Best Low-Interest Business Loans in October 2024

Compare top lenders to find the best low-interest loan for your business

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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By Lindsay VanSomeren | Edited by Abigail Bassett and Janet Schaaf | September 30, 2024
Best For:
Bank term loans
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Best For:
Line of credit
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Best For:
Government loans
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Best For:
Startups
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Best For:
Women and Minorities
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Best For:
Veterans
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Best For:
Fast financing
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Best For:
Equipment financing
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Best For:
Interest-free microloans
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Low-interest lenders at a glance

Bank of America: Best bank for low-interest business loans

$10,000 and higher

6.50%

12 to 60 months

700

2 years

Pros
  • Free business credit score updates
  • Many other business financing options
  • Higher-than-average customer satisfaction
Cons
  • Higher rates for non-current customers
  • Non-current customers can’t apply online
  • Perks for current banking customers only

Why we picked it

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If working with large banks is more your style, consider Bank of America — especially if you opt to use it for everyday business banking as well. Existing small business customers have access to online business loan applications, as well as the Preferred Rewards program that offers tiered discounts and perks for businesses that keep an average daily balance of at least $20,000 in their business banking accounts.

Big banks often get a bad rap for customer service, but at least on the small business side of things, you can rest assured that you’ll probably have a good experience with Bank of America. The bank was rated fairly highly in terms of small business customer satisfaction by the independent reviewer J.D. Power in 2023.

Wells Fargo: Best low-interest line of credit

$5,000 to $1,000,000

8.50%  Based on the current prime rate of 8.00% + an added 0.50% from Wells Fargo for their Prime Line of Credit. Other Wells Fargo lines of credit have higher interest rates.

N/A; lines of credit are ongoing

680

Not specified

Pros
  • Available for startups
  • Offers rewards on spending
  • Scalable options for most businesses
Cons
  • Few business loan options
  • Requires personal guarantee
  • May come with an annual fee

Why we picked it

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Aside from SBA loans, Wells Fargo doesn’t offer much in the way of term loans. But if you’re looking for an affordable and flexible source of funds — for all businesses, new and established — Wells Fargo may be a good option.

It offers three business lines of credit to choose from, with the lowest-level option geared towards businesses that have been open for two years or less. Its Prime Line of Credit, on the other hand, is geared toward larger businesses with at least $2,000,000 in annual sales.

SBA 7(a) loans: Best government-sponsored low-interest business loans

Up to $5,000,000

Varies by lender; maximum of 6.50% currently

120 to 300 months depending on loan purpose

Varies by lender; typically 650 or higher

Varies by lender; often 2 or more years

Pros
  • Lower interest rates
  • Wide choice of term lengths
  • Smaller down payment required
Cons
  • Options vary by lender
  • Long processing times
  • Stricter loan requirements

Why we picked it

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If you’ve got the time and credentials to put together a strong business loan application, chances are an SBA loan will be among your best options for low-interest business loans. The U.S. Small Business Administration (SBA) partners directly with individual lenders who offer these loans, so you’ll have a wide range of sources to choose from.

Each individual lender decides what you’ll need to qualify within the bounds of SBA guidelines. This means that while there technically is no specific minimum requirement for credit scores or time in business, these loans may also be an option for startups — if you can find a lender to approve your application.

Fundbox: Best low-interest business loans for startups

Up to $150,000

4.66% for a 12-week repayment plan

3 to 6 months

600

6 months

Pros
  • Quick funding timeline
  • Builds business credit
  • More accessible qualification requirements
Cons
  • Line of credit; not a loan
  • Requires weekly payments
  • Confusing financing structure

Why we picked it

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Fundbox doesn’t have a true business loan, but instead it offers a hybrid loan/line of credit that may be more useful to startups that may need to draw funds frequently while they’re figuring out their business operations. Fundbox’s business lines of credit allow you to draw against your available credit limit as needed.

However, unlike traditional lines of credit, you’ll choose a repayment plan right away, with a 12– or 24-week term length. Although payments are made on a weekly basis, rather than monthly, you’ll have a clear and quick path to repaying your funds.

