Sections of this topic
Your small business or startup idea could change your life as well as the lives of your customers – but you need the capital to get it off the ground. Small business loans are vital if you want to effectively develop a new business idea or expand an existing firm.
But with so many different small business loan providers and types of loans, it can be exceptionally challenging to choose the right one. Knowing the differences between the various types of loans and lenders is an important part of making the best choice for your business when borrowing money.
Best Small Business Loans
- LendingTree – Best Startup Business Loan Overall
- BlueVine – Best Startup Business Loan for Accessible Credit Lines
- Lendio – Best Startup Business Loan for Lender Comparison
- Credible – Best Startup Business Loan for Flexible Options
- AmOne – Best Startup Business Loan for Fast Approvals
- Fundera by NerdWallet – Best SBA Startup Business Loan
Lender
Type of Loan
Loan Limits
Interest Rate
Term length
Personal Credit Score Requirements
Business History Requirements
All types
Up to $2 million
Varies based on lender
Varies based on lender
Varies based on lender
Varies based on lender
All types
$25,000 to $500,000
Starting at 4.5%
Varies based on lender
Varies based on lender
Varies based on lender
All types
$600 to $100,000
3.99% to 35.99%
Varies based on lender
Varies based on lender
Varies based on lender
All types
$1,000 to $100,000
Varies based on lender
Varies based on lender
Varies based on lender
Varies based on lender
SBA loans, term loans, lines of credit and more
Up to $5,000,000
Starting at 7.75%
Varies based on offer
650
4 months
LendingTree: Best Startup Business Loan Overall
LendingTree is an online lending platform that connects businesses to an extensive range of lending partners. Therefore, LendingTree does not actually originate any loans. Instead, LendingTree matches you with the best lending partner based on your application. LendingTree offers SBA loans, short-term loans, business lines of credit, equipment financing, and invoice factoring.
Why we chose it: LendingTree offers the best small startup business loans because this company matches you with multiple potential lenders. Therefore, you can easily find a loan offer with reasonable terms once you complete the application.
- Reasonable borrower qualifications
- Multiple types of financing are available
- Quick and easy application process
- You may be subject to additional fees
- Uninformative website advertising
- Pushy customer service
Pricing
The terms and fees for your startup business loan depend on the specific loan offer’s rates. Check out your pricing by filling out the quick LendingTree online application.
Application Process
LendingTree’s quick and simple application process is one of the primary reasons it’s the best startup business loan platform. Since the application is online, you can complete it within 10 minutes. The application asks for your business’s classification, credit score, profitability, and time in business. After you complete the application, LendingTree will show you your startup business loan offers within two minutes.
Borrower Qualifications
The great part about LendingTree is that it’s inclusive of most businesses. Rather than having specific criteria to rule out potential borrowers, LendingTree uses your credit score, annual revenue, and profitability to find a lender willing to work with your business.
Loan Limits
Your specific loan limits depend on which lending partner LendingTree matches you with. That being said, you can ask to borrow up to $2 million on the LendingTree application.
Terms and Fees
Since LendingTree works with several lending partners, your terms and fees depend on your specific loan offer. For this reason, reading through the entire loan offer is essential. This is the only way to determine if the terms and fees are reasonable for your business to pay off.
BlueVine: Best Startup Business Loan for Accessible Credit Lines
BlueVine is an established online lending platform that provides short-term business lines of credit between $5,000 and $250,000. You can choose from Flex 6 or Flex 12 lines of credit, designed around six and 12-month repayment periods. Therefore, BlueVine is an excellent choice for small business owners that need short-term working capital or startup business loans.
Why we chose it: BlueVine is the best online lending platform for flexible credit lines because you can finish your application and receive a decision on the same day. This lending platform also considers borrowers with poor credit and six or more months in business.
- Funding within one business day
- Multiple term lengths
- Low minimum credit score requirements
- You may be subject to weekly repayments
- Requires a personal guarantee
- Unavailable in North Dakota, South Dakota, and Nevada
Pricing
The terms and fees for your startup business loan depend on the specific loan offer’s rates. Check out your pricing by filling out the quick BlueVine online application.
