The best way to keep a small business alive is to make sure it has enough capital and if you are looking for best small business loan options then you are on the right page!
The most obvious and common sources of funding for small businesses are loans from banks or other financial institutions, but there are many more options that you may not be aware of.
According to Zippia, the loan approval rates for small businesses from large banks are only 13.8%. As such the alternatives we have for you will help you with financing your business.
It can be difficult for an entrepreneur who does not have the time or resources to research this topic themselves; luckily, we’ve done all the hard work for you!
Here is a list of our top ten best small business loans—the ones we recommend and what they are specifically best for:
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Best Small Business Loans
Here are our top 10 options based on:
- Best Overall – Kabbage
- Best Small Business Loans For Fast Approvals – Fundbox
- Best For Microloans – Kiva
- Best for Fast Funding – BlueVine
- Best Small Business Loans for Flexible Terms – SBG Funding
- Best For Low Credit Score Borrowers – National Funding
- Best For SBA Loans – Fundera
- Best for Short Term Loans – OnDeck
- Best Small Business Loans Marketplace – Lendio
- Best For Same Day Funding – Rapid Finance
1. Kabbage — Best Overall
Kabbage started in 2009 as an online platform that uses technology to link small companies with cash flow solutions.
It was recently acquired by American Express and now offers a new servicing platform called K Servicing that allows you to manage and pay your loans online.
Small businesses can use the bank’s services, which include payment processing loans, lines of credit, short-term loans, industry-specific loans, and PPP loans.
It features a simpler application procedure than a traditional bank, with less paperwork and fewer requirements.
Its mission is to provide small businesses with the funds they need in a simple and timely way.
You can apply for a loan online and have your application approved the same day.
To qualify for a Kabbage small business loan, you must have been in business for at least one year and have annual sales of at least $50,000.
There are no prepayment penalties or hidden lending costs, and loan durations generally range from 6 to 18 months.
Loan amounts and requirements vary by type of loan but typically range from $250,000 to $350,000.
Pros and Cons
Pros
- Transparent requirements for qualification
- There are several small business loan options available.
- No application fees
- A mobile app is available.
Cons
- You must have been in business for a year.
2. Fundbox — Best Small Business Loans For Fast Approvals
Fundbox is a small business loan platform driven by AI that offers lines of credit and short-term loans.
According to the company, you can obtain a credit decision in as little as three minutes, making it one of the quickest ways to be accepted for a small business loan with an online lender today.
Borrowers can link their business accounts to the Insights Advantage software to get cash flow estimates, check balances, and simulate business situations by inputting potential transactions.
To be eligible for a line of credit, the business must have used a relevant business bank account for at least three months prior to applying.
You can borrow just as much money as you need since Fundbox focuses on lines of credit.
Your line of credit funds can be transferred to your business checking account as soon as the following business day.
With this service, you can save money by paying off your amounts early and ahead of schedule, and there are no prepayment fees.
Pros and Cons
Pros
- Lines of credit of up to $150,000 are available.
- No prepayment penalties
- There are no minimum credit score or revenue criteria.
- Get a decision in minutes.
Cons
- High APR
- Maximum loan amounts are low.
3. Kiva — Best For Microloans
We picked this lender as the best option for microloans because you can borrow money at 0% APR and repay it over a three-year period.
Kiva was founded in 2005 with the goal of helping underserved communities and its members in obtaining the small business funding they need to achieve their goals.
Kiva lenders have financed more than $1.68 billion in loans to more than 4.2 million borrowers in 77 countries across the world thus far.
Kiva’s loan offering only allows you to borrow up to $15,000 in total.
You can apply online in 20 to 30 minutes and have access to their marketplace within 30 days, with the option to repay your loan over 36 months.
Pros and Cons
Pros
- Microloan interest rates start at 0%.
- Borrow money without paying any interest.
- Available in 77 countries
- Repayment terms of up to 36 months are available.
Cons
- It may take up to 30 days for your loan to be approved.
- Kiva allows you to borrow a maximum of $15,000
4. BlueVine — Best for Fast Funding
If you want immediate funding, BlueVine is the lender for you.
It has a line of credit that provides same-day financing and invoice factoring that provides next-day funding. Simply said, it is fast.
It all starts with an automated application procedure.
BlueVine can make a decision on your loan application almost instantly or within a few hours after you submit information about your company.
If you choose the line of credit, you can pay a modest wire transfer fee to get your funds in a matter of hours.
Otherwise, your funds should be available by ACH transfer the following business day.