Accion Opportunity Fund: Best low-interest business loans for women and minorities

$5,000 to $250,000

8.49%

12 to 60 months

Not disclosed

12 months

Pros
  • Non-profit lender
  • Easier loan qualification
  • Offers excellent support programs
Cons
  • Not transparent with details
  • Requires annual revenue minimum of $50,000
  • Not available in Mont., N.D., S.D., Tenn. or Vt.

Why we picked it

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Accion Opportunity Fund (AOF) distributed an average loan amount of $46,674 to more than 2,400 borrowers in 2022, most of whom were underrepresented minorities among small business owners. Eight out of ten borrowers were non-white, for example, and 57% of loans were made to low- to moderate-income businesses. The majority of borrowers were men, at 58%, with women making up 34% of borrowers, and 8% of borrowers not being identified by gender.

Unlike a traditional small business lender, AOF operates as a nonprofit, offering business coaching and support programs along with small business loans, with the profits being reinvested in future loans and educational programs.

SBA Express loans: Best low-interest business loans for veterans

Up to $500,000

Varies by lender; maximum of 6.50% currently

Up to 300 months

Varies by lender; typically 680 or higher

Varies by lender; often 2 or more years

Pros
  • Quicker funding timeline
  • Use funds for wide range of purposes
  • No collateral needed for loans less than $50,000
Cons
  • Smaller loan limit
  • Can still be tough to qualify for
  • Can still take longer than other loan types

Why we picked it

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Technically still a part of the SBA 7(a) loan program, the SBA Express loans may be more appropriate if you only need a relatively small amount of funding. You can still use these funds for a wide range of purposes, including real estate.

The main advantage to an SBA Express loan is that it’s faster to get because the lender has more control over approval, rather than requiring the typically thorough review by the SBA.

Funding Circle: Best low-interest business loans with fast financing

$25,000 to $500,000

15.22%

6 to 84 months

660

2 years

Pros
  • Fast funding speeds
  • Transparent loan requirements
  • Hard credit check generally not required
Cons
  • Steep origination fees
  • Not available for startups
  • Requires collateral and personal guarantee

Why we picked it

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If you need a low-interest business loan fast, Funding Circle may be your best bet. It takes as few as six minutes to complete and submit an application, one business day to receive a decision, and if approved, your loan funds will be disbursed in as few as 48 hours.

Most lenders charge higher interest rates for fast-turnaround loans, but Funding Circle is still relatively affordable. It does, however, make up for the lower rates by charging higher origination fees ranging from 4.49% to 10.49% of your loan amount.

Taycor Financial: Best low-interest equipment financing

Up to $2,000,000

4.99%

12 to 84 months

550

3 months

Pros
  • Available to startups
  • Next-day funding timelines
  • Offers many types of business financing
Cons
  • Confusing loan process
  • Hides important loan details
  • May charge based on a factor rate

Why we picked it

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Taycor Financial is an alternative online small business lender that offers a wide array of financing options that may overlap in certain areas, which can be confusing for borrowers looking for a straightforward term loan.

Options for equipment financing are lumped in with working capital loans, for example, and equipment purchases may be structured as a lease or a loan, the implications of which are important to understand. Your financing may also be offered at a low interest rate or you may be charged a factor rate, which can make it difficult to compare financing options.

Kiva: Best interest-free microloans

$1,000 to $15,000

0.00%

Up to 36 months

None

None

Pros
  • Builds business credit
  • Truly interest-free loan
  • Easier for many new businesses to qualify
Cons
  • Requires some private fundraising
  • Long, non-traditional funding process
  • Tougher approval without compelling story

Why we picked it

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If you’re early in your entrepreneurial journey and can generate more social clout than financial credentials, Kiva — yes, the microlending platform — may be the perfect fit. It now offers small, interest-free business loans to people in the U.S., but you’ll face a roundabout application process that’s different from any lender.

First, you’ll need to have a buzzworthy business idea or funding need, since Kiva relies on “social underwriting” (TikTok-worthy, in other words). You’ll create a public profile (photos help), which Kiva will review within 15 days. If approved, you’ll enter a “Private Fundraising Period” where you’ll need to gather between five and 35 “lenders,” which can be friends and family, to pledge a minimum of $25 toward your loan. Once that happens, your loan will be listed on Kiva’s public page for 30 days. If enough individual people pledge toward your loan, it’ll be disbursed; if not, your lenders receive their funds back, and you’ll need to find alternative funding.

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What are low-interest business loans?

