
START A QUOTE

Uncapped

4.25/5

  • Only for ecommerce merchants and SaaS companies
  • Offers revenue based financing and fixed term loans
  • No fees for missed payments
START A QUOTE 

OnDeck

4/5

  • Serves businesses with poor or bad credit history
  • Annual revenue requirement of $100,000
  • Interest rates are higher than other providers
START A QUOTE 

Accion

3.75/5

 

  • Offers guidance to help startups become “loan ready”
  • Best for startup business loans
  • Must have alternative revenue sources to repay loan
START A QUOTE 

Fundbox

3.5/5

 

  • Only offers lines of credit
  • Time in business requirement of three months
  • Only pay for what you use
START A QUOTE 

It is important to consider the best small business loans for startups and entrepreneurs since borrowing capital is one of the greatest strategies for growing and leveraging a business. Most entrepreneurs need a business loan to:

  • Pay their business insurance
  • Take care of payroll
  • Capitalize on business opportunities
  • Have the necessary funds to weather financial ups and downs

Your business type and reasons for wanting a loan will determine which of the best small business loans you might want to consider. They each have their own advantages and disadvantages.

Our Approach:

Choosing the best small business loan comes down to three things:

  • Type of business you have
  • Needs of your business
  • What you want for the future of your business

In this review, we’ll look at some of the best lenders for small business and figure out what makes them the top choice for different types of businesses.

Our Top 7 Business Loans for 2022:

  1. Kabbage, offered by American Express, is our No. 1 pick for small business loans because of its streamlined and smooth application process, transparent fee structure, and no pre-payment penalties, maintenance fees, or draw fees. 
  2. Lendio is the best overall small business loan marketplace because it offers you coverage from multiple providers in one place, allowing you to do comparison shopping for your loan. 
  3. Biz2Credit offers loans, lines of credit, and working capital loans for larger, more established businesses, providing up to $5 million in lending.
  4. Uncapped is the youngest member of the business loans industry but its transparent, low pricing, and focus on ecommerce merchants and SaaS companies make it a great option for online businesses.  
  5. Accion offers the best loans for startups because, in addition to lending, they provide further advice, strategies, and support to help entrepreneurs qualify for a loan if they haven’t yet.
  6. OnDeck offers the best loans for businesses with bad credit because they provide workable repayment options and easy approval.
  7. Fundbox offers loans for businesses needing quick cash to fund a short-term project.
The Truic Flame Logo

Recommended: Learn more about small business loans by reading our comprehensive guides! You can also check out our free business loan calculator tool!

Best Small Business Loan Provider: Kabbage

Backed by the financial and industry expertise of one of the oldest financial institutions in the US — American Express — Kabbage offers flexible and easy-to-access funding for Small Businesses looking for lines of credit.

Kabbage loans come with transparent monthly fees depending on the term of the loan: 

  • 2%–9% for six-month loans
  • 7.5%–18% for 12-month loans
  • 15.75%–27% for 18-month loans

There are no additional fees, account maintenance, or early payment fees, but you will be charged a fee if your payments don’t go through or are late. Kabbage measures your eligibility and loan size by looking at your financial data, so you will be required to link your primary business checking or payment processor to the Kabbage platform. You must be in business for at least 12 months, disqualifying recent startups and new businesses.

Each loan comes with a high level of customer service and support offered by American Express, making it easy for small business owners to fully understand their risks and liabilities and how to use their platform. 

Since Kabbage only offers lines of credit, if you are looking for a longer-term loan solution or invoice financing, you should consider one of the other providers on this page, like Lendio or Accion. 

To apply for a Kabbage business loan, you will need to provide the following:

  • Business name, address, and phone number
  • Business checking account 
  • Your name, personal address, phone number, and Social Security number
  • Business industry
  • Business tax ID or EIN

PROS

  • Transparent financing
  • No additional fees besides the interest rate associated with the loan
  • Low monthly revenue requirement
  • Backed by American Express
  • Excellent customer service
  • You can get funded in the same day

CONS

  • Only offers lines of credit, no term loans
  • Must have an online business or payment processing account to verify your revenue
  • A personal guarantee is required
  • Cannot be used to build business credit
The Truic Flame Logo

Get started with a Kabbage Business Loan application and find out if you qualify in minutes. 

Start Application

Best Overall Small Business Loan Marketplace: Lendio

If you want the best small business loan overall, Lendio takes the gold. Lendio is best suited for businesses needing capital fast without the hassle traditional banks put you through. Lendio is also probably one of the best online lending resources for all businesses in general since they have no cap on how much they will fund, and work to get you approved for whatever type of loan your business needs, not to mention great rates too.

When you get a loan through Lendio, you will be provided with great customer support and gain instant access to competing lenders. For example, Lendio can often get you offers within a couple days, so you get approved for a loan faster than applying at each individual lender yourself. The biggest benefit, though, is that they offer any type of business loan you’d need.