To be clear, BlueVine has a lot more to offer than simply quick funding. Lines of credit and invoice finance are two types of flexible working capital it provides.
While it has higher revenue requirements than the other lenders on our list, BlueVine has very easy application requirements.
You can get invoice factoring with only three months in the company and a 530 personal credit score.
Pros and Cons
Pros
- Same-day financing option
- Large loans available
- Personal credit score criteria are minimal.
- Financing for startups is available.
Cons
- High revenue requirements
- In some states, availability is limited.
5. SBG Funding — Best Small Business Loans for Flexible Terms
For small businesses, flexibility is important. You don’t want to be tied down to a loan for a long period of time.
You also don’t want to be rushing to come up with the funds to repay a loan on time.
SBG Funding has a solution for you whether you require short, medium, or long-term funding.
We like that SBG Funding’s loan periods can be as short as six months or as long as five years.
SBG Funding’s flexibility extends beyond its terms. Depending on the loan, you can borrow up to $5 million.
This allows you to grow your business with this lender. You might need a $10,000 short-term loan to get started, but you’ll need a $1 million loan afterward.
With its lending options, SBG Funding can help you achieve your goals.
SBG Funding is also open to working with borrowers who have previously experienced credit problems.
The company claims that its term loans have an approval rate of 85 percent.
It can make a qualifying decision in as little as 24 hours and, in certain cases, provide funding the same day.
Pros and Cons
Pros
- Loans ranging from $5,000 to $5 million are available.
- Rates range from 5% to 35% annual percentage rate (APR).
- Fast approval
- To apply, you just need to have been in business for six months.
Cons
- Potential weekly repayments
- Fees aren’t disclosed.
6. National Funding — Best For Low Credit Score Borrowers
National Funding is a fantastic option for an easy business loan thanks to its simple application procedure, quick decision and funding timeline, and credit availability to customers with low credit scores.
Although other lenders on our list have the same or lower minimum credit score criteria, National Funding has historically been more willing to lend to those with poor credit than the rest.
Early payoff discounts are another advantage of a loan with National Funding.
Customers that pay off a working capital loan debt within the first 100 days get a 7% reduction on the total sum due.
This product is only available to subprime borrowers with a credit score of at least 600.
Because the high-end APR is one of the highest on the list, consumers with good credit will probably find better rates from Fundbox or BlueVine.
Pros and Cons
Pros
- Fast funding.
- Loans of up to $500,000 are available with no upfront costs
- 6–15-month loan terms
- Discounts for early payoff
Cons
- Short-term loans have to be repaid on a daily or weekly basis.
- High borrowing costs.
7. Fundera — Best For SBA Loans
Fundera is a small business funding marketplace that operates online. It specializes in SBA loans, equipment financing, term loans, business credit cards, and lines of credit, among other things.
It was founded in 2013 and, instead of lending money, it connects small businesses with the best loan options available.
It works with leading SBA lenders to provide 7(a) loans, 504 loans, and microloans.
You fill out a simple loan application and review dozens of loan options all at once.
The company then matches you with a lending expert who will learn more about your company and recommend the best loans for you.
You can compare the loans and pick the one that best suits your needs.
Your loan expert will be with you throughout the duration of your loan and will even help you in finding better loan options as your business grows.
Pros and Cons
Pros
- Numerous small business loan options are available.
- Loans range from $5,000 to $5 million
- The interest rate starts at 6%.
- Online application
Cons
- A minimum credit score of 550 is required
- As this is not a direct lender, you will be dealing with many lenders.
8. OnDeck — Best for Short Term Loans
OnDeck term loans are distinguished by their fast funding, commitment, and prepayment perks.
If you currently do business with this lender, they will waive any lingering interest rates and even waive the origination cost if you take out a new business loan.
Prepayment perks from OnDeck allow borrowers to pay off their loan in full while having the remaining interest waived without incurring any additional fees.
However, OnDeck puts a blanket lien on all of a small business’s assets and also asks borrowers to sign a personal guarantee, which states that the lender can go after the borrower’s personal assets if the loan is not paid back.
We picked OnDeck because they provide small business loans with funding as soon as the next working day.
This can be important for business owners who want urgent cash to meet operating expenses or pay for a vital piece of equipment.
Pros and Cons
Pros
- Funding can be obtained as soon as the next working day.
- Small business loans up to $250,000 and $100,000 credit lines
- A low minimum credit score is required.
