Business owners can take out small business loans — anywhere between $500 and $5 million — to finance expenses like payroll financing, inventory, equipment and other costs. Repayment terms could be as short as three months or as long as 25 years. Both traditional financial institutions and alternative online lenders offer small business loans.
Best Small Business Loans in August 2025
Last year, LendingTree funded $510 million in business loans
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Live Oak Bank: Best SBA preferred lender
Up to $5,000,000
10.50% to 14.00%
14% for loans $50,000 or less
13.5% for loans $50,001 to $250,000
12% for loans $250,001 to $350,000
10.5% for loans above $350,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.
12.50% to 15.50%
15.5% for loans $25,000 or less
14.5% for loans $25,001 to $50,000
13.5% for loans $50,001 to $250,000
12.5% for loans above $250,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.
Up to 25 years
Pros
- Offers SBA 7(a), SBA 504 and SBA Express loans
- Both fixed and variable interest rates are capped by the SBA
- Every borrower is assigned a dedicated business analyst who can help identify areas of growth for your business
Cons
- Not transparent about eligibility criteria
- Even with a preferred lender, SBA loans are slower to fund than other types of business loans
- You’ll need to contact a loan officer to apply, but you can get started online
Why we picked it
If you’re looking to borrow a significant amount of funds at a relatively affordable price, you might want to consider an SBA loan. Backed by the U.S. Small Business Administration (SBA), SBA loans are generally more affordable than other types of small business financing due to their government backing.
But while this affordability typically comes at the expense of speed with other lenders, Live Oak Bank is an SBA Preferred Lender, which may shorten the wait by several weeks. As one of the top SBA Preferred Lenders in the country, Live Oak Bank offers multiple loan options, including SBA 7(a), SBA 504 and SBA Express loans.
How to qualify
Live Oak Bank doesn’t disclose the minimum credit score, time in business or annual revenue you’ll need to qualify. Contact the lender directly to find out if your business qualifies for a loan.
iBusiness Funding: Best for financing large purchases
$25,000 to $500,000
7.49%
6 to 60 months
Pros
- Lengthy terms give borrowers up to seven years to repay their debt
- Lower rates than many alternative lenders
- No application fees or prepayment penalties
Cons
- Collateral, personal guarantee and/or blanket lien may be required
- Must be in business for at least two years to qualify
- May take a few days to fund
Why we picked it
If you need to finance large purchases outside of equipment, like inventory or upfront capital to expand your business, iBusiness Funding might be your best option, with lengthy terms giving you up to 60 months to repay your debt.
While longer loan terms can increase the amount of interest you’re required to pay over time, it’s worth noting that iBusiness Funding offers lower interest rates than many alternative lenders, making this a relatively affordable option, especially for borrowers with good credit.
However, you’ll need at least two years in business to qualify, meaning this is more suited to an established business looking for an expansion loan, and not a startup. And unlike some of the other options on this list, it may take as long as four business days to receive your funds.
How to qualify
In order to qualify, you’ll need to meet iBusiness Funding’s criteria of:
- Minimum credit score: 640
- Minimum time in business: 24 months
- Minimum annual revenue: $50,000
Fundbox: Best for startup companies
Up to $250,000
4.66% to 8.99%
4.66% for 12-week terms
8.99% for 24-week terms
12 or 24 weeks
Pros
- Low time in business and annual revenue requirements
- No prepayment penalties
- Relatively fast funding
Cons
- May require a personal guarantee
- Short repayment terms with weekly payments required
- Low maximum borrowing amount compared to other lenders
Why we picked it
With the lowest time in business and annual revenue requirements on this list, Fundbox is our pick for the best startup business loans. Your business only needs to be in operation for three months to qualify for a business line of credit up to $250,000. Once approved, you can borrow funds as needed to pay for a wide range of business expenses, only paying interest on what you actually withdraw.
However, Fundbox may require a personal guarantee to secure your funds, which puts your personal assets at risk should you fall behind on your loan payments. With short repayment terms, this means small business owners will need to make sure they’re prepared to make the required weekly payments before making withdrawals.
