Best Small Business Loans in 2023
A small business loan can be extremely beneficial for boosting your overall cash flow and company growth. That being said, it can be overwhelming to decide what lenders and loan types are best for you.
We understand how stressful it is to compare lenders, interest rates, and requirements. You might be left thinking, how do I know I’m truly getting the best deal on the market?
If you are on the fence about getting a small business loan, this article will guide you through the top 14 small business loans in 2023 and what you can expect.
Our team of experts has spent days researching and comparing the best options for a variety of business goals. Save time and stress by diving into this ultimate guide to small business loans!
Top 14 Best Small Business Loans
- OnDeck: Best for short-term loans
- Lendio: Best for lender comparison
- Kabbage: Best for AMEX lines of credit
- BlueVine: Best for start-up businesses
- National Funding: Best for small-to-medium-size businesses
- Fundbox: Best for quick approvals and borrowers with a bad credit score
- TD Bank: Best for healthcare workers
- Funding Circle: Best for financially stable businesses
- Bix2Credit: Best for multiple loan options
- Triton Capital: Best for equipment financing
- US Small Business Administration: Best for SBA loans
- TAB Bank: Best for bank small business loans
- Credibility Capital: Best for established businesses
- PNC Bank: Best for bank lines of credit
#1. OnDeck: Best for short-term loans
OnDeck is a well-known lending service that offers term loans and lines of credit. Term loans can range between $5,000 to $250,000 with a repayment window of up to 24 months. Lines of credit range between $6,000 to $100,000 with a 12-month repayment period. If you opt for a line of credit, the repayment period will start over upon every withdrawal.
If you are interested in OnDeck, you’ll need to research the 700 industries they serve to ensure you are eligible. Small businesses in Nevada, North Dakota or South Dakota are not eligible for OnDeck’s services.
Pros:
- High cash potential for term loans and lines of credit
- Same day funding
- Requires a minimum credit score of 625
Cons:
- $100,000 minimum business revenue annually
- Must be operating for one year or more
- Does not lend to all 50 states
#2. Lendio: Best for lender comparison
If you are a small business owner looking for a reputable loan comparison marketplace, Lendio connects you with over 75 online lenders after a quick application process. Lendio offers nearly all types of small business loans including SBA loans, equipment financing, merchant cash advances, invoice financing and more.
As a marketplace, Lendio has minimal terms and requirements so you’ll need to explore the offerings for each specific lending partner.
Pros:
- Quick application process with access to 75 lenders
- A large variety of loan types are available in one marketplace
- Loan amounts to $500 to 5 million
- Required 6 months in business
- A minimum credit score of 560
Cons:
- You might run into prepayment penalties with some lenders
- The funding timeline will differ depending on lender
#3. Kabbage: Best for AMEX lines of credit
If you want a line of credit backed by American Express, Kabbage is a reliable option. They offer a wide array of cash flow management tools to small business owners, so you can reach your goals with efficiency and ease. Borrowers can apply for lines of credit between $2,000 to $250,000, with repayment between 6 to 18 months.
Keep in mind that borrowers are assigned monthly fees that will be determined by their eligibility and outstanding balance. Charge fees are between 0.25 to 3.50%, depending on your term length.
If you are interested in seeing your cash flow statement, Kabbage has plenty of free tools for borrowers on their mobile app and website.
Pros:
- Reputably backed by AMEX
- Zero prepayment penalties
Cons:
- Monthly fees are required for unpaid balances
- A personal guarantee is required
#4. BlueVine: Best for start-up businesses
BlueVine is a FINTECH company that specializes in serving US-based small businesses. If you are a small business owner looking for a business line of credit and a checking account, BlueVine is a great option.
If you want to boost your cash flow on an as-needed basis, BlueVine offers financing options anywhere from $6,000 to $250,000. Repayment terms are split between Flex 6 and Flex 12 options, which are 26 weeks or 12 months periods. After 46 days on the Flex 6 structure or 90 days on the Flex 12 structure, you have the opportunity to increase your credit line.
Keep in mind that BlueVine charges fees on a weekly or monthly basis. Borrowers can expect to pay 1.7% every week, or 7% every month for a line of credit withdrawal.
Pros:
- Eligibility for business open for six months
- Financing options up to $250,000
- A minimum credit score of 600
Cons:
- Weekly or monthly fees
- Business revenue requirements
- Not available in North or South Dakota
#5. National Funding: Best for small-to-medium-size businesses
If you are looking for working capital loans, National Funding offers small business loans and small business financing options between $5,000-$500,000. The average terms are as short as four months and as long as two years.
