The Best Small Business Loans in 2017 (for All Purposes)

If you’re starting or expanding your business, getting a small business loan is essential. However, it can be overwhelming to figure out where you should apply and what type of loan is the best fit for your small business—not to mention that you should shop around to get the best offers. To help you out, we’ve researched over 30 different lenders and loan products and compiled a list of some of the best small business loans currently available.

Featured Best Small Business Loans

In This Article

Best Equipment Loans

Investing in long-term equipment and machinery is vital for your business, so we've listed some of the best options available for small business owners looking to finance equipment.

SBA 7(a) and 504 Loans

Provided you have good credit, SBA 7(a) and 504 loans offer some of the most competitive rates and terms in the market, making them a fantastic choice for purchasing equipment or machinery. Interest rates on 7(a) loans are capped at 6% to 9%, and 504 loans currently have interest rates around 4% to 5%, which is well below the market average on similar general purpose and equipment loans. With loan amounts up to several million, these loans can be used to purchase any expensive or long-term equipment you might need for your business. While you’ll need a good credit score to apply for either loan, the 504 loan can also be used for startups and new businesses.

One downside to getting an SBA loan is the funding time and application process. Many SBA loans require a lot of paperwork and documentation to apply, and you’ll need to get in touch with a bank in your area that makes these types of loans. Since the application is intensive, it will usually take one to a few weeks to receive a decision from the SBA, and then several more days to weeks to receive funding.

Best for: Borrowers with strong credit profiles and financially established businesses. Startups are eligible to apply to the 504 loan program.

  • 4% - 9% interest rates
  • Loans up to several million
  • Terms up to 25 years
  • Funds in several weeks
  • Strict eligibility requirements

Currency

Currency is a great option for an equipment loan if you can’t qualify for an SBA or bank loan due to your credit score or if you need to borrow more than $5 million. This lender specializes in equipment financing with loan amounts up to $15 million, so it’s an especially good choice for expensive equipment or machinery purchases. You can apply for term loans, lines of credit and cash advances through this lender. If you’re applying for a term loan, the only requirements are either a minimum credit score of 475 for short-term loans or $100,000 in annual revenue for long-term loans, making either a favorable solution if your credit score is not great.

One thing we like about Currency is that the lender also partners with eBay, allowing buyers to apply for financing directly through eBay’s website. This makes Currency very convenient if you frequently use eBay to buy equipment for your business. Through this platform, you can receive a loan decision within a few minutes, and if approved, you’ll be put in touch with a Currency loan specialist to finalize your funding options. The funding can be directly applied to your eBay purchase.

Best for: Borrowers who need to finance eBay equipment purchases, and borrowers with great credit profiles can qualify for very low rates. Also good for borrowers who need up to $15 million.

  • 3% - 35% APRs
  • Loan up to $15 million
  • Loan terms up to 6 years
  • Funds in as fast as 1 day
  • Lenient eligibility requirements

Best Working Capital Loans

Working capital loans can be used for inventory, accounts payable and wages. Below, we list some of the best options for working capital loans and lines of credit for small businesses.

Bank Line of Credit and SBA CAPLines

If you need financing for working capital, bank and SBA lines of credit are among the best available, with line amounts up to several million dollars and great rates -- but you’ll generally need a good credit score and a financially sound, established business to qualify. The SBA CAPLines program offers lines of credit up to $5 million, which is higher than you’d find at almost any alternative lender, and it has low interest rates between 6% to 9% (and depending on the bank where you apply, these rates could be even lower). CAPLines can be used for contracting work, seasonal inventory, construction and any other working capital needs.

Banks and credit unions can offer similar lines of credit with higher credit limits, but these may be harder to qualify for than the SBA program. If you already have a working relationship with a bank or credit union in your area, you should speak with them first about getting a working capital loan or line of credit. Many local banks and credit unions are eager to work with businesses in the community and may be more likely to overlook any flaws in your application. They can also offer lines of credit and loans up to several million dollars. At the end of of the day, you would be hard-pressed to find better options outside of bank and SBA working capital loans.

