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Best Small Business Loans of 2024

Review Updated
Brittney Myers
Author: Brittney Myers
Brittney Myers
Brittney Myers
Writer

Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.

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Small business loans can be a great way to get necessary funding for your business. However, there are a lot of factors that go into picking the best loan, from the rates and fees to the repayment structure.

In this guide, we'll discuss the different types of business loans and what to look for when comparing options. We'll also provide some of our top picks to help you start your search.

Top picks for small business loans

As of Oct. 01, 2024
Lending Partner Min. Credit Score Loan Amounts Apr Range Next Steps
Credibly
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 500 or better, depending on the loan type Loan Amounts: $5,000 to $600,000 APR Range: Factor rates starting at 1.11 for applicants with excellent credit only
Check Rates for Credibly
First Citizens Bank
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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Min. Credit Score: Normal credit approval applies Loan Amounts: $0 to millions APR Range: Depends on loan type and term
Read Review
Bluevine
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 625 Loan Amounts: Up to $500,000 APR Range: Depends on rate and amount of credit line used
Check Rates for Bluevine
OnDeck
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 625 Loan Amounts: Line of credit: $6,000 - $100,000, Term loan: $5,000 - $250,000 APR Range: Line of credit: 55.9% APR average, Term loan: 56.1% APR average
Read Review
Funding Circle
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Min. Credit Score: 660 Loan Amounts: $25,000 to $5 million APR Range: Start at 7.9% for highly-qualified borrowers
Read Review

Best for businesses with high incomes but low credit scores

Credibly

Best for High Income/Low Credit Score Businesses

Apply Now for Credibly
Logo for Credibly
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Apply Now for Credibly
Minimum Credit Score
500 or better, depending on the loan type
Loan Amounts
$5,000 to $600,000
APR Range
Factor rates starting at 1.11 for applicants with excellent credit only
Term Length
3 months to 24 months

Credibly offers a variety of financing types to businesses that may not otherwise qualify with another lender. They offer the financing both directly and through a network of lending partners.

  • Loans available to business owners with less-than-perfect credit scores
  • Loan officers that emphasize the importance of only borrowing what you need
  • Five specific types of financing offered
  • Fast approval and funding
  • Daily, weekly, and monthly payment options
  • High annual income requirement
  • Startups typically don't qualify for funding
  • Risk of losing collateral
Read Full Review

Best for SBA loans and businesses that need in-person assistance

First Citizens Bank

Best for SBA Loans w/ in-person assistance

Read Review
Logo for First Citizens Bank
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
= Good
= Fair
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Read Review
Minimum Credit Score
Normal credit approval applies
Loan Amounts
$0 to millions
APR Range
Depends on loan type and term
Term Length
Up to 25 years

First Citizens Bank is an excellent small business lender with a wide variety of loan types, including all of the major SBA loans as well as some proprietary small business loan products. It has excellent customer service through its vast branch network, and could be a great fit for businesses located within the states where the bank operates.

  • Variety of loan products
  • Large branch network
  • Highly rated customer service
  • Application isn't fully online
  • Branches are available in fewer than half of U.S. states

Best for business lines of credit

Bluevine

Great for: Business lines of credit

Apply Now for Bluevine
Logo for Bluevine
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Apply Now for Bluevine
Minimum Credit Score
625
Loan Amounts
Up to $500,000
APR Range
Depends on rate and amount of credit line used
Term Length
Line of credit: 6-12 months, Term loan: 24 months

Bluevine specializes in business lines of credit that are easy to apply for, and also offers term loans through banking partners. It can be a great choice for businesses that can meet Bluevine's income requirements and want access to working capital as needed.

  • Quick access to funds
  • Easy application process
  • Up to $250,000 in funding
  • Short repayment terms
  • High revenue requirement
  • Not for newer businesses
Read Full Review

Best for established business owners with average credit who can't find cheaper financing

OnDeck

Best for average credit and cheap financing

Read Review
Logo for OnDeck
Rating image, 3.5 out of 5 stars.
3.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Read Review
Minimum Credit Score
625
Loan Amounts
Line of credit: $6,000 - $100,000, Term loan: $5,000 - $250,000
APR Range
Line of credit: 55.9% APR average, Term loan: 56.1% APR average
Term Length
Up to 24 months

OnDeck offers short-term loans to established business owners with at least average credit, provided they can meet the revenue requirement. Repayment terms cap at 24 months and APRs are very high, so these loans are best for owners without cheaper options who can repay the loan quickly.

