A small-business loan can help you stock your shelves, buy new equipment or expand your footprint. Business owners can access funding through traditional banks, online lenders and community lending institutions.
Below, compare the best small-business loans, including bank and SBA loans, business lines of credit, term loans, and equipment- and invoice-based financing. Plus, learn how to qualify and find the right financing for your needs.
How Much Do You Need?
Summary of Small-Business Loans 2022: Compare Financing and Apply
| Lender | Best For | Est. APR | Min. Credit Score | Next Steps |
|---|---|---|---|---|
TAB Bank - Term loan See Your Options
with Fundera by Nerdwallet | Best for Bank small-business loans | 8.99-35.99% | 650 | See Your Options
with Fundera by Nerdwallet |
PNC Bank - Line of credit See Your Options
with Fundera by Nerdwallet | Best for Bank small-business loans | 12.24-14.24% | 720 | See Your Options
with Fundera by Nerdwallet |
SBA 7(a) loan See Your Options
with Fundera by Nerdwallet | Best for SBA loans | 5.50-8.00% | 650 | See Your Options
with Fundera by Nerdwallet |
Credibility Capital - Online term loan See Your Options
with Fundera by Nerdwallet | Best for Online term loans | 6.99-24.99% | 650 | See Your Options
with Fundera by Nerdwallet |
Funding Circle - Online term loan See Your Options
with Fundera by Nerdwallet | Best for Online term loans | 12.18-36.00% | 660 | See Your Options
with Fundera by Nerdwallet |
OnDeck - Online term loan See Your Options
with Fundera by Nerdwallet | Best for Online term loans | 9.00-99.00% | 600 | See Your Options
with Fundera by Nerdwallet |
BlueVine - Line of credit See Your Options
with Fundera by Nerdwallet | Best for Business lines of credit up to $250,000 | 15.00-78.00% | 600 | See Your Options
with Fundera by Nerdwallet |
Fundbox - Line of credit See Your Options
with Fundera by Nerdwallet | Best for Business lines of credit up to $150,000 | 10.10-79.80% | 600 | See Your Options
with Fundera by Nerdwallet |
OnDeck - Line of credit See Your Options
with Fundera by Nerdwallet | Best for Business lines of credit up to $100,000 | 11.00-61.90% | 600 | See Your Options
with Fundera by Nerdwallet |
Triton Capital - Equipment financing See Your Options
with Fundera by Nerdwallet | Best for Equipment financing | 4.99-25.00% | 600 | See Your Options
with Fundera by Nerdwallet |
Our picks for
Bank small-business loans
Banks offer different types of business financing, such as term loans and lines of credit.
TAB Bank - Term loan
Est. APR
8.99-35.99%
Min. Credit Score
650
TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.
Pros
- No prepayment penalty.
- Terms range from 12 to 60 months.
- Bank loan with online application process.
Cons
- Requires high minimum credit score.
- Origination fee and documentation fee charged on all loans.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 650.
- Minimum time in business: Two years.
- Minimum annual revenue: $100,000.
PNC Bank - Line of credit
Est. APR
12.24-14.24%
Min. Credit Score
720
PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.
Pros
- Bank line of credit with competitive interest rates.
- Can fund as quickly as the same business day.
- Monthly repayments with no set term.
Cons
- Requires high minimum credit score and multiple years in business.
- Requires personal guarantee.
- Businesses in certain states and industries are ineligible.
Qualifications:
- Minimum credit score: 720.
- Minimum time in business: Three years.
- Minimum annual revenue: $100,000.
- APR is the market prime rate plus either 7.49% or 9.49%.
Our pick for
SBA loans
A loan funded by participating lending institutions and backed by the Small Business Administration.
SBA 7(a) loan
Est. APR
5.50-8.00%
Min. Credit Score
650
7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.
Pros
- Available as a term loan or line of credit.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
Qualifications:
- Be a for-profit U.S. business.
- Must first use alternative financial resources, including personal assets.
- Financial qualifications determined by individual lender.
Lowest interest rate
Our picks for
Online term loans
A loan repaid with interest over a set period of time.
Credibility Capital - Online term loan
Est. APR
6.99-24.99%
Min. Credit Score
650
Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.
Pros
- Competitive rates among online lenders.
- No prepayment penalty.
- Extra monthly payments can save interest cost.
Cons
- Requires high minimum credit score and revenue.
- Requires business lien and may require personal guarantee.
- Not available in Nevada, North Dakota, South Dakota or Vermont.
Qualifications:
- Minimum credit score: 650.
- Minimum time in business: 2 years.
- Minimum annual revenue: $200,000.
- No bankruptcies in the past 5 years.
Funding Circle - Online term loan
Est. APR
12.18-36.00%
Min. Credit Score
660
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
Pros
- Cash can be available within 3 business days.