Application Process
BlueVine stands out as one of the best startup business loan providers with a simple and fast application process. You can complete the online application in under 10 minutes. Furthermore, you will receive your loan offers within a few minutes and funding within one business day.
Borrower Qualifications
BlueVine features more lenient borrower qualifications than other online and traditional lending platforms. However, BlueVine focuses on your business’s cash flow, time in business, and credit score.
Furthermore, BlueVine is one of the best small business loans for startups. This is because BlueVine considers borrowers with just six or more months in business.
Loan Limits
You can access a line of credit and borrow between $5,000 and $250,000 from BlueVine.
Terms and Fees
BlueVine offers two different payment structures: Flex 6 and Flex 12. Borrowers who choose Flex 6 are subject to weekly payments over 26 weeks. On the other hand, Flex 12 borrowers make monthly payments over 12 months. Furthermore, you can expect interest rates ranging from 15% to 78%.
Lendio: Best Startup Business Loan for Lender Comparison
Similar to LendingTree, Lendio is another loan platform with an extensive lender marketplace. In fact, Lendio lets you compare startup business loan options from more than 75 direct lenders. In addition, your loan can be deposited into your bank account as quickly as 24 hours. Therefore, Lendio is an excellent option for small business owners who need fast cash.
Why we chose it: Lendio is the best startup business loan provider for finding quick and comprehensive loan offers because it provides over 75 loan options once you complete the application. Therefore, you can use Lendio to find the best rates and terms you can possibly qualify for.
- Compare loans from over 75 lenders
- Rapid funding time
- Can borrow up to $500,000
- Not a direct lending platform
- Borrower requirements vary by lender
Pricing
The terms and pricing for each startup business loan from Lendio depend on which lender it matches you with and your business’s financial situation.
Application Process
Lendio has a 15-minute online application process. Once you finish the application, you receive your decision on the same business day. Therefore, Lendio is a fantastic choice for small business owners who need a quick list of startup business loan options to compare.
Borrower Qualifications
Since Lendio isn’t a direct lending platform, the borrower qualifications vary depending on which lender it matches you with. It depends on your business’s annual revenue, time in business, and your personal credit score.
Loan Limits
In terms of Lendio’s small business loan limits, you can borrow between $25,000 and $500,000. Furthermore, you can repay the loan over a one to five-year time period.
Terms and Fees
Although your terms and fees depend on your specific loan offers, your APR can be as low as 4.5%. However, your specific terms and fees are based on your credit score, time in business, and several other financial factors.
Credible: Best Startup Business Loan for Flexible Options
Credible is another online lending platform that shows you real prequalified rates for loans without impacting your credit score. Therefore, Credible is similar to the two options above and not a direct lender. Instead, Credible matches you with the best potential lenders in its network based on your application and business information.
Why we chose it: Credible is one of the best lending platforms for startup business loan options because you can check rates from multiple lenders. This lending platform is free to use, and you can see prequalified rates in only two minutes.
- Easy prequalification process
- Multiple lenders
- Additional financial products
- You may be subject to origination fees
- High APR for borrowers with poor credit
Pricing
The specific rates and terms for your small business loan from Credible depend on various factors, such as your credit score and business financials.
Application Process
Credible is a customer-focused online lending platform. Therefore, Credible simplifies the loan application process and lets you quickly compare rates from multiple lenders.
Borrower Qualifications
The borrower’s qualifications vary from lender to lender. However, lenders typically view your credit score, proof of income, and debt-to-income ratio to see the type of loan offer they can present.
Loan Limits
You can borrow anywhere from $600 to $100,000 for a startup business loan from Credible.
Terms and Fees
The interest rate for your Credible loan range from 3.99% to 35.99%. Luckily, you can find your specific terms and fees in just two minutes through the online application process.
AmOne: Best Startup Business Loan for Fast Approvals
AmOne is another loan marketplace that matches borrowers with the best potential lender based on personal and business details. AmOne’s lending partners include Marcus, SoFi, Best Egg, Prosper, LendingPoint, and Avant. In addition, AmOne matches you with a list of loan offers within minutes. This lending platform doesn’t require a minimum credit score.
