Compare online loan options for funding and growing your small business. A small-business loan can help you stock your shelves, buy new equipment, or expand your footprint. Business owners can access funding through traditional banks, online lenders, and community lending institutions. Explore and compare your options for small-business financing, including SBA loans, business lines of credit, term loans and invoice-based financing. Lines of credit.
Financing you can draw from up to a set limit. Pay interest only on borrowed amount.
Line of credit
2.25 – 25.00
- 6–12-month line of credit
- Minimum credit score: 660.
- Minimum time in business: 6 months.
- Minimum annual revenue: $120,000.
Annual Percentage Rates (APR), loan term and monthly payments are estimated based on analysis of information provided by lenders and publicly available information. All loan information is presented without warranty, and the estimated APR and other terms are not binding in any way. Lenders provide loans with a range of APRs depending on borrowers’ credit and other factors. Keep in mind that only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend on factors like credit score, requested loan amount, loan term, and credit history. All loans are subject to credit review and approval.
Funding options for qualified business owners include SBA loans, term loans, business lines of credit and invoice factoring. You typically need six months to a year or more of history and revenue to qualify for financing. Startups operating for less than a year can consider other financing options.
The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
Loan amounts: $30,000 to $5 million. Approximate APR range: 5.50% to 8%.Good for large one-time and longer-term investments, purchasing real estate or equipment, buying existing businesses and refinancing debt.
The SBA also administered the Paycheck Protection Program, which was designed to help small-business owners keep employees on the payroll. The general fund for PPP loans ran out of money on May 4, 2021. New applications from Community Financial Institutions, which service underserved communities, will still be processed. But new PPP loan applications from other lenders will not be processed. The PPP loan program officially expires on May 31, 2021.
Business term loan
Online lenders offer term loans of up to $500,000. For a short-term loan, the repayment period typically ranges from three to 18 months, while a long-term loan repayment can extend up to 10 years or longer in some cases. Business owners can also find financing that can be used for specific items, like equipment or inventory.
Loan amounts: From $500,000 to $10,000,000 .Approximate APR range: 9% to 25%. Good for large one-time investments.
Business line of credit
A business line of credit provides access to flexible cash. Similar to a credit card, lenders give you access to a specific amount of credit (say, $100,000), but you don’t make payments or get charged interest until you tap into the funds.
Credit line range: $15,000 to $10,000,000.APR range: 10% to 25%. Good for managing cash flow, handling unexpected expenses and financing short-term business needs.
Invoice factoring and invoice financing
Invoice factoring turns business owners’ unpaid invoices into immediate cash. You sell the invoices to a factoring company, which is paid when it collects from your customers. If you prefer to maintain control over your invoices, invoice financing is an alternative to factoring. Time to funding can be relatively short with invoice factoring or financing.
Financing amounts: Up to $10 million. APR range: 10% to 79%. Good for managing cash flow, short-term financing.
Additional funding options
Business financing options other than traditional loans or lines of credit include personal loans for business or business credit cards. A personal loan for business is a good option if your business is still young and you do not qualify for traditional financing. Personal-loan providers look at your personal credit score and income instead of your business history.
A business credit card offers revolving credit, making it a solid option for short-term expenses. It can also be easier to qualify for a business credit card than a small-business loan. While credit limits tend to be smaller than a line of credit, a business credit card may offer rewards, such as cash back or travel points.
Every lender has different underwriting guidelines, but they generally consider similar factors, including personal credit score, your time in business and annual revenue. Lenders also consider your cash flow and ability to repay the debt.
Banks that offer small-business loans typically require a strong personal credit score (starting in the 700s), several years in business and a solid track record of business finances such as strong cash flow. In some cases, banks will require collateral.
Depending on the lender, you’ll be asked to share financial documents like tax returns, and bank and cash-flow statements. Read more about how to get a small-business loan.
Having strong personal credit can help you qualify for lower rates and give you more financing options. If you do not need business financing right away, consider building your credit score.
If you do not know your credit score or want to monitor it consistently, several personal finance websites, including Experian.com, offer free credit score access. Track your progress and open more doors for financing your business.
Only about 1 in 5 businesses that apply for a loan from a big bank are approved. We help business owners by working with online lenders that simplify the loan application process and approve more small businesses. Many online lenders also offer competitive rates and faster funding than some banks.