Best for: Creditworthy borrowers with established businesses who need access to significant capital, up to several million dollars.

  • Competitive APRs
  • Line amounts up to several million
  • Terms up to several years
  • Funds in several weeks
  • Stricter eligibility requirements

Kabbage

A line of credit from Kabbage is a great choice if your credit score has prevented you from qualifying for other working capital loans or lines of credit. The only eligibility requirements at Kabbage are that you must be in business for at least a year with $50,000 in annual revenue. The lender will also look at your business’s online and social media accounts to help approve you, making Kabbage a good fit for businesses with a strong online presence. You can link your online bank accounts (Chase, Wells Fargo, etc.), online credit card processing accounts (PayPal, Stripe, etc.), your vendor accounts (eBay, Etsy, Amazon, etc.) and your online accounting software (QuickBooks, Xero, etc.) to Kabbage during the application process.

You can borrow up to $100,000 with Kabbage, and while APRs are higher at 20% to 80%, they are better than what you’d get with a merchant cash advance, which may be one of the few things you can qualify if you have a particularly low credit score. Another advantage to using Kabbage is that you can get funds quickly: either instantly if you use PayPal or in a few days if you use a standard deposit bank account.

Best for: Borrowers who need a working capital line of credit, but have had trouble qualifying elsewhere, and businesses with a strong online presence.

  • 20% - 80% APRs
  • Lines up to $100,000
  • 6- or 12-month terms
  • Funds in as fast as 3 days
  • Lenient eligibility requirements

Best Startup Loans

Getting a loan to start a new business can be difficult as many lenders will require at least one to two years in business. Below we list some loan and financing options that cater to new entrepreneurs.

SBA Community Advantage Loans

If you thought you couldn’t qualify for an SBA loan as a startup, you’re wrong. SBA Community Advantage Loans are one of the best options available to startups and new businesses, provided you have a good to excellent credit score. These loans are a special type of 7(a) loan designed specifically for new and underserved businesses, meaning they offer the same competitive interest rates and terms as standard 7(a) loans. Interest rates are capped at 10%—which is lower than a new entrepreneur may find anywhere elsewhere—with loan amounts up to $250,000.

Another great thing about these loans is that they can be used for a variety of business purposes, making them great for the startup that needs a little bit of help with everything. You can use these loans for working capital, inventory, real estate, debt refinancing, equipment purchases and more. The application process is also simpler than other SBA programs, with a two-page application and approval within five to 10 days. While you may not have heard of this program, it’s a great option for any serious entrepreneur starting a business.

Best for: Entrepreneurs with good to great credit who want low rates and access to significant capital up to $250,000.

  • ≤10% interest rate (may be lower)
  • Loans up to $250,000
  • Loan terms up to 25 years
  • Funds in one to two weeks
  • Stricter eligibility requirements

Small Business Credit Cards

Small business credit cards are another excellent choice for startup financing, especially if you plan on making frequent, ongoing purchases. The great thing about small business credit cards is that the application is based on your credit profile -- that means you don’t need a certain annual revenue or a number of years in business to qualify -- so they are a perfect choice for the new entrepreneur. And unlike small business loans, you can earn rewards for making your regular business purchases, and if you pay your balance in full, you don’t have to worry about paying interest. And even if you don’t pay in full, average APRs are around 15% (which is better than many comparable options from online lenders). Chase, American Express and Capital One all offer small business credit cards with excellent rewards programs and sign-up bonuses.

Even if you don’t have a great credit score, you can still get a small business credit card for your startup. If you have a lower credit score, both Wells Fargo and BBVA also offer secured small business credit cards. While the perks and credit limits won’t be as good as with a standard business card, these cards can help you improve your credit score (provided you pay on time) so you can qualify for even better financing in the future.