  • Multiple loan types
  • Accepts average credit scores
  • No prepayment fee
  • APRs are extremely high
  • High revenue requirement
  • Personal guarantee required

Best for well-qualified, established businesses

Funding Circle

Great for: Best for well-qualified, established businesses

Read Review
Logo for Funding Circle
Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Read Review
Minimum Credit Score
660
Loan Amounts
$25,000 to $5 million
APR Range
Start at 7.9% for highly-qualified borrowers
Term Length
Up to 25 years

Funding Circle pairs businesses that have been in business for at least two years with individual investors for term loans, lines of credit, and SBA loans. Eligible business must have at least fair credit, with a minimum accepted credit score of 660.

  • Competitive rates for highly qualified borrowers
  • Funding in as little as two business days
  • Costly origination fees
  • Businesses must be in operation for a minimum of two years
  • Requires a lien on business
  • Minimum credit score may be higher than some competitors

How to choose a small business loan

Here are a few factors to consider when deciding on a business loan:

  • Structure: Do you want a one-time loan or a recurring line of credit? What type of collateral, if any, do you want to put up? Are you willing to personally guarantee the loan? All of these questions will factor into which type of business loan you choose.
  • Repayment: Each loan and lender will have its own repayment structure. You may need to make daily or weekly payments, or get away with monthly ones. Consider how often you want to make payments before choosing a loan.
  • Cost: Interest rates and other fees can all impact the cost of a loan. These costs will depend not only on the type of loan you choose, but on the specific lender, your credit history, and even your business's revenue. It's best to compare multiple loan offers to ensure you get the most affordable loan.
  • Timing: When you urgently need a loan, you may be more concerned with how quickly you can get funding over other factors. Just make sure you aren't letting haste lead you into a bad deal.

What is a business loan?

A business loan is an agreement between your business -- or you, as the owner of that business -- and a lender for an agreed-upon amount. The lender will give you the money, and in return, you agree to repay that money at specific intervals. You will likely also need to pay additional interest fees, based on an APR (annual percentage rate) disclosed during the application process.

Types of small-business loans

There are a variety of small business loan options depending on your needs and qualifications.

1. Term loan

The simplest form of small business loan is a term loan. Think of this as similar to a basic personal loan. You'll receive a set amount of money, and you'll need to repay it in regular, equal installments. Your interest rate will be set at the time of disbursement and your payments won't change for the duration of the loan. Once you repay the loan, you're done and the account is closed.

2. Line of credit

A line of credit is sort of like a reusable term loan, or perhaps like a credit card. You can draw on the line of credit, then repay the amount borrowed to free up funds. You can then draw on the line of credit again at a future date. Exactly how often or how much you can draw at a given time will vary by loan and lender.

3. SBA (Small Business Administration) loan

An SBA loan is a term loan guaranteed by the Small Business Administration and offered by various banks and lenders. SBA loans are good for lenders because the guarantee from the SBA reduces the risk; if you default on the loan, the lender doesn't lose as much money. SBA loans are also good for borrowers, since the reduced risk allows lenders to offer better rates, lower down payments, and more flexible requirements.

4. Equipment loan

Business owners who specifically need a loan to purchase new equipment may want to look into dedicated equipment loans. These loans are typically structured like a regular term loan, except the equipment you buy will act as collateral for the loan. This often means lower rates and fees, though a down payment may still be required in some cases.

Alternative business funding options

If a small business loan isn't right for your company, consider these other ways to finance your business.

Small business credit cards

I love using small business credit cards as a source of short-term funding for three reasons:

  1. It can be free. If you pay off your balance in full before the due date, most cards won't charge you interest. If you need to carry a balance, you can get a card with an intro 0% APR deal to avoid interest fees on that balance, too.
  2. They're reusable. Credit cards are like a line of credit; as long as you keep paying them off, you can use them again and again. In fact, using and paying off your card on time every month is a great way to build credit.
  3. You can earn rewards. When the business budget is tight, earning that 2% to 5% cash back on your big expenses can go a long way.