How to qualify
In order to qualify, you’ll need to meet Fundbox’s criteria of:
- Minimum credit score: 600
- Minimum time in business: Three months
- Minimum annual revenue: $30,000
American Express Business Line of Credit: Best for borrowers with good credit
$2,000 to $250,000
3.00%
3% to 9% for 6-month terms
6% to 18% for 12-month terms
9% to 27% for 18-month terms
12% to 18% for 24-month terms
Each draw counts as a separate installment loan. Single-repayment loans will have different rates and terms.
6 to 24 months
Pros
- Very affordable rates for borrowers with good or excellent credit
- Low annual revenue requirement
- No application or prepayment fees
Cons
- Requires a personal guarantee
- Only select customers qualify for lines of credit over $150,000
- High late payment and insufficient fund fees
Why we picked it
If you have good to excellent credit, a business line of credit from American Express might be one of your best financing options. Interest rates start at 3.00%, which is by far the lowest rate on this list, but only the most qualified of borrowers will be able to take advantage of it.
Lines of credit go up to $250,000, though credit lines over $150,000 are typically only available for customers with a pre-existing relationship with American Express.
Once again, borrowers will need to sign a personal guarantee to receive their funds, but repayment terms are longer than similar competitors and weekly payments are not required, which may make repaying the loan more manageable.
How to qualify
In order to qualify, you’ll need to meet American Express’s criteria of:
- Minimum credit score: 660
- Minimum time in business: 12 months
- Minimum annual revenue: $36,000
Taycor Financial: Best for financing equipment
$500 to $5,000,000
7.99%
12 to 84 months
Pros
- Offers financing to cover the full cost of purchasing equipment with no down payment required
- No time in business requirement
- Low credit score requirement
Cons
- May require a personal guarantee
- Charges a documentation fee
- Stricter eligibility criteria for equipment refinancing
Why we picked it
With equipment leasing, financing and refinancing options, Taycor Financial is our top choice for businesses looking to finance essential equipment. Unlike some lenders, Taycor Financial offers enough financing to cover the full cost of equipment and machinery with no down payment required.
Loan amounts range from as little as $500 to as much as $5,000,000, and borrowers only need a personal credit score of 600 to qualify. Because the equipment acts as collateral to secure the loan, all business types are encouraged to apply, including startups and low-revenue companies. However, stricter eligibility criteria may apply for businesses looking to refinance their equipment.
How to qualify
In order to qualify, you’ll need to meet Taycor Financial’s criteria of:
- Minimum credit score: 600
- Minimum time in business: Not required
- Minimum annual revenue: No specific minimum
Fora Financial: Best for covering short-term cash flow gaps
Up to $1,500,000
1.13 factor rate
Up to 18 months
Pros
- Low credit score and time in business requirements
- Prepayment discounts available
- Relatively fast funding
Cons
- High annual revenue requirement
- Factor rate makes it difficult to compare loan costs with other lenders
- High loan amounts and short repayment terms could lead to a dangerous debt cycle if borrowers aren’t prepared to repay their loan
Why we picked it
If you’re looking for financing to cover short-term gaps in cash flow, look no further than Fora Financial, which offers business loans up to $1,500,000. This is a significant amount of cash, which should provide more than enough funds to stock up on inventory, survive a slow season or take advantage of a limited-time growth opportunity.
However, with shorter repayment terms than most of the lenders on this list, this option is best suited for business owners who expect their cash flow to increase in the coming months. Otherwise, high loan amounts could leave borrowers with overwhelming debt payments.
How to qualify
In order to qualify, you’ll need to meet Fora Financial’s criteria of:
- Minimum credit score: 570
- Minimum time in business: Six months
- Minimum annual revenue: $240,000
Credibly: Best for borrowers with bad credit
$25,000 to $600,000
1.11 factor rate
6 to 24 months
Pros
- Lowest credit score requirement on this list
- Low time in business requirement
- Relatively fast funding
Cons
- High annual revenue requirement
- Requires daily or weekly payments
- Factor rate makes it difficult to compare loan costs with other lenders
Why we picked it
While some loan programs are tailored toward borrowers with good to excellent credit, that doesn’t mean bad credit borrowers are out of options. If you’re looking for a bad credit business loan, consider Credibly, an online lender that works with borrowers who have personal credit scores as low as 500.
