There are numerous small business loans available for you, based on your creditworthiness, current business performance, and desired use for those funds. You can find out which one might be perfect for you by completing the quiz by reading through the short summaries of every loan type below.
SBA Loans
An SBA loan is guaranteed by the Small Business Administration (SBA) and they generally have the highest rates and maximum terms of all small business financing choices. They’re a great fit for long-term funding and can be used for working capital, to buy a business, or to refinance your small business debt.
Loan Number
- Up to $5 million
Interest Rates & Charges
- Interest Rate: 5% — 10% (check present SBA loan prices )
- Origination Fee: 0.5 — 3.5percent
- Loan Packaging Fee: $2k — $4k
- SBA Guarantee Fee: 3 — 3.5% (waived if loan amount is under $150k)
Loan Terms
- Repayment Conditions: Up to 10 years
- Time to Funding: 30 — 90 times
SBA Loan Qualifications
- Minimum Credit Score: 680 (assess your credit score for free here)
- Collateral: Typically required
- Down Payment: 10-20percent
- Period in Business: Startup — two years
Where to Find SBA Loans
SBA loans can be seen at traditional lenders, like banks. You can read our article on the best 100 SBA lenders to learn more. You may also learn more by reading about the different types of SBA loans.
How to Apply for SBA Loans
The application process for all SBA loans is pretty similar, regardless of what lender you operate with. For assistance with the application process, read our article on the best way to apply for an SBA loan.
Short Term Business Loans
Short-term loans are usually offered by online lenders that can leverage technology to examine your own credit report and get you financed in as quick as 1-3 business day. These loans are fantastic for short term working capital needs. They have an expensive APR, but the entire cost of capital can be less than carrying a long-term loan for 5 or 10 years due to the repayment term.
Loan Amount
- Up to $500k
Interest Rates & Charges
- APR: 30 — 50%
Loan Prerequisites
- Repayment Terms: 1 Month — 3 Years
- Time to Funding: 1 — 3 Days
Short Term Loan Qualifications
- Minimum Credit Score: 500 (check your credit score for free here)
- Minimum Time in Business: 1 Year
- Minimum Annual Business Revenue: $50k
Where to Find Short Term Loans
You may learn more by reading our comparison of both the best short term creditors, OnDeck and Kabbage.
How to Employ
Most short term working capital loans are supplied by online lenders that provide an extremely straightforward and speedy application process. You will fill out an online application that asks for basic personal and business info. You may normally fill this out and get a funding decision within about ten minutes and, if accepted, get financed in 1-3 days.
Small Business Line of Credit
A business line of credit is a revolving line it is possible to refund and use over and over again. You will only pay interest on the amount you borrow and you also won’t have to get approved every time you need funding. In this way it functions just like a small business credit card with greater limits. This really is a superb financing option for businesses with unexpected expenses or recurring cash flow interruptions.
Loan Number
- Up to $100k
Interest Rates & Fees
- APR: 9.99 — 40%
Loan Terms
- Repayment Terms: Up to 12 Months
- Time to Funding: 1 — 3 Days
Small Business Line of Credit Qualifications
- Minimum Credit Score: 550 (assess your credit score for free )
- Minimum Time in Business: 1 Year
- Minimum Annual Business Revenue: $50k
Where to Find a Small Business Line of Credit
You can discover a small business line of credit at a variety of lenders which range from conventional banks to online lenders. Read our article on the greatest small business line of credit suppliers to find the right one for you.
How to Apply
Your application procedure is going to depend on which kind of lender you’re applying with. Read our article to find out more about a company line of credit and how to apply.
Business Credit Cards
Business credit cards offer a small credit line you are able to borrow from over and over again. They’re the easiest form of financing to qualify for and should be part of every small business owner’s financial toolkit. Many come with 0 percent introductory rates or advantages like cash back or rewards points for using the card. You can use these rewards to benefit your company for working capital expenditures you’ll pay.
Loan Amount
- As much as $100k, but typically less than $30k
Interest Rates & Fees
- Interest Rate: 12 — 