Lendio makes business lending convenient and hassle-free. Their customer support is excellent. Their website and mobile app are user-friendly, cutting-edge, and ultra-convenient for the online business person who likes innovation without having to read the fine print. We really like Lendio.

Here is a quick summary of Lendio’s business loans:

  • Any business loan you need
    • Lowest rate: No limit
    • Loans sizes up to: No limit

To apply for a Lendio business loan, you will need to provide the following:

  • Apply online at Lendio.com in 20 minutes providing basic details about your business.
  • Get loan offers in a few days.
  • Accept loan offer.
  • Get funded as early as the same day.

PROS

  • Low credit score approval
  • Money can be any business expense
  • Free up your cash
  • Transparent fees
  • Easy, fast approval
  • Don’t need collateral
  • Average loan is $96,000
  • Get better rates as lenders are competing for your business
  • Great customer support

CONS

  • 6 months of bank statements
  • 2 years of tax returns
  • Soft credit check before being approved
  • Fewer lending partners than pre-COVID-19

Best for Larger Business: Biz2Credit

Biz2Credit is another marketplace lender similar to Lendio except it skews more towards larger businesses looking for longer-term loans with a larger principle amount. They offer loans through multiple lenders with transparent financing and quick funding abilities. 

Their term loans have a starting interest rate of 8.99% and require a personal FICO of 660 and access to your business checking to asset your cash flow and estimated revenue. The interest rates don’t compound, unlike some predatory lenders, and this allows you to calculate the total cost of your loan upfront. Along with the interest rate, be prepared for an origination fee of $250 per loan. 

The conditions for a term loan are different from those for a working capital loan:

Term Loan Conditions

  • Annual revenue of $250,000
  • Personal FICO of 660
  • Minimum 18 months in business

Working Capital Loan Conditions

  • Annual revenue of $250,000
  • Personal FICO of 575
  • Minimum six months in business

We found that the loan specialists at Biz2Credit to be fairly knowledgeable and helpful in answering our questions of loan terms, guarantees, fees, and repayment. We also appreciated the “Virtual CFO tool” that looks at your financial statements to provide insights into your business and its finances. 

The website is not forthcoming about the documentation required. However, we recommend the following, which seems to be standard requirements for business loans:

  • Business name, address, and phone number
  • Business checking account 
  • Your name, personal address, phone number, and Social Security number
  • Business industry
  • Business tax ID or EIN

PROS

  • Multiple options for providers and types of loans
  • Helpful customer service
  • Excellent, easy-to-use tools like Virtual CFO
  • Transparent pricing

CONS

  • Origination fee of $250 applies
  • No clear list of required documents
  • Cannot provide loans for new or small businesses
  • Loan terms max out at 36 months

Best for Ecommerce and SaaS Companies: Uncapped

Uncapped offers two types of loans focused at businesses that generate 100% of their revenue online. One feature that sets that apart from others on this list is they don’t look at your personal FICO score, and it’s not ever required to get a loan from Uncapped. They will examine your business checking account as well as any balances in your vendor accounts on ecommerce platforms like Shopify and Amazon to assess your eligibility for the maximum loan value. 

The two types of loans and their terms are:

  • Revenue-Based Financing: These loans have a flat fee structure ranging from 2%-12%, based on the risk profile of your business, past performance, and your desired use for the loan. They will automatically draw a portion of your monthly revenue from your bank account to repay the loan, but you decide the repayment terms. You can choose to pay Uncapped daily, weekly or monthly, and there are no fees for missed payments. 
  • Fixed-Term Loans: These loans don’t have the flexible repayment structure of a revenue-based loan; instead, they are on a scheduled payment plan between three and 24 months. They also charge a flat fee of between 2% and 12%, which is non-compounding simple interest, and the loans can range from $10,000–$10 million in size. 

Since they only offer loans to online businesses, their application and onboarding process was very smooth and intuitive. To qualify, you must be in business for at least six months and make at least $10,000 in monthly revenue. 

To apply for an Uncapped business loan, you will need to provide the following:

  • Business name, address, and phone number
  • Business checking account or vendor account
  • Business industry
  • Business tax ID or EIN
  • Purpose of loan

PROS

  • Higher lending limits than competitors
  • No need to provide your personal FICO or credit history
  • No missed payment fees
  • Intuitive and smooth, “digital-first” application process
  • Low interest rates
  • Two types of loans, depending on the merchants’ needs and abilities

CONS

  • Only provides support for Ecommerce merchants and online businesses
  • Might take a few days for you to receive your funds
  • Sometimes the due diligence process could take a while

Best Startup Small Business Loan: Accion

Accion is the best small business loan for startups since you will also gain access to advice and support as you get your business off the ground. They'll even help you get “loan ready” to ensure you get funded. Though Accion lends money for other purposes, besides starting a business, Accion offers the best small business loans for individuals needing a startup business loan.