- Competitive rates among online lenders.
- No minimum revenue requirement.
Cons
- Requires business lien and personal guarantee.
- Not available in Nevada.
Qualifications:
- Minimum credit score: 660.
- Minimum time in business: 2 years.
- Minimum annual revenue: None.
- No bankruptices in the past 7 years.
May fund quickly
OnDeck - Online term loan
Est. APR
9.00-99.00%
Min. Credit Score
600
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Pros
- Cash can be available within the same business day.
- Requires low minimum credit score.
- Less paperwork than most lenders.
Cons
- Fixed-fee structure means early repayment will not save interest.
- Requires frequent (daily or weekly) repayments.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 1 year.
- Minimum annual revenue: $100,000.
- No bankruptcies in the past 2 years.
May fund quickly
Our picks for
Lines of credit
Financing you can draw from up to a set limit. Pay interest only on borrowed amount.
BlueVine - Line of credit
Est. APR
15.00-78.00%
Min. Credit Score
600
BlueVine's line of credit provides fast working capital for short-term borrowing needs.
Pros
- Cash can be available within 12 to 24 hours.
- Multiple term lengths for different financing needs.
Cons
- May require weekly repayments.
- Requires personal guarantee.
- Not available in North Dakota, South Dakota or Vermont.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 6 months.
- Minimum annual revenue: $120,000.
May fund quickly
Fundbox - Line of credit
Est. APR
10.10-79.80%
Min. Credit Score
600
Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.
Pros
- Cash can be available by the next day.
- Low minimum credit score requirement.
Cons
- Rates are high compared to traditional banks.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 6 months.
- Minimum annual revenue: $100,000.
May fund quickly
OnDeck - Line of credit
Est. APR
11.00-61.90%
Min. Credit Score
600
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
Pros
- Cash can be available within the same business day.
- Requires low minimum credit score.
- Less paperwork than most lenders.
Cons
- Fixed-fee structure means early repayment will not save interest.
- Requires weekly repayments.
- Requires personal guarantee.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 1 year.
- Minimum annual revenue: $100,000.
- No bankruptcies in the past 2 years.
May fund quickly
Our pick for
Equipment financing
A loan used to purchase new or used equipment.
Triton Capital - Equipment financing
Est. APR
4.99-25.00%
Min. Credit Score
600
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semi-annually.
Cons
- Typically requires a personal guarantee and UCC lien.
- Requires high minimum annual revenue.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: Two years, but startups may be eligible (with higher costs).
- Minimum annual revenue: $250,000.
How Much Do You Need?
Annual percentage rates (APRs), loan term and monthly payments are estimated based on analysis of information provided by lenders and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers' credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term and credit history. All loans are subject to credit review and approval.
Choosing the best small-business loan
Funding options for qualified business owners include bank loans, SBA loans, term loans, business lines of credit, invoice factoring and equipment financing. You typically need a year or more of history and revenue to qualify for financing. Startups operating for less than a year can consider other financing options.
The best loan for your small business will depend on a variety of factors, such as:
- Why you need funding.
- How fast you need access to capital.
- How much capital you need.
- Your business’s qualifications.
- Total cost of debt.
Learn more about some of the most popular types of small-business loans below.
Types of small-business loans
Loan terms, interest rates and qualifications vary by lender, but here are the features you can generally expect to find with the different types of small-business loans.
Bank loan
Banks can offer a variety of types of small-business financing, including term loans, SBA loans and lines of credit. To qualify for a bank loan, you’ll typically need a strong personal credit score (starting in the 700s), several years in business and a solid track record of business finances such as strong cash flow. In some cases, banks will require collateral.
- Loan amounts: $10,000 to $1 million.
- Approximate APR range: 2.54% to 7.02%.
- Best for: Working capital, expanding your business.
SBA loan
The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
- Loan amounts: $30,000 to $5 million.
- Approximate APR range: 5.5% to 8%.
- Best for: Large one-time and longer-term investments, purchasing real estate or equipment, buying existing businesses and refinancing debt.
» MORE: NerdWallet’s guide to SBA loans
Business term loan
Online lenders offer term loans of up to $500,000. For a short-term loan, the repayment period typically ranges from three to 18 months, while a long-term loan repayment can extend up to 10 years or longer in some cases. Business owners can also find financing that can be used for specific items, like equipment or inventory.
- Loan amounts: Up to $500,000.
- Approximate APR range: 9% to 99%.
- Best for: Large one-time investments.
Business line of credit
A business line of credit provides access to flexible cash. Similar to a credit card, lenders give you access to a specific amount of credit (say, $100,000), but you don’t make payments or get charged interest until you tap into the funds.