National Funding also offers equipment financing for borrowers with a minimum credit score of 575. If you work with National Funding, you’ll receive benefits for paying off your loans early. Borrowers that pay their balance in full within the first 100 days with receive a 7% discount on their remaining balance.
Borrowers that opt for equipment financing will receive a 6% discount for balance repayment at any time during their term. If you are looking for online lenders that offer cash-back benefits, National Funding is a reputable option to check out.
Pros:
- Discount for early repayment
- Loan funds up to $500,000
- A minimum credit score of 600
Cons:
- Borrowers must make daily or weekly payments
- Must meet annual income requirements of $250,000
- High borrowing costs in some situations
#6. Fundbox: Best for quick approvals and borrowers with a bad credit score
Fundbox is an online lending service offering term loans or a business line of credit. Since it’s a lending platform, application and approval are expedited. In some cases, funds are available for next-day use.
Term loans are available up to $150,000 with repayment of 24 weeks or 52 weeks. Business lines of credit from Fundbox have the same terms as their small business loans.
A perk of Fundbox is their Insight Advantage Program which lets borrowers view cash flow predictions and their combined balance by connecting business bank accounts. If your cash flow falls below the loan program threshold, borrowers will be alerted through the platform.
Pros:
- Quick approval process
- A minimum credit score of 600
- Funding on the next available business day
Cons:
- Short-term repayment options
- Considerably low business credit options
- A term loan is not yet available for all applicants due to beta testing
#7. TD Bank: Best for healthcare workers
TD Bank offers credit cards, business checking accounts, SBA loans, business lines of credit, and small business term loans. A term loan will range between $10,000 to $1 million with repayment terms between one to five years. Credit lines will run as low as $25,000 and as high as $500,000.
If you are interested in SBA loans, you can get approval directly through TD Bank. On average, their loans are up to $5 million with terms of 25 years or less. This is a great option for healthcare professionals since TD Bank offers additional financing options for businesses in eligible fields.
Keep in mind that loan applications for $100,000 or more must take place in person. TD Bank has branches around the United States, so make sure to check if there is one near you.
Pros:
- Options for a term loan, lines of credit and SBA loans
- Mobile banking and easy online application process
- Additional financing options for healthcare professionals
Cons:
- Business must be open for at least one year
- Branches in 16 states
- Must apply in person for loans over $100,000
#8. Funding Circle: Best for financially stable businesses
Funding Circle is a direct lender offering a simple application process and quick funding. A term loan from Funding Circle will run between $25,000 to $500,000 with repayment from six months to five years. A business line of credit will start at $6,000 and max out at $100,000.
SBA terms from Funding Circle are between $25,000 to $500,000. Funding Circle is an SBA-approved lender and borrowers can expect repayment terms of up to 10 years.
Funding Circle requires an additional fee of a 3.49%-6.99% payment of a borrower’s approved loan amount. This is a downfall for some borrowers, however, it’s only a one-time fee upon initiation.
Pros:
- Large loan amounts for your small business
- Receive funding in 48 hours or less
- No minimum annual revenue is required
Cons:
- Must be in business for 2 years
- Loan programs require an upfront origination fee
- A minimum credit score of 660
#9. Bix2Credit: Best for multiple loan options
Bix2Credit offers three main loan types for small business owners including a term loan, a working capital loan, and commercial real estate loans. Working capital loans will range between $25,000 to $2 million dollars. On the other hand, term loans range from $25,000 to $500,000.
Borrowers that opt for working capital loans to boost cash flow will make payments daily, weekly, or bimonthly. Term loans are repaid in a similar fashion, except they are spaced out over the course of 12 to 36 months. Commercial real estate loans range between $250,000 to $6 million with monthly payments for terms of 12 or 36 months.
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Pros:
- Flexible qualification requirements for working capital loans
- The average minimum annual requirement of $100,000
- Quick application, approval, and funding
Cons:
- Less flexible qualification requirements for term loans and commercial real estate loans
- Working capital loans will be repaid daily, weekly, or bimonthly
- Commercial real estate loans can have long approval windows of up to 30 days
#10. Triton Capital: Best for equipment financing
Triton Capital is a great option for equipment financing with loan maximums of up to $250,000. Borrowers can qualify across a range of industries and expect quick approval and fund delivery.
The minimum credit score requirement is 600, and businesses must be open for at least two years. In some cases, startups are eligible if you are willing to pay higher costs. Small businesses must bring in at least $250,000 a year to qualify.