Best for: Business owners planning on making frequent, ongoing purchases. Secured credit cards are also available for borrowers with fair to poor credit.

  • APR range: 13% - 20%
  • May offer sign-up bonuses
  • Some earn cashback or other rewards

Best Commercial Real Estate Loans

Buying property for your business is likely one of the largest expenses you’ll incur as a business owner. Thankfully, commercial mortgages offer competitive interest rates because the loans are secured by the real estate you’re purchasing.

SBA 504 Loans

According to Chris Hurn, CEO of Fountainhead Commercial Capital, SBA 504 loans are “one of the best kept secrets in commercial finance if a business owner wants to buy property.” We couldn’t agree more -- 504 loans offer competitive interest rates, reasonable maturities, very low down payments and large loan amounts. A 504 loan is actually composed of two separate loans: one from a bank for 50% or more of the loan amount and one from a Certified Development Company (CDC) for up to 40%. You’ll be required to put down at least 10% as a borrower, but compare this to a standard commercial real estate loan which requires 20% to 25%, and you’ll see this is a great deal.

Rates on the CDC loan are tied to the market, meaning that in a low-interest rate environment, you can get a below-average interest rate that’s fixed for the life of the loan. Rates on the bank loan are usually low since the bank is providing a lower loan-to-value ratio than on a standard commercial mortgage. Another benefit of using the 504 program is that you can use a 504 loan for both long-term equipment purchases and debt refinancing -- and 504 loans are available to startups.

Best for: Businesses looking to purchase real estate. Startups are also eligible to apply for 504 financing.

  • 4% - 5% interest rates
  • Loans up to $10 million
  • 10- or 20-year terms
  • Funds in several weeks to months
  • Stricter eligibility requirements

Bank Loans

A commercial real estate loan from a bank is also a great choice, particularly if you plan to purchase an investment property. While the 504 loan program is a fantastic program, it is only available to businesses that plan to occupy the space they’re buying, and most online lenders will not allow you to use their loans to purchase real estate. Banks, on the other hand, offer both traditional commercial real estate loans and investment property loans with competitive terms. Many national banks and credit unions, such as U.S. Bank, PNC Bank, Wells Fargo and Navy Federal Credit Union, offer specific investment property loans.

Because these loans will be secured by the real estate you’re buying, you’ll see lower rates than you would with a traditional loan. You can also choose between fixed or variable interest rates and terms between five to 25 years, making these loans more flexible than a 504 loan. One downside to using a bank loan is the large down payment requirement: most borrowers will need to put 20% to 25% down.

Best for: Established businesses purchasing real estate or commercial investment property.

  • Fixed or variable interest rates
  • Loans up to several million dollars
  • Terms up to 25 years
  • Stricter eligibility requirements
  • Funds in several weeks to months

Best Unsecured Business Loans

Getting an unsecured business loan is a little harder to come by, and as such, you’ll typically need to show strong personal credit and sound business financials to qualify.

Unsecured Bank Loan

Many brick-and-mortar banks have jumped on the online lending bandwagon, with many now offering unsecured online loans. The thing we like about these loans is that they have competitive interest rates and fast turnaround times. Wells Fargo, for instance, offers online unsecured business loans up to $100,000 with interest rates from 6.5% to 22.99%, and you’ll receive a credit decision immediately with the ability to get funds the next business day. PNC Bank also offers unsecured loans up to $100,000 with terms up to four years.

One downside to getting an unsecured business loan through a bank is that many banks will require that you have a deposit account with them to apply. However, if you already have a business checking account, it’s worth speaking with a representative at your bank to see if you can apply for an unsecured loan. Banks also prefer creditworthy borrowers, so you may have trouble qualifying if your credit score isn’t good.

Best for: Creditworthy borrowers who have existing business accounts with the bank they’re applying to.