- Loan application and approval online in a matter of minutes
Cons
- Applicants must have been in business for at least one year and have a minimum annual revenue of $100,000.
- A minimum credit score of 600 is required.
9. Lendio — Best Small Business Loans Marketplace
Lendio is a loan marketplace that will not lend you money directly, but we feel they excel in this area since they allow you to compare loan offers from more than 75 small business lenders.
Having the opportunity to have lenders compete for your business is the best way to ensure you get the best small business loan rate and conditions possible.
Although Lendio was founded in 2011, it has grown rapidly since then.
They claim to have financed 216,000 small business loans totaling more than $10 billion so far, and they have no intention of stopping anytime soon.
Lendio’s small business loan product allows you to borrow anything from $5,000 and $2 million, depending on your requirements.
You have one to five years to repay the loan, and your interest rate can be as low as 6%.
Lendio’s application procedure takes about 15 minutes, and you can get a decision the same business day, making it a quick and easy way to shop for a loan.
Pros and Cons
Pros
- SBA loans of up to $5 million are available.
- Terms up to 25 years
- Free cash flow management tools
- Funding can be obtained in as little as 24 hours.
Cons
- Depending on the lender, there are different eligibility conditions.
- Lendio does not directly lend money.
10. Rapid Finance — Best For Same Day Funding
Rapid Finance started as a technology-driven financial services company in Bethesda, Maryland, in 2005.
It helps small and mid-sized enterprises throughout the country with working capital.
The company offers SBA loans, small business loans, invoice factoring, business lines of credit, bridge loans, commercial real estate loans, and asset-based loans.
Business tools, small business guidelines, and a blog with insights and industry news are all available on the site.
Rates and terms vary by loan type, but small business loans normally have terms ranging from three to 60 months and require funding via a business bank account.
You can apply online or call a salesperson to get a quote in a matter of minutes. Some loans can be funded as soon as a few hours after the application is approved.
The funds can be used for various purposes, including business expansion, marketing, equipment leasing, debt consolidation, technological improvements, working capital, and more.
Pros and Cons
Pros
- No prepayment penalties
- Fast application procedure
- Positive reviews on customer service
- Multiple term lengths to meet the needs of different clients.
Cons
- Common repayments as often as daily
- Higher interest rates
Comparison
| Company | Best For | Borrowing limit | Best Feature | Rating |
|---|---|---|---|---|
| Kabbage | Overall best | up to $350,000 | No application fees | 3.5/5 |
| Fundbox | Fast Approvals | up to $150,000 | No prepayment penalties | 4.9/5 |
| Kiva | Microloans | up to $15,000 | Available in 77 countries | 2.7/5 |
| BlueVine | Fast Funding | $1 million | Same-day financing option | 4.3/5 |
| SBG Funding | Flexible Terms | up to $5 million | Approval rate of 85 percent | 5/5 |
Conclusion
Small business loans can be a crucial part of keeping your business running and growing.
In this article, we’ve highlighted some of the best small business loans for 2023.
We looked at different loan types offered by various lenders, so you can find the best option for your specific needs.
Whether you need same-day funding or want an SBA loan with longer terms, there’s something for everyone here.
FAQs
What is a small business loan?
A small business loan (or SBA loan) is a financing option for businesses that typically requires less documentation and collateral than traditional bank loans.
It can be used to fund expansions, pay off existing debt, upgrade equipment or facilities, and more.
How do I apply for a small business loan?
The application process varies depending on the lender you choose, but most lenders allow you to apply online.
After filling out your personal information and explaining what you need the money for, the next step is to provide documentation that verifies your business income and debt. You’ll also have to put up collateral that secures the loan.
What should I look for in a small business loan?
Lenders offer a variety of loans, so you’ll need to decide if you want an SBA loan, a line of credit, or another type.
You’ll also need to decide whether you want a short- or long-term loan and what your payment terms will be. Once you’ve decided on the specifics, it should be easier to find the right lender for you.
Amit Gupta is the founder of National Planning Cycles, a company that helps startups, individuals, and small businesses with their financial planning. He has a vast amount of experience in the finance sector, having managed Google Play accounts for some of the world’s most successful unicorns. Amit is an expert in his field, and he uses his knowledge to help others achieve their individual goals.
ARTICLE SOURCES
The National Planning Cycles is committed to producing high-quality content that follows industry standards. We do this by using primary sources, such as white papers and government data alongside original reporting from reputable publishers that were appropriate for the accuracy of information while still being unbiased. We have an editorial policy that includes verifiable facts with due credit given where applicable.
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