Pros:
- Funding within one to two business days
- No prepayment penalty
- Multiple repayment options
Cons:
- High minimum annual income
- May require a personal guarantee and UCC lien
#11. US Small Business Administration: Best for SBA loans
The US Small Business Administration is a great option for SBA loans with favorable rates and reasonable terms. If you have good credit and business finances, but don’t qualify for traditional bank loans, SBA loans are important to consider.
The maximum loan amount ranges up to $5,000,000 with a minimum credit score of 650. On average, the annual percentage rate will run between 8.50-11.00%. Some requirements include first using alternative resources including your personal assets. Borrowers must be for-profit US businesses and meet the financial requirements of the individual lender.
Pros:
- Term loans and lines of credit are available
- Interest rate caps
- Long-term repayment options
Cons:
- Personal guarantee required
- Collateral may be required
- Longer wait times than traditional lenders
#12. TAB Bank: Best for bank small business loans
TAB Bank is known for offering competitive interest rates on its small business loans. If you have a credit score of 650 or higher, you can expect quicker funding than some SBA loan options. The loan maximum at TAB Bank is $200,000 with an average APR of 8.99-35.99%.
Pros:
- No prepayment penalty
- Payment terms between 12 to 60 months
- Offers an easy online application process
Cons:
- Relatively high minimum credit score requirements
- Origination fee and documentation fee on every loan
- Requires personal guarantee and business lien
#13. Credibility Capital: Best for established businesses
Credibility Capital is known for offering relatively low-cost small business loans for borrowers with a strong credit history. The max loan amount is $500,000 with a minimum credit score requirement of 650. On average, APRs will range between 7.99-24.99%.
Borrowers must have a business that’s open for two years or more with zero bankruptcies in the past five years. The minimum annual revenue requirements are $200,000. Credibility Capital boasts competitive interest rates compared to other online lenders, so they can be a great option for small business financing.
Pros:
- Competitive rates
- No prepayment penalty
- Quick approval and funding within 5 days
Cons:
- High annual revenue
- Personal guarantee and business lien
- Not available in all 50 states
#14. PNC Bank: Best for bank lines of credit
PNC Bank is a reliable option for a business line of credit, offering revolving cash flow opportunities on an as-needed basis. The only downfall is that you’ll need to meet business credit requirements and be in business for at least three years.
The loan maximum is $100,000 with a high credit score minimum of 720. The average APRs range between 13.74% to 15.74%. Usually, APR at PNC bank is established by the market prime, with an additional 7.49%-9.49%.
Pros:
- Competitive interest rates for lines of credit
- Same-day funding available
- Monthly repayment with zero set term
Cons:
- High minimum credit score and three years in business
- A personal guarantee is required
- Not all states and industries are eligible
How do Small Business Loans Work?
A small business loan is an aspect of commercial financing given to businesses that qualify from online lenders, traditional banks, and credit unions.
Business owners can use these funds for a variety of business needs, whether they need to maintain operations, increase cash flow, or get their company off the ground. The most common small business loans are used for working capital, equipment financing, or real estate purchases.
Borrowers will receive funds in a lump sum or through a recurring credit line. Repayment is set for an agreed-upon timeline with the addition of interest and lender fees. Borrowers will make payments on daily, weekly, bimonthly or monthly payments until the debt is paid off.
It’s important to note that a small business loan is either secured or unsecured. Collateral is required for a secured small business loan to ensure personal assets are available in case of repossession. An unsecured small business loan doesn’t require any collateral but does require a personal guarantee, ensuring you assume responsibility for any debt that’s not paid off.
Small Business Loan Types
There are a variety of business loans available to help companies reach their professional growth and outreach goals. Considering the many choices available, it’s important to do your research on loans to find which option best suits your needs.
SBA Loans
SBA Loans, or Small Business Administration loans, are small business loans that typically range from $30,000 to $5 million. Borrowers can expect low-interest rates and long repayment windows, sometimes up to 25 years. Common SBA loans include SBA 7(a) loans, SBA 504 loans and SBA micro-loans. Since these loans are government-backed, eligibility requirements are more in-depth and approval windows may be lengthy.
Term Loans
Terms loans can be used for a variety of business-related purchases and are available for both short and long-term timelines. Borrowers can expect to finance their loan within a set period of time, with repayment depending on your contractual agreement. Short terms loans can be anywhere between 3 to 18 months. On the other hand, long-term loans may be available for longer windows of up to 10 years. Business term loans range up to $500,000 with an average APR of around 9% or higher.