  • 6% - 25% interest rates
  • Loans up to $100,000
  • Terms up to 5 years
  • Funds in 1 - 2 business days
  • Stricter eligibility requirements

Lending Club

If you can’t meet the requirements for an unsecured bank loan, Lending Club offers competitive unsecured loans and lines of credit up to $100,000 (you can borrow more if you’re willing to put up collateral). One thing we like about Lending Club is that APRs on their loan products start at 7.77%, which is lower than what many other alternative lenders offer. The lender also has a wide variety of maturities available from 3 months to 5 years, so finding a loan or line of credit that fits your timeline shouldn’t be an issue.

Lending Club is also upfront with their eligibility criteria: you need to be in business at least two years with $75,000 in annual revenue and own at least 20% of the business. Lending Club prefers if you have a credit score of at least 620, but having a lower score won’t necessarily prevent you from getting approved -- especially if your business has strong financials. You will be required to personally guarantee the loan. If you can’t qualify for a business loan through Lending Club, consider taking out an unsecured personal loan through this lender. You can borrow up to $40,000 and use the funds for business purposes. You’ll need good personal credit to qualify.

Best for: Borrowers who can’t qualify for an unsecured bank loan or who want to use an unsecured personal loan for business purposes.

  • 7.77% - 35.11% APRs
  • Unsecured loans up to $100,000
  • Terms up to 5 years
  • Funds in 2 - 14 days
  • Lenient eligibility requirements

Best Bad Credit Business Loans

While having a fair to poor credit score might seem to preclude you from most loan options, there are many alternative and online lenders that now cater to business owners who can't qualify for traditional loans from banks and credit unions.

Credibly

Credibly is a great choice for a business loan if you have a low credit score, as the lender requires no minimum credit score to apply. You will, however, need to be in business at least six months with $10,000 in both monthly revenue and deposits (additional requirements may apply if you apply for the business expansion loan). Another thing we like about Credibly is that its loans are unsecured and don’t require a personal guarantee as so many loans given to borrowers with poor credit do.

The lender offers loans up to $250,000, which is higher than what you can get from other lenders if you have a bad credit score. Rates at Credibly are also lower -- typically 9.99% to 36% APRs, though they may be higher depending on your qualifications -- than other alternative lenders that have lenient credit requirements. Credibly loans are also fairly versatile, as they can be used for any working capital or business expansion needs, and they come with maturities ranging from six months to two years.

Best for: Borrowers who have had trouble qualifying elsewhere, especially if they want a reasonable APR or an unsecured loan, and newer businesses with at least six months of operating revenue.

  • 9.99% - 36.00% APRs
  • Loans up to $250,000
  • Loan terms up to 2 years
  • Funds in as fast as 2 days
  • Lenient eligibility requirements

OnDeck

While OnDeck requires a minimum credit score of 500 to apply for a loan, it’s still a strong choice if you have been turned down by other lenders. Unlike other lenders that cater to borrowers with poor credit, OnDeck offers large loan amounts up to half a million dollars and wide range of APRs starting at 7.3%. In addition to the credit score requirements, you’ll also need to be in business for at least one year with $100,000 in annual revenue. The lender does require a personal guarantee, but it does not require specific collateral to secure your loan -- instead the lender will file a blanket lien on your business assets.

For repeat borrowers, OnDeck offers a great benefit of reduced service fees (and perhaps lower APRs). On your first loan, the service fee will be between 2.5% to 4% of the loan amount. If you take out a second loan, the fee will be reduced to 1.25% to 3%, and if you take out a third loan, the fee will be between 0% to 3%. One thing you may not like about OnDeck is that the lender requires daily or weekly repayment, which can put a strain on certain types of businesses.

Best for: Borrowers with thin credit profiles who need more than $250,000, repeat borrowers and borrowers who need funds quickly.