In addition to setting the lowest minimum credit score on this list, Credibly only requires businesses to operate for six months to qualify for a working capital loan up to $600,000, making this a viable option for newer businesses. However, you’ll need to generate quite a bit of revenue ($15,000 or more per month) to qualify.
How to qualify
In order to qualify, you’ll need to meet Credibly’s criteria of:
- Minimum credit score: 500
- Minimum time in business: Six months
- Minimum annual revenue: $180,000
OnDeck: Best for same-day funding
$5,000 to $250,000
31.30% Minimum APR offered to at least 5% of customers (not the lowest rate offered)
Up to 24 months
Pros
- Same-day funding available
- Fair to low credit accepted
- Can help build business credit
Cons
- Requires daily or weekly payments
- High interest rates
- Funding not available in North Dakota
Why we picked it
If you need fast funds, OnDeck is one of your best options. The lender’s online application only takes a few minutes to complete, and, if approved, borrowers can receive their funds as soon as the same business day. On-time payments can also help you build your business credit, which may make it easier to qualify for other types of financing down the road.
Like other alternative lenders, OnDeck requires daily or weekly loan payments, which borrowers will need to be prepared to pay to keep their loan in good standing. It’s also important to note that OnDeck does not disclose its starting interest rates, so you’ll need to apply to understand your potential loan costs.
How to qualify
In order to qualify, you’ll need to meet OnDeck’s criteria of:
- Minimum credit score: 625
- Minimum time in business: 12 months
- Minimum annual revenue: $100,000
Headway Capital: Best for covering ongoing expenses
Up to $100,000
Not disclosed
12 to 24 months
Pros
- Relatively fast funding
- No monthly or annual service fees
- No prepayment penalties
Cons
- Low maximum loan amounts compared to other lenders
- 2% draw fee in most states
- Not available in Arkansas, Connecticut, Montana, Michigan, North Dakota, Nevada, Rhode Island, South Dakota and Vermont
Why we picked it
If you’re looking for revolving funds you can borrow from again and again, consider Headway Capital’s line of credit. Like with other credit lines, you’ll only pay interest on what you borrow, making this option ideal for covering day-to-day operational costs. If you’re able to repay your loan sooner than expected, you can do so without facing any prepayment penalties.
And while some line of credit lenders — like American Express — treat each draw like a separate loan, Headway Capital’s line of credit re-amortizes your balance over your new repayment term when you make additional draws. This can make it simpler to understand and manage your payment schedule if you need to get additional funding before fully paying off a draw.
However, only businesses in certain states can qualify. And depending on what state you live in, there may be a 2% draw fee, which adds to the cost of borrowing.
How to qualify
In order to qualify, you’ll need to meet Headway Capital’s criteria of:
- Minimum credit score: Not disclosed
- Minimum time in business: Six months
- Minimum annual revenue: $50,000
Accion Opportunity Fund: Best for underserved entrepreneurs
$5,000 to $350,000
8.49%
12 to 60 months
Pros
- Provides resources for women, people of color and low-income business owners
- Offers business coaching and mentorship in both English and Spanish
- No prepayment penalties
Cons
- Blanket lien required for loans over $50,000
- Not available in Montana, North Dakota, South Dakota, Tennessee, Vermont and District of Columbia
Why we picked it
Our top pick for businesses run by women and minority entrepreneurs is Accion Opportunity Fund (AOF), a nonprofit organization focused on helping underserved business owners get the resources and inclusive funding they need to succeed. While all businesses are welcome to apply, 90% of AOF’s funding goes to women, people of color and borrowers with low-to-moderate income.
In addition to working capital loans, which can be used to cover a wide range of expenses, AOF also offers business coaching and mentorship in both English and Spanish.