Lines of Credit
Unlike other loans where cash is supplied in a lump sum, lines of credit are regularly accessible to the business owner over a window of time. Borrowers can use a line of credit for a set period of time until they reach their draw period or monetary cap. If a borrower pays back a portion of their loaned credit early, they can access those funds again until their period ends.
Once the borrower’s timeline is over, they will be cut off from accessing funds and strictly focus on repayment. Unlike traditional business loans, business owners only pay interest on the amount of money they used in their line of credit. If you find that you don’t need the full amount, a line of credit can save you money compared to financing with term loans.
Lines of credit typically range from $2,000 to $250,000 with an average APR of 10% to 99%. If you need accessible money for unexpected purchases or extra cushioning in your cash flow, lines of credit are great for as-needed financing solutions.
Invoice Factoring and Financing
Invoice factoring is selling outstanding business invoices in exchange for lump sum compensation. Since invoices are sold at a discount, borrowers won’t receive a full cash reimbursement. Keep in mind that selling to a third-party factory company means they are now responsible for collections.
Borrowers will often use invoice factoring for short-term financing, especially if you don’t want to wait for the 30 to the 90-day invoice payment window. On average, APRs for invoice factoring will be between 10% to 79% for amounts up to $5 million.
Merchant Cash Advances
Merchant cash advances (MCAs) is a lump sum given to business owners usually within the merchant services niche. Lenders will allocate a portion of future sales receipts to the recipient. A merchant cash advance is paid back regularly from business sales or automatic clearing house payment on a daily or weekly basis.
Borrowers can expect to receive a set amount of cash based on the factor rate, usually ranging between 1.2-1.5. If your business brings in a high volume of sales but needs a boost in cash flow, merchant cash advances may be a good option. Remember to always assess repayment periods and the average daily credit card sales for your business to ensure you meet the proper criteria.
Equipment Financing
Equipment financing is a small business loan allocated to businesses for the purchase of equipment and machinery. Typically, this equipment is deemed essential for maintaining operations and regular maintenance. Equipment loans depend on equipment value and the down payment amount.
There are equipment financing opportunities for terms and limits up to $1 million for 25 years. Borrowers can expect a wide variety of interest rates depending on their lender, however, the typical range falls between 8-30% on average.
How to Choose the Right Small Business Loan
While most small business loans are created to be flexible for a variety of goals, it is still important to apply for the proper business loan based on your needs. Before starting the business loan application process, take a look at your current business and the main reasons you want to boost cash flow. Determine your goals before application to ensure you don’t waste any of your or the lender’s time.
If you want to invest in equipment, real estate, or employees, take note of those needs and which loans will work best. For example, real estate loans, merchant cash advances, or equipment financing. However, if you just want extra cash to support your operations, you may benefit from a line of credit or traditional business loans.
Business owners will want to factor in all the costs and features of their prospective loan. Compare different levels of risk, interest rates and repayment periods. Speak with your team or a financial professional to further clarify what loan makes the most sense for your goals and financial well-being.
Frequently Asked Questions About Small Business Loans
Is a small business loan hard to get?
This will depend on your unique situation as well as the loan you are applying for. Borrowers face difficulties getting small business loans or personal loans when they don’t meet the minimal lender requirements. This may include credit score, cash flow, annual revenue, and time in business.
How can I get an SBA loan?
You can get an SBA loan by going online and submitting an application to lenders that offer an SBA loan. We covered multiple lenders in this article that offer SBA loans for small businesses.
How do businesses qualify for SBA loans?
You will qualify for SBA loans by meeting lender requirements which usually include a minimum credit score, length of time in business, and annual revenue. Some SBA loans will offer flexible approval for startups, but you might have to pay more fees in return. If you are struggling to qualify, consider looking into SBA microloans.
What is the most useful type of loan for a small business?
The most useful type of loan for a small business will depend on your unique business and industry. However, many businesses benefit from raising capital to hire new staff members or upgrade their marketing campaigns. In some cases, you might need a real estate loan or equipment financing to cover brick n mortar expenses. The loan you choose should be catered to your most pertinent goals.
What is the minimum credit score for a small business loan?
The minimum credit score is usually between 500 to 600. However, some lenders will require a high credit score if they are lending you more money or offering funds at competitive interest rates. If you struggle with a poor credit history, seek out lenders that specialize in offering affordable loan options for bad credit.