  • 7.3% - 98.4% APRs
  • Loans up to $500,000
  • Loan terms up to 3 years
  • Funds in as fast as 1 day
  • Lenient eligibility requirements

Best Small Business Loans for Women

The number of small businesses started by women has grown at a rate faster five times faster than the national average since 2007. While female entrepreneurs have historically struggled to secure financing, there are a variety of programs that aim to make capital more accessible to women.

SBA 7(a) Loans

We’ve mentioned SBA loans in this article before, but they are particularly great for female entrepreneurs as SBA loans are three to five times likelier to go to women- or minority-owned businesses. The SBA over the past several years has made a concentrated effort to get more funding into the hands of female small business owners. So if you have the patience and qualifications to apply, we strongly suggest applying for a 7(a) loan, whether a standard one or an Express loan.

7(a) loans are versatile general purpose loans so they can be used for a variety of financing purposes from debt refinancing to working capital to real estate. Like most SBA loans, 7(a) loans are guaranteed by the SBA, which allows them to have low interest rates and longer maturities, up to 25 years depending on the planned use of funds. You can now get expedited review on your loan application through the Express loan program -- the SBA will provide a loan decision within 36 hours of applying.

Best for: Female entrepreneurs with established businesses and good credit.

  • 6% - 9% interest rates (may be lower)
  • Loans up to $5 million
  • Terms up to 25 years
  • Funds in several weeks
  • Stricter eligibility requirements

SBA Microloans

The SBA also offers a fantastic microloan program for startups, established and underserved businesses, including those owned by women. You can borrow up to $50,000 through this program, though the average amount borrowed is closer to $13,000. Interest rates are usually between 8% and 13%. The loans are made through a network of intermediary lenders across the U.S., so you should be able to find an organization that serves your area. Many of these lenders specifically look for female entrepreneurs as well.

Like with the 7(a) program, the microloan program is flexible in how you use the funds, allowing you to use them for working capital, inventory, supplies or equipment. Another benefit of using the microloan program is that the lending decision is not based on the size of your business’s balance sheet or the amount of collateral you can put up -- so they’re a good choice for smaller or micro businesses as well. Other eligibility requirements will differ based on which lender you approach.

Best for: Women business owners starting their businesses and smaller business.

  • 8% - 13% interest rates
  • Loans up to $50,000
  • Terms up to 6 years
  • Funding times vary
  • Eligibility requirements vary

Best Small Business Loans for Veterans

There are a variety of financing options available to veteran small business owners, from government grants and loans to marketplace or peer-to-peer loans. We list some of our top picks below.

SBA 7(a) Loans

The SBA offers several fantastic benefits and discounts for veteran small business owners who apply for 7(a) loans. Veterans who apply for the Express 7(a) Loan not only benefit from the standard short decision time (a response is normally given within 3 days), but if approved for a loan, they will also have upfront fees reduced to zero through the SBA Veterans Advantage program. Through the Express program, you can borrow a maximum of $350,000 up to seven years. Interest rates currently max out between 8% and 10% depending on the loan amount. Like with standard 7(a) loans, Express loans are extremely versatile, making them an excellent choice for most business needs.

If you’d like more money, the SBA will also reduce fees on standard 7(a) loans for veterans. As a veteran business owner, you will receive a 50% reduction on the SBA guarantee fee if approved for a 7(a) loan between $150,000 and $500,000. Your guarantee fee will be either 0.125% or 1.5% depending on the loan’s maturity (normally the guarantees fees are 0.25% and 3%). Not only are SBA loans a great deal in general, but these special perks for veteran business owners make them an even sweeter deal.

Best for: Veterans with established businesses and strong credit profiles.

  • 6% - 11% interest rates (may be lower)
  • Loans up to $500,000
  • Terms up to 25 years
  • Funds in a few days to weeks
  • Stricter eligibility requirements

StreetShares

StreetShares is another great choice for veteran business owners, particularly if your credit score has precluded you from an SBA or bank loan. StreetShares was founded by veterans for veterans, so the lender specifically look for veteran business owners to lend to. To qualify for a StreetShares loan or line of credit, you’ll need a credit score of 600 or above and annual revenue of $25,000. You’ll need to be in business at least one year for a loan and at least two for a line of credit.