Check out our best small business credit cards to find the right fit for your business.

Outside investors

Many businesses grow with the help of financing from investors. This could be as simple as taking on a business partner, or as complex as finding an angel investor or venture capitalist. Just keep in mind that most investors will want some sort of say in how your business is run. At the very least, you'll need to repay your investors with regular dividends or a percentage of your revenue.

Fundraising and crowdsourcing

Plenty of small businesses get off the ground with a little help from friends and family. (If you're not going to pay that help back, then they're donors, not investors.) In today's digital age, you can also look for donations from the world at large on a crowdsourcing platform like Kickstarter or Indiegogo.

Personal loans

If your business revenue isn't great but your personal credit is, you could potentially qualify for a personal loan even if a small business loan isn't an option. Most personal loans are term loans that typically range from 24 to 60 months, though shorter and longer loans are available. Interest rates will depend heavily on your credit and income.

Merchant cash advance (MCA)

A merchant cash advance is very similar to a personal cash advance. It's an extremely expensive type of short-term financing that promises a portion of your sales revenue as repayment. The pro of this type of financing is that your personal credit isn't much of a factor. The downside is that your interest rates can easily hit triple digits. This should be considered last-resort funding, and only if you have absolutely zero other options.

Fees and terms you can typically expect

The terms and fees you get with your loan will depend on a lot of factors. However, here are some general points to consider when comparing your options.

Fees to watch out for

  • Origination fee: Many loans, especially term loans, come with an origination fee. It's generally considered to be for the administrative costs of the loan. Not all loans charge this fee.
  • Interest fee: The main fee you'll pay on any loan is the interest fee. This will depend on your interest rate. The higher the interest rate, the more fees you'll pay.
  • Factor rate: Some financing products, like MCAs, don't provide an interest rate. Instead, they provide the factor rate. Multiplying the factor rate with the principal amount tells you the total you'll need to pay back. From there, you (or an online calculator) can determine your APR.
  • Prepayment fee: Some lenders may charge you a penalty fee for paying off your loan early. That's because paying your loan off early usually cuts down on how much interest you pay overall.
  • Application fee: This isn't a super common fee, but a few lenders may charge a fee just to apply for a loan. (I'd personally avoid these lenders.)

Figuring out your repayment terms

Broadly, the loan terms are all the terms and conditions that apply to your loan agreement. More specifically, we usually use the phrase to refer to the repayment terms, including the APR and payment frequency.

How long you have to repay your loan will vary based on a lot of factors, starting with the type of loan. An SBA loan could have a long repayment term of 10 years or more. Many small business term loans will have shorter repayment periods of around two years. A line of credit could have an even shorter repayment period of a year or less.

Your business loan agreement will spell out all of the repayment terms. Be sure to read through it carefully. You want to pay attention not just to your payments or how long the loan will last, but also to your total overall payment and your total interest.

What you need to apply for a small business loan

The specifics of a loan application will depend on the kind of loan. In general, though, you'll need this information:

  • Owners' personal information: If you're the only business owner, then you just need your personal info. If there are multiple owners, the lender may want everyone on the application. In many cases, the owner will need to undergo a personal credit check.
  • Business tax ID number: Depending on the structure of your business, this may be your EIN (Employer Identification Number) or your personal Social Security number (if you're a sole proprietor).
  • Business checking account info: The money you borrow will need to be deposited into a business checking account. Most lenders will also require payments to be made via debit card or ACH transfer from a small business bank account.
  • Business banking statements: You may need at least three months' worth of bank statements to prove your company's annual revenue. Depending on your business and the lender, you may require more in-depth profit-and-loss documentation.

In summary: Our top picks for small business loans

  • Best for businesses with high incomes but low credit scores: Credibly
  • Best for SBA loans and businesses that need in-person assistance: First Citizens Bank
  • Best for business lines of credit: Bluevine
  • Best for established business owners with average credit who can't find cheaper financing: OnDeck
  • Best for well-qualified, established businesses: Funding Circle