Best Low-Interest Business Loans in March 2024

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

Checking rates does not affect your credit score

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How Does LendingTree Get Paid?

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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Low-interest loans for your small business

By Lindsay VanSomeren | Edited by Abigail Bassett and Janet Schaaf | February 27, 2024
How Does LendingTree Get Paid?
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.

How Does LendingTree Get Paid?

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.
LenderUser ratingsBest forMin. interest rateMax. loan amountTerm lengthTime in business
User ratings coming soonBank term loans7.25%Not specified. Minimum of $10,000.12 to 60 months2 years minimumGet business loan offers
User ratings coming soonLine of creditPrime plus 0.50%$1,000,000N/A; available as a line of creditNot specifiedGet business loan offers
N/AGovernment business loansVaries by lender; maximum of 16.5% currently$5,000,000120 to 300 months, depending on loan purposeVaries by lender; often 2 or more yearsGet business loan offers
Fundbox logo
(30)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Startups4.66% for a 12-week repayment plan$150,0003 to 6 months6 monthsGet business loan offers
User ratings coming soonWomen and Minorities8.49%$250,00012 to 60 months12 monthsGet business loan offers
N/AVeteransVaries by lender; maximum of 16.5%$500,000120 to 300 months, depending on loan purposeVaries by lender; often 2 or more yearsGet business loan offers
User ratings coming soonFast financing11.29%$500,0006 to 84 months2 yearsGet business loan offers
(155)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Equipment financing4.99%$2,000,00012 to 84 months3 monthsGet business loan offers
User ratings coming soonInterest-free microloans0.00%$15,000Up to 36 monthsNoneGet business loan offers
Learn more about how we chose our picks.

Low-interest lenders at a glance

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

Loan amounts$10,000 and higher
Starting interest rate7.25%
Term length (months)12 to 60 months
Minimum credit score700
Minimum time in business2 years

Wells Fargo: Best low-interest line of credit

Loan amounts$5,000 to $1,000,000
Starting interest ratePrime plus 0.50%
Term length (months)N/A; lines of credit are ongoing
Minimum credit score680
Minimum time in businessNot specified

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

Loan amountsUp to $5,000,000
Starting interest rateVaries by lender; maximum of 16.50% currently
Term length (months)120 to 300 months depending on loan purpose
Minimum credit scoreVaries by lender; typically 650 or higher
Minimum time in businessVaries by lender; often 2 or more years

Fundbox: Best low-interest business loans for startups

Loan amountsUp to $150,000
Starting interest rate4.66% for a 12-week repayment plan
Term length (months)3 to 6 months
Minimum credit score600
Minimum time in business6 months

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

Loan amounts$5,000 to $250,000
Starting interest rate8.49%
Term length (months)12 to 60 months
Minimum credit scoreNot disclosed
Minimum time in business12 months

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

Loan amountsUp to $500,000
Starting interest rateVaries by lender; maximum of 16.50% currently
Term length (months)Up to 300 months
Minimum credit scoreVaries by lender; typically 680 or higher
Minimum time in businessVaries by lender; often 2 or more years

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

Loan amounts$25,000 to $500,000
Starting interest rate11.29%
Term length (months)6 to 84 months
Minimum credit score660
Minimum time in business2 years

Taycor Financial: Best low-interest equipment financing

Loan amountsUp to $2,000,000
Starting interest rate4.99%
Term length (months)12 to 84 months
Minimum credit score550
Minimum time in business3 months

Kiva: Best interest-free microloans

Loan amounts$1,000 to $15,000
Starting interest rate0.00%
Term length (months)Up to 36 months
Minimum credit scoreNone
Minimum time in businessNone
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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.