Low-interest business loans may be offered by some lenders to well-qualified borrowers with an established business history, good credit and consistent income. Some lenders also offer government-sponsored SBA business loans, which tend to feature lower rates than other types of installment loan financing.

As an example, banks in urban areas were charging a median interest rate of 7.3% during the second quarter of 2023, according to the Federal Reserve.

How to get a low-interest business loan

Getting a low-interest business loan takes some preparation, but it’s well worth the extra work. You could save thousands of dollars on your financing costs, which you can use to reinvest into your business. Here’s how to go about the process:

1. Check your financials

Most business loan lenders look at the same set of factors when deciding how much to charge you for a loan. The better your qualifications in each category, the higher your odds of securing a low-interest business loan.

  • Revenue: Businesses with consistently high sales — especially relative to any other debt payments — generally qualify for the best low-interest business loans.
  • Collateral: If you’re using your business loan to purchase equipment, look into getting a secured business loan. These may offer the lowest rates of all since your lender can repossess the collateral to recoup its investment if you don’t repay the loan.
  • Documents: Gathering your financial documents can speed up your application. Make copies of your recent personal and business tax returns, bank statements, profit and loss statement, business registration, licenses and any business formation documents.
  • Credit score: You’ll need a good personal and business credit score to qualify for the best low-interest business loans. Making on-time payments on a small to moderate amount of debt is the best way to grow a good credit score.
  • Business plan: Writing a comprehensive business plan complete with a market analysis helps you identify your funding needs and can help convince a lender of your professionalism.
  • Time in business: Lending to newer businesses is risky, so you likely won’t score a low-interest business loan until you’ve been in business for three or more years.

2. Search for a lender

Many different types of lenders offer business financing, each of which may have certain advantages and disadvantages — particularly when it comes to finding a low-interest business loan.

Banks and credit unions: It can be tough to qualify for a business loan from a bank or credit union, although small banks may offer better approval odds. Banks and credit unions that you already bank with may be more likely to approve you for financing, however.

Online lenders: Some lenders operate entirely online and only offer business loans. These can be a quicker and easier option — especially for less-qualified businesses — but financing costs are often much higher.

SBA lenders: SBA loans are offered through certain banks, credit unions and other lenders. These loans can take longer to get, but they tend to offer lower interest rates than a typical business loan.

Nonprofits and local organizations: Although more rare, some nonprofit lenders offer low-interest business loans to minorities who may not qualify for favorable business financing offers from other lenders.

You can get a rough idea of your business financing costs by using a business loan calculator.

Alternatives to low-interest business loans

If you cannot qualify for a low-interest business loan, you may have better luck with other options. It’s a good idea to consider some options that may work even better for you than taking on more debt.

Personal loan: Some lenders allow you to use an unsecured personal loan for business expenses, but these may carry higher interest charges.

Crowdfunding: If you can sell your idea in advance, you may be able to raise funds on a platform such as Kickstarter.

Business grants: Minority business owners, in particular, may be able to find options for free money through business grants.

Personal savings: Many business owners use personal savings or even financial support from friends and family to launch their businesses.

Business credit cards: If your business only needs a small amount of startup capital, such as a laptop, you may be able to finance it with a business card featuring a 0% APR intro offer.

Pros and cons of low-interest business loans

ProsCons

  Expand your business

  Predictable monthly payments

  Build business credit by paying on time

  Provide funding to hire more employees

  Long funding timeline

  Stricter loan qualifications

  May require personal guarantee

  Late payments can damage credit score

  Financing costs reduce net business income

  Higher risk of cash flow problems and business failure

How we chose the best low-interest business loans

We reviewed the leading small business lenders to determine the overall best nine low-interest loans. To make our list, lenders must meet the following criteria:

  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Best low-interest summary

Frequently asked questions

Credit unions and banks generally offer the lowest rates on most types of financing. Online lenders, in contrast, generally charge the highest rates.

The median interest rate on a business loan was 7.3% during the second quarter of 2023 among banks operating in urban areas, according to the Federal Reserve. If you can find a business loan charging a lower rate, you can be confident it’s a good rate.

Businesses generally pay lower interest rates than individual people applying for personal loans. That’s because business loans are typically secured with business assets, and a business must undergo extensive vetting with most financial institutions before being approved for a loan.