- Credit line range: $6,000 to $250,000.
- Approximate APR range: 10% to 99%.
- Best for: Managing cash flow, handling unexpected expenses and financing short-term business needs.
Invoice factoring and invoice financing
Invoice factoring turns business owners’ unpaid invoices into immediate cash. You sell the invoices to a factoring company, which is paid when it collects from your customers. If you prefer to maintain control over your invoices, invoice financing is an alternative to factoring. Time to funding can be relatively short with invoice factoring or financing.
- Financing amounts: Up to $5 million.
- Approximate APR range: 10% to 79%.
- Best for: Managing cash flow, short-term financing.
Equipment financing
Equipment financing is a form of asset-based financing where the equipment itself serves as collateral for the loan. You can get an equipment loan equal to up to 100% of the value of the equipment you’re looking to purchase — depending on the lender and your business’s qualifications — which you then pay back over time, with interest.
Some lenders may also pay for soft costs, such as installation, delivery, warranties, assembly and other similar expenses associated with getting your equipment up and running. Although certain lenders will finance these costs on top of the full value of your equipment, others may fund only a percentage of the cost of the equipment — 80%, for example — and devote the remainder of the loan (20%) to your soft costs.
- Loan amounts: Up to 100% of the value of the equipment, plus soft costs.
- Approximate APR range: 4% to 30%.
- Best for: Purchasing machinery and equipment.
Additional funding options
Business financing options other than traditional loans or lines of credit include personal loans for business or business credit cards. A personal loan for business is a good option if your business is still young and you don’t qualify for traditional financing. Personal-loan providers look at your personal credit score and income instead of your business history.
A business credit card offers revolving credit, making it a solid option for short-term expenses. It can also be easier to qualify for a business credit card than a small-business loan. While credit limits tend to be smaller than a line of credit, a business credit card may offer rewards, such as cash back or travel points.
How do I get a business loan?
Every lender has different underwriting guidelines, but they generally consider similar factors, including personal credit score, your time in business and annual revenue. Lenders also consider your cash flow and ability to repay the debt.
Depending on the lender, you’ll be asked to share financial documents like tax returns, bank statements and cash-flow statements as part of the application process.
» Read more about how to get a small-business loan
Additional steps to qualify for a small-business loan
Having strong personal credit can help you qualify for lower rates and give you more financing options. If you don’t need business financing right away, consider building your credit score. On the other hand, if you need more immediate access to financing, you may still be able to qualify for a business loan with bad credit.
If you don’t know your credit score or want to monitor it consistently, several personal finance websites, including NerdWallet, offer free credit score access. Track your progress and open more doors for financing your business.
Why online lenders?
Only about 1 in 5 businesses that apply for a loan from a big bank are approved. We help business owners by working with online lenders that simplify the loan application process and approve more small businesses. Many online lenders also offer competitive rates and faster funding than some banks.
Why Fundera by NerdWallet?
Fundera by NerdWallet gives business owners the tools and advice they need to build great businesses. Fundera gets a percentage from the financial provider once you’re funded but isn't incentivized to work with certain financial providers over others. Our job is to offer pressure-free advice to help you find your best-fit lending product.
Last updated on November 30, 2021
To recap our selections...
Small-Business Loans 2022: Compare Financing and Apply
- TAB Bank - Term loan: Best for Bank small-business loans
- PNC Bank - Line of credit: Best for Bank small-business loans
- SBA 7(a) loan: Best for SBA loans
- Credibility Capital - Online term loan: Best for Online term loans
- Funding Circle - Online term loan: Best for Online term loans
- OnDeck - Online term loan: Best for Online term loans
- BlueVine - Line of credit: Best for Lines of credit
- Fundbox - Line of credit: Best for Lines of credit
- OnDeck - Line of credit: Best for Lines of credit
- Triton Capital - Equipment financing: Best for Equipment financing
Frequently Asked Questions
Like any type of credit, qualifying for a business loan depends a lot on your personal credit score, which can signal to lenders how likely you are to repay the loan. Small-business lenders also consider factors like how old your business is and how much revenue it earns. Learn how to qualify for a small-business loan in five steps.
Credit score requirements vary by loan and lender. Banks often require a credit score in the 700s for a small-business loan. But some online lenders will fund loans for borrowers with credit scores in the low- to mid-600s.
To qualify for an SBA loan, you typically need a good personal credit score (690 or higher), though some SBA loan programs are available to business owners with bad credit.
Startups less than a year old typically won't qualify for traditional small-business loans. The SBA does have two loan programs that cater to startups: SBA microloans and SBA Community Advantage loans.
Consider alternative financing like business credit cards, personal loans or grants if you can’t secure a small-business loan for your startup. See our list of startup funding options.