However, borrowers should be aware that a blanket lien is required for loans over $50,000, giving AOF a claim on most (if not all) of your business assets should you default on your loan.
How to qualify
In order to qualify, you’ll need to meet Accion Opportunity Fund’s criteria of:
- Minimum credit score: 600
- Minimum time in business: 12 months
- Minimum annual revenue: $50,000
altLINE: Best for financing unpaid invoices
$30,000 to $5,000,000
75% to 90%
0.75% to 3.50%
Pros
- Provides funding by collecting outstanding customer invoices on your behalf
- Works with startups and bad credit borrowers
- Funding available within 24 to 48 hours
Cons
- Charges origination and wire fees
- Requires your customers to have good credit
- Fees increase the longer an invoice is left unpaid
Why we picked it
If your business is sitting on unpaid invoices, working with an invoice factoring company like altLINE might allow you to overcome cash flow issues without taking on debt. With invoice factoring, businesses can sell outstanding invoices to companies like altLINE and receive a cash advance.
altLINE offers invoice factoring up to $5,000,000, though the exact amount you can receive will depend on the value of your invoices. While all factoring companies charge a fee for their services, altLINE’s is relatively affordable. However, you may need to pay origination and wire fees, depending on your situation.
How to qualify
Unlike traditional lenders, invoice factoring companies base eligibility on your invoice history. This means your business will not need to meet minimum credit score, time in business or annual revenue requirements to qualify. Instead, eligibility will depend on your outstanding invoices and the creditworthiness of your customers.
Bank of America: Best for building business credit
Starting at $1,000
Not disclosed
12 months (with annual review)
Pros
- Cash-secured line of credit can help establish and build business credit
- Offers multiple financing options for small businesses
- Rate discounts of 0.25% to 0.75% for Bank of America Preferred Rewards members
Cons
- Credit limit is based on your security deposit
- Doesn’t disclose minimum credit score
- Annual fee of $150 (waived the first year)
Why we picked it
Bank of America offers a variety of products and services aimed at businesses in different stages of growth. But if your business is just starting out — or if you’ve always relied on your personal credit to obtain business funds — it might be a good idea to choose a form of financing that will help you establish credit for your business.
With the Bank of America cash-secured line of credit, you can set money aside for expenses while building your business credit. Much like with a secured credit card, this credit line is equal to the security deposit made to open the account. After a year of making regular payments, you can get your deposit back and potentially upgrade to an unsecured line of credit.
How to qualify
In order to qualify, you’ll need to meet Bank of America’s criteria of:
- Minimum credit score: Not disclosed
- Minimum time in business: Six months
- Minimum annual revenue: $50,000
National Funding: Best for early payoff discounts
$5,000 to $500,000
1.11 factor rate
4 to 24 months
Pros
- Discounts available for paying off your loan early
- Relatively fast funding
- Provides a loan specialist to discuss customized solutions for your business
Cons
- High annual revenue requirement
- Requires daily or weekly payments
- Factor rate makes it difficult to compare loan costs with other lenders
Why we picked it
While some business lenders penalize borrowers for repaying their loans early — hoping to regain some of the money they would have made in interest over the lifetime of the loan — National Funding offers early payoff discounts, which can help business owners save even more on the cost of their loan.
That means if you’re expecting a large influx of cash that may make it possible to pay off your loan early, you can save money with National Funding. Exact information on what prepayment discounts you’re eligible for will be available after applying, before you accept the loan and its terms.
National Funding’s business loans go as high as $500,000. With a quick application process, you could receive your funds as soon as 24 hours after approval. However, loan payments are required daily or weekly, which could put a strain on your business budget. Also, the factor rate can make it hard to compare against other business loan offers.
How to qualify
In order to qualify, you’ll need to meet National Funding’s criteria of:
- Minimum credit score: 600
- Minimum time in business: Six months
- Minimum annual revenue: $250,000
What is a small business loan?
Small business loans help new and established companies access capital for various business needs. With business financing, you can purchase inventory, invest in new equipment, build an expansion or cover emergency expenses.