Why we chose it: AmOne offers the best startup business loans with fast approvals since this lending platform doesn’t require a minimum credit score. You can view your loan offers within minutes after completing your application.
- Simple application process and fast turnaround time
- No credit score check
- Range of loan terms
- Lenders may call you to specify loan terms
- Must provide personal info
- Rates by lender
Pricing
Your loan terms and interest rates depend on your application and business details.
Application Process
AmOne has a quick application process. You must provide simple information in your application, such as your name, address, income, and date of birth. However, AmOne does not ask for your Social Security number or conduct a hard credit check. AmOne will display your list of loan offers within 45 seconds after submitting your startup business loan application.
Borrower Qualifications
AmOne has a wide range of lending and financial partners that cover the entire range of American consumers. Therefore, approval requirements are determined by each lender themselves.
Loan Limits
You can borrow $1,000 to $100,000 with your AmOne startup business loan. Although AmOne offers small business loans, you can also take out unsecured personal loans for debt consolidation or home improvement and secured loans to purchase boats or vehicles.
Terms and Fees
AmOne welcomes borrowers with a wide range of credit histories and business financials. Therefore, your specific rates and terms depend on your application and business financials.
Fundera by NerdWallet: Best SBA Startup Business Loans
Fundera is a unique alternative lender that acts as both a direct lender and loan marketplace. For this reason, Fundera can fund the entire loan. However, Fundera may also choose to match you with several lenders in its network. This provides the flexibility and speeds small business owners need. Furthermore, Fundera can help business owners with low credit scores.
Why we chose it: Fundera by Nerdwallet offers the best SBA loans because it offers loans from Cadence Bank and BayFirst. Fundera also offers multiple SBA loan types, including the 7(a) Program, CDC/504 Program, and Microloan Program.
- Extensive lender marketplace
- Competitive interest rates
- Soft credit check
- Potentially long turnaround time
- Unclear borrow qualifications
Pricing
Your Fundera startup business loan’s pricing depends on your specific loan offers and the terms they present. You should compare your options and choose the one with the most reasonable payback terms.
Application Process
Fundera offers an easy application process and access to SBA 7(a) loans, term loans, invoice factoring, and more. Furthermore, you can receive funding faster than you would at your local bank.
Borrower Qualifications
The borrower qualifications for a Fundera loan depend on each specific lender. They will look at relevant details such as your credit score and business financials.
Loan Limits
You can borrow up to $5,000,000 from Fundera with an SBA 7(a) loan. However, you need a minimum credit score of 650. This program includes lenders such as Live Oak Bank and Wells Fargo.
Terms and Fees
Your interest rate will range from 7.75% to 10.25% for your SBA loan from Fundera. However, you can expect higher interest rates for small business loans, online term loans, and online lines of credit.
Choosing the Best Small Business Loan
Choosing a small business loan can be a daunting task. Not only are there different types of loans available, you’ll also have to choose between different providers that have various advantages and drawbacks. There are significant differences between banks and various alternative lenders. Plus, you may want to choose one of two popular kinds of small business loans: term loans or lines of credit. There are also other credit products like equipment financing and working capital loans.
Loan Provider Options
The first thing to consider is where you go to get your loan. The traditional place for small businesses or startup to get a loan is to apply at a bank. If you don’t think you’ll qualify for a bank loan, either because of poor credit, lack of business history, or other factors like a previous bankruptcy, then you should take a look at alternative lenders, which include what are commonly called marketplace lenders.
Traditional Banks
There are variety of banks for startups nowadays. You’ll generally receive the best rates, fewer fees, longer repayment terms, and more flexible pay back options with a business term loan from a bank. However, qualifying for these kinds of loans is difficult and you’ll need good credit and a track record of profitable business in order to be accepted.
Marketplace Lenders
Marketplace lending is broadly defined to include any practice of pairing borrowers and lenders through the use of an online platform without a traditional bank intermediary. These are non-bank entities that make a variety of different types of loans to small businesses, such as term loans, merchant cash advances, and business lines of credit. They source their funding from lenders who have a higher risk tolerance than other lenders and can operate without the same legal restrictions that deposit-taking banks must follow.