Most lenders refrain from lending money to new businesses because new businesses have no proven track record. This means there’s no way to judge if a business will be successful or not. Lenders don’t like the risk.

Accion is different. They offer money for businesses by taking a slightly different approach. They lend along with offering advice and support. This partnered approach ensures that the business owner at least has some sound business strategies for getting the business up off the ground and running. 

Accion has your best interest at heart from the word “accepted.” Also, they will help business people who do not yet qualify for a loan to become qualified by putting together an action plan for them. Mainly, they’re best for the entrepreneur who wants to take their dream and turn it into a reality.

Here is a quick summary of Accion business loans:

  • Term Loans
    • Lowest rate: 7%
    • Loan sizes up to: $250,000

To apply for an Accion business loan, take note of the following in advance:

  • You will need to have an alternative source of income for repaying the loan
  • You will need to have all former personal debts paid off before you’ll qualify for a business loan with them
  • Accion typically lends smaller amounts of money than traditional lenders, but it will depend solely on your individual circumstances how much they lend you

PROS

  • Need only a 12-month cash flow plan
  • Determination is based on how much you borrow
  • Many uses for the money such as purchasing inventory, buying or leasing equipment, professional expenses, hiring employees, and financing any of the many expenses involved with being an entrepreneur
  • Get funding for restaurant startups and other higher-risk industries

CONS

  • Can be more expensive
  • Some poor customer reviews

Best Loans for Building Business Credit: OnDeck

OnDeck offers term loans and working capital loans, and offers the best loans for small businesses with less than perfect credit. They are a great starting point for repeat borrowers too. We like Ondeck because they offer several repayment options and can often get a business approved for a business loan when nobody else will.

Here is a quick summary of OnDeck business loans:

  • Term Loan
    • Lowest rate: 11.89%
    • Loan sizes up to: $250,000
  • Line of Credit
    • Lowest rate: 10.99%
    • Loan sizes up to: $100,000

To apply for an Ondeck business loan, take note of the following qualifications in advance:

  • Be in business for at least a year.
  • Have a personal FICO score of 600
  • Need annual revenues of at least $100,000
  • Need a business bank account

PROS

  • Borrow as little or as much as you need. Term loans from $5,000 to $250,000.
  • Simple process. Apply in as little as 10 minutes, with a decision as soon as the same day—all to save you time.
  • Tailored options. Multiple loan types, amounts, and repayment terms, so you can get exactly what you need.
  • Real help. A large team of loan advisors to help you find the right solution. And one dedicated to you.

CONS

  • Can be more expensive than other loans
  • Unavailable for some states and industries

Best Loans for Quick Cash: Fundbox

A business line of credit is perfect for small businesses that frequently run into cash flow problems. Eighty percent of businesses fail due to a lack of cash flow. Fundbox only offers lines of credit, but their rates are low and they work fast to get you funded. We like Fundbox because they offer the benefits of a business credit card with lower rates. You only pay interest on the money you spend, not the whole of the loan.

Here is a quick summary of Fundbox business loans:

  • Line of Credit
    • Lowest rate: 4.66%
    • Loan sizes up to: $100,000

To apply for a Fundbox line of credit, meet the following qualifications:

  • 500+ credit score
  • 3+ months in business
  • $25,000 in annual revenue

PROS

  • Larger credit limits
  • Free up your cash
  • Fund only what you want
  • Transparent fees
  • Easy approval
  • Funds available on demand
  • Access to a revolving line
  • Only pay for what you use

CONS

  • Not a long-term finance solution
  • No early payment incentive
  • Pay most of the interest on the front-end of the loan

Recommended: Before going out and opening just any business bank account for your small business, do your due diligence by reading up on the best business checking accounts.

Small Business Loans FAQ

How do business loans work?

Companies that specialize in lending money to businesses, called lenders, make money by charging interest and fees to businesses that borrow money from them. Learn more about how business loans work

How do I get a business loan?

Apply with a business lender, typically your bank or another lending institution, with the right documentation and your business plan. Read more about how to get a small business loan.

What is the best loan for small business?

The best small business loan depends on your company and its needs. However, we recommend Lendio because they make business lending convenient and hassle-free.

What are the benefits of business loans?

A business loan can help to resolve cash flow problems, leverage growth opportunities, and even increase the value of a business.

How do I determine which business loan is best for me?

To determine which type of business loan is best for you, visit our comprehensive guides on the types of business loans.

How do I qualify for a business loan?

Ask these questions to determine if you qualify for a business loan and to assess how likely you are to be approved.

Where can I find loans for women-owned businesses?

Here is a list of the top business loans for women.