You can borrow up to 20% of your business’s annual revenue through a loan or line of credit, up to a maximum of $100,000. APRs start at 8%, which is comparable to what other online and alternative lenders can offer. Another benefit of using StreetShares is that you can typically get funds within one week, making it a great option for businesses that cannot wait on a bank or SBA loan. Since StreetShares is a marketplace lender, you’ll need to write a compelling pitch for your business to secure the interest of investors.

Best for: Veterans who may not be able to qualify for an SBA loan or who need funds quickly.

  • 8.00% - 39.99% APRs
  • Loans up to $100,000
  • Terms up to 3 years
  • Funds in a week
  • Lenient eligibility requirements

Summary of Best Small Business Loans for 2017

In the table below, we have summarized our picks for the best small business loans based on a variety of needs and types of borrowers.

Best for...LoanRates
EquipmentSBA 7(a) and 504 loans4% - 9%
Currency3% - 35%
Working capitalBank or SBA line of credit5% - 11%
Kabbage20% - 80%
StartupsSBA Community Advantage loans≤ 10%
Small business credit cards13% - 20%
Commercial real estateSBA 504 loans4% - 5%
Bank loansVaries
Unsecured loansBank loans6% - 25%
Lending Club7.77% - 35.11%
Bad creditCredibly9.99% - 30%
OnDeck7.3% - 98.4%
WomenSBA 7(a) loans6% - 9%
SBA microloans8% - 13%
VeteransSBA 7(a) and Express loans6% - 11%
StreetShares8% - 39.99%

How to Get the Best Small Business Loan

When applying for a small business loan or financing, you should consider a variety of factors before committing to a loan. Initially, you’ll need to assess what you need the loan for (equipment, real estate, working capital, business expansion, etc.) as this will also inform what type of loan or line of credit you need to apply for.

Figure Out How Much You Need and How You Want to Repay

Secondly, you’ll need to determine how much money you need. You don’t want to over- or underestimate the amount you need, as you want to make sure you can get approved for a loan and have enough money to cover what you need. A good place to start is at roughly 10% to 20% of your annual revenue and adjust up or down based on what you think you’ll need. You should also think about what kind repayment schedule works for you, whether that’s monthly, daily or weekly. Some borrowers find making a large payment every month is a greater burden on their business than weekly or daily payments.

Get Your Personal and Business Finances in Shape

Before you apply, you’ll want to make sure your personal and business finances are in shape. Most lenders will care about your personal and business credit score, so it’s helpful to check both before approaching a lender (and take the necessary steps to improve them if they aren’t great). Lenders will also want to see a strong business plan, which will normally include financial statements, such as balance sheets and cash flow, and tax returns. A great business plan should act as a pitch for your business and convince a lender to give you money.

Shop Around

When you’re ready to apply, it’s in your best interest to shop around. Based on how much money you want and when you need it, different lenders will be better than others. If you own an established business and need a large loan, a bank or SBA loan might be the best fit. You should check with national banks and community banks and credit unions in your area. Don’t forget that your relationship with the bank will matter and can help you get approved even if your application has holes. Newer businesses or businesses that need funds quickly may be better off applying through an online lender. Online lenders can sometimes be a better choice if you need under $100,000.

Compare Loan Offers Carefully

Once you have loan offers, you should, at minimum, compare the loans based on the APR, which shows the total amount of interest and fees you will pay on the loan; the repayment schedule, which includes how long the loan term is for and how frequently you will need to make payments; and any loan restrictions, which may include what the loan can be used for. If you don’t need funds quickly, it’s also best to shop around at different banks, credit unions and alternative lenders before committing. Make sure to carefully read the loan contract before signing or have your lawyer or legal advisor review it.

Best Banks for Small Business Loans

Many large banks have renewed their focus on small business lending. Every quarter, the SBA publishes a list of the top 100 most active 7(a) lenders. Some of the top banks on this list are major national and regional banks like Wells Fargo, Chase Bank, U.S. Bank, SunTrust, Bank of the West and KeyBank. Many smaller regional banks also make this list, including banks like Pacific Premier Bank, Seacoast Commerce Bank and Celtic Bank. If you’re in the market for an SBA or a term loan, it may be worth checking out one of the banks on this list.

It’s also worth considering even smaller regional banks or credit unions in your area. These types of lenders have a stronger connection to your community and are invested in lending and working with local businesses. They may also be willing to overlook certain deficiencies in your application that would cause a major bank to deny your loan request. It’s in your best interest to consider a variety of lenders and shop around to get the best deal on a loan.

Other Small Business Loans to Consider

If the options above don't fit your needs, we've compiled a comprehensive list of lenders and loan programs not included above. This includes government-backed loan programs as well as online and alternative lenders.

Lender/Loan ProgramProductsRates
SBASBA export and disaster loans4.00% - 10.00%+
USDAFSA microloans2.25% - 3.38%
Funding CircleTerm loans8.00% - 33.00%
KivaMicroloans0.00%
SmartBizSBA loans7.21% - 8.44%
FundationTerm loans7.99% - 24.99%
FundboxInvoice financing13.00% - 60.00%
QuarterSpotTerm loans20.00% - 48.00%
SnapCapTerm loans19.99% - 49.99%
BlueVineInvoice factoring, lines of credit17.00% - 60.00%
PayPal Working CapitalTerm loans15.00% - 30.00%
Guidant FinancialSBA loans6.00% - 8.50%
Bond StreetTerm loans8% - 25%
DealstruckTerm loans, lines of credit9.99% - 27.99%
AccionStartup loans, microloans, term loansVary

How We Picked the Best Small Business Loans

In our review of government, bank and online small business loans, we considered the following criteria:

  • Competitive interest rates: When it comes to business financing, getting a good interest rate on a loan is crucial, and it pays to shop around. We looked for lenders that offered reasonable interest rates based on the credit profile of borrowers. In general, borrowers with poor credit won't qualify for the same APRs as creditworthy borrowers, but they still shouldn't be paying exorbitant interest on a loan.
  • Wide range of amounts and terms: Did the lenders offer a wide range of loan amounts and terms? Businesses need to borrow varying amounts depending on the planned use of funds, and some businesses may prefer shorter terms to longer ones when it comes to paying back the loan.
  • Few restrictions on loan use: With the exception of commercial real estate loans, we looked for loans that businesses could use for a variety of purposes: equipment or machinery purchases, working capital, inventory, etc. Being able to use funds flexibly makes a loan a more attractive option for many business owners.
  • Clear eligibility requirements: Before you even apply for a loan, you should be able to know if you meet the lender's basic credit and eligibility criteria. Otherwise, it's a waste of your time. We looked for lenders that offered specifics on the types of businesses and owners they look for.
  • Lender credibility: With the advent of online lending, it's now easier for a business owner to get a loan from a less reputable source -- and that’s a problem. While many online lenders are very reputable, we looked for lenders that had positive review or BBB ratings and had been in business at least several years.
  • Funding time: We looked for lenders that either offered quick funding time or were transparent about the application process. Many lenders now understand the importance of getting funds to businesses quickly, so we favored lenders that offered quick approval and funding.
  • Ease of application process: In the past, bank and SBA loans were notorious for lengthy application processes, but as lending has moved online, borrowers are looking for loan applications that are easy to complete. Online lenders typically offer these types of applications, and now many banks are offering similar application processes. Even the SBA is offering simpler application processes for certain types of 7(a) loans.

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