Traditional banks, credit unions, online lenders and government agencies all offer small business loans.
The best business loan for your company depends on how much you need, your business’s qualifications and how quickly you need the funds.
On this page
- How getting a loan with LendingTree works
- Applying for a business loan through your bank
- Types of small business loans
- Business loan requirements
- What to consider before getting a business loan
- How tariffs are affecting small business loans
- How to compare small business loans
- Additional business funding options
- How we chose the best small business loans
- Frequently asked questions
Business loan requirements
When you apply for a business loan, lenders want to know that your business and credit history are stable. Here are some common business loan requirements you may need to meet to get approved for small business funding:
-
TIME IN BUSINESS
In general, your business will be in a stronger position to borrow if you can prove you have a track record of solid revenue over the past one to two years. This is more attractive to a lender than a company with spotty revenue over the past six months.
-
CREDIT SCORE
Lenders use your credit score to determine your riskiness as a borrower. In most cases, you’ll need a good to excellent credit score in the mid-600s or higher to get a business loan, although certain lenders allow scores as low as 500. Your business credit score should be at least 80, although some lenders may rely on just your personal score when reviewing your loan application.
-
CASH FLOW
A business cash-flow projection shows when money is collected, when cash goes out and what’s left. Lenders typically like to see that you understand where your business’s money is going each month.
-
COLLATERAL
Collateral is an asset that lenders can legally seize if you can’t make payments. Common forms of collateral include real estate, equipment, money owed to your company (accounts receivable) and even cash. Some business owners use their personal assets — including their homes — as collateral on a business loan.
-
FIXED CHARGE COVERAGE RATIO
Your business’s fixed-charge coverage ratio measures how well your company can pay its fixed expenses, including any debts and interest you have. Lenders use this metric to help determine whether or not to approve a business loan application.
-
WORKING CAPITAL
Your working capital refers to the available money you have to fund your company’s day-to-day operations. You can calculate your working capital by subtracting the business’s debt liabilities due within a year from current assets that you can convert to cash.
Small business loan application checklist
Applying for a small business loan involves rounding up necessary documents for your loan application. The exact paperwork differs across business funding partners, but here are some documents you might need to provide:
- Business plan
- Two-plus years of personal and business tax returns
- Recent profit-and-loss statement
- Past bank statements
- Recent balance sheet
- Legal filings related to ownership
- Information on existing debts
- Business licenses and permits (if applicable)
- Information on collateral (if required)
- A certificate of good standing
Are tariffs affecting loan rates?
“Not really. Small business lenders typically use the current federal funds and prime rate when setting interest rates. The prime rate is currently 7.50% and has been since December 2024, which means tariffs aren’t having a major impact on loan rates for small businesses.
“It’s impossible to predict if rates will go up, but generally the federal funds rate and prime rate will rise when employment or inflation is too high and go down when they’re too low.”
Is now a good time to consolidate debt?
“Yes, many lenders offer small business loans and lines of credit that can be used to cover working capital and inventory costs, including increased costs caused by tariffs.
“But while these can be a great short-term measure, loan repayments generally start quickly, which means you’ll need enough revenue to cover the monthly cost of the loan. If tariffs are increasing your overhead costs, you may need to raise prices or re-evaluate your strategy to compensate in the longer term.”
How to compare small business loans
In order to pick the best business loan, you can compare the following loan details:
- Interest rate: Is the business loan interest rate variable or fixed? If the lender charges a factor rate, it’s worth converting it to better compare against other offers. Also calculate how much in interest charges you’ll pay over the life of the loan.
- Repayment term: When do payments start? Do you prefer daily, weekly or monthly payments? Is there any option to delay or pause payments during times of financial hardship?
- Time to fund: How long does the application process take? Traditional bank and SBA loans can take two weeks to three months to approve and fund, while online lenders can typically deliver funds within one to three business days. Keep in mind that the quickest business loans aren’t always the most affordable.
- Additional fees: Make sure to check the fine print for extra fees, such as origination fees, late charges and business loan prepayment penalties.