As a result, it’s often easier to qualify for a loan from an alternative provider and quicker to source funds from them. The trade-off is that you’ll pay higher interest rates, fees, and have shorter repayment terms. Alternative lenders also might have onerous repayment schedules, with payments due as frequently as daily or weekly.
If you are in a position where you don’t qualify for a traditional bank, then you should consider one of the best bad credit business lenders. You might also find that even if you do qualify for a loan from a bank, a shorter-term loan from an alternative lender is more suitable for your situation. This could be because having quick access to cash is more important than securing a low interest rate, for example.
Type of Loan: Term Loan or Line of Credit?
The next thing to consider is the type of loan you want. There are a variety of term loans, usually based on term length, and lines of credit, which may be secured or unsecured. Each type of small business loan has its pros and cons.
Term Loans
Term loans provide borrowers with a lump sum cash payment up front that must be repaid on a set schedule. You’ll be able to use the loan for operational expenses like marketing, hiring, buying new equipment, or to refinance existing business debt not secured by real estate, such as cash advances, business loans, and equipment leases. You’ll generally have a set interest rate and pre-arranged regular repayment schedule. Depending on the terms, you may or may not be able to pay it back early and avoid interest charges.
One common type of small business term loan is an SBA loan, which is backed by the Small Business Administration, a U.S. federal government entity whose purpose is to support entrepreneurs and small businesses. These loans generally have better rates than non-SBA loans.
Lines of Credit
The other main type of business loan is a line of credit, which is a flexible loan that works like a credit card. You can draw money from a line of credit up to your limit. Interest is only paid on the amount of money that you borrow, making it less costly than term loans and useful for dealing with unforeseen cash flow challenges or unexpected purchases. The money can usually be accessed via a business checking account or credit card.
Lines of credit can be secured, meaning the credit is guaranteed with property that can be seized by the lender if you fail to repay, or unsecured. Secured lines of credit tend to be easier to obtain and have lower interest rates.
Whether a term loan or a line of credit is the right choice will depend on your circumstances. If you’re unsure, speak with a small business advisor or a lending provider.
Other Types of Small Business Loans
In addition to term loans and lines of credit, there are other types of loans not considered in this article, but which may be valuable to you depending on your circumstances. These include:
- Working capital loans: Short-term loans used to fund day-to-day operations that paid back from business receipts.
- Equipment financing: Similar to a car loan, the new equipment being purchased acts as collateral for the loan.
- Invoice financing: Money is borrowed against unpaid customer invoices, allowing you to access some of that money immediately. Invoice factoring is a similar option.
- Merchant cash advance: Merchant cash advances involve borrowing money in return for a share of future profits from credit card sales.
- Business credit cards: A business credit card functions more or less the same as a personal one. Can be difficult to obtain with bad credit.
Methodology for the Best Small Business Loan
The small business loan products in this guide are designed to help you find the loan that is the best fit for your business. Since every situation is different, here are the criteria upon which we based our rankings. Note that while we didn’t directly judge the products based on the type of loan or the provider itself, but rather on criteria that we applied equally to all products.
- Interest rate and fees: When available, we looked at the interest rates and fees of the loan products.
- Ease of application: We considered the complexity of the loan application as well as how long it normally takes to complete.
- Speed of approval: We looked at how long the loan approval process, after the application is complete.
- Ease for approval: We considered the requirements that the lenders have for their loans, such as minimum credit scores or business history requirements
- Repayment terms: We looked at the loan term length, payment frequency, and any distinctive features, such as payment by invoices or business receipts.
Frequently Asked Questions (FAQs) for Small Business Loans
Bottom Line on Small Business Loans
Getting a small business loan can make all the difference in the success of your enterprise. Understanding what kind of loan you need is the first step to getting a loan that will help propel your business forward. BlueVine is one of the best lenders for a small business loan because of its flexible loan options, quick approval process, and easy application process.
Rory is a content creator living in a small town in New England. She specializes in human resources and project management. Currently, she’s working on her first book about the importance of providing high-quality benefits for employees. Rory spends most of her free time hiking with her dogs or gardening in her back yard.