Before closing your loan
After approval, the closing process involves reviewing documentation that will determine the terms of your selected loan. A business loan agreement is a legally binding contract that dictates your interest rate and repayment schedule.
Ensure you thoroughly understand what the lender is asking of you and what the terms mean for your business’s financial future. After you sign, you’ve agreed to everything in the contract — including what happens when you make late payments or can’t repay the debt.
Additional business funding options
In addition to traditional business financing, here are some other ways to fund your company.
Merchant cash advance
A merchant cash advance (MCA) gives you a lump sum of cash upfront against your future sales. You repay the merchant cash advance through a percentage of daily or weekly credit card sales.
While this type of funding can deliver cash fast, it tends to be a more costly way to borrow money for your company.
Invoice factoring
Invoice factoring allows businesses to sell unpaid invoices to a factoring company in exchange for a cash advance.
This can be a good option for cash-strapped businesses or those with poor or limited credit, but you can typically get only 70% to 90% of your invoice face value.
Invoice factoring can also get expensive, with factoring rates going as high as 8.25%.
Business credit cards
Business credit cards can help track business expenses and unlock cash back or travel rewards while monitoring employee spending.
To avoid paying a high annual percentage rate, pay off your credit card statement balance in full by the due date.
Small business grants
Federal government agencies, state governments, private corporations and foundations offer grants for small businesses.
You can narrow your search based on business type, location and demographics, such as minority business grants and business grants for women.
Because grants provide free money that typically doesn’t need to be repaid, competition can be stiff.
Crowdfunding
Business crowdfunding is when you ask family, friends and the general public for donations to kickstart your business.
This method can help you test out a business idea and generally appeals to startups or businesses struggling to get funding.
Just be aware that some crowdfunding platforms deduct a fee before distributing your total donations.
Peer-to-peer lending
Peer-to-peer lending, or P2P lending, is a type of financing where individual and commercial investors provide the loan funds rather than a financial institution.
A P2P online platform acts as the coordinator between you and the investors, helping process and finalize your loan details.
While P2P loans typically have more lenient qualifying requirements, they can take longer to fund than other types of financing. Additionally, P2P lending might not be available in your state.
Personal loans
Personal loans for business may be easier to get if you struggle to meet the strict eligibility criteria for a business loan.
However, this type of financing relies on your personal credit and income, putting your personal credit and assets at risk.
And personal loans won’t help you build business credit, nor can you claim the loan interest as a qualified business tax deduction.
Bootstrapping
Bootstrap financing is when you use your own financial resources to fund your business.
Startup businesses may use bootstrapping to get off the ground, but you risk not recouping your investment if your business fails to thrive.
Frequently asked questions
Yes, bad credit business loans are available for business owners with personal credit scores as low as 500. However, these loans tend to come with higher interest rates and less flexible repayment terms.
A personal guarantee requires you as the business owner to be personally responsible for the company’s debt in case of default. A personal guarantee is fairly common on small business loans because it lowers the risk for a lender. But as the business owner, it may limit any protections your business structure offers.
Online lenders may be the best option to get a startup business loan with no money. Unlike brick-and-mortar banks that often have stricter eligibility requirements, some alternative lenders will work with you after about six months in business. If you can’t find a suitable lender providing business loans for new businesses, you can consider alternative options like crowdsourcing, self-funding or grant funding.
Each lender will have its own criteria based on the loan type. In general, you need a personal FICO Score of at least 500 to get a small business loan. But the lowest business loan interest rates are typically reserved for borrowers with higher credit scores. You can check and monitor your credit score for free with LendingTree Spring.
Most lenders look for minimum monthly or annual revenue when you apply for a loan. It’s common to expect a minimum annual revenue requirement of $50,000 or more for unsecured loans. However, you may be eligible for a business loan with a lower annual revenue if you can provide collateral.
If you were rejected for a business loan, revisit the reason why. Focus on improving your personal credit and business credit scores. If you haven’t operated in business long enough, wait a bit. In the meantime, consider a small business credit card or a personal loan to access capital for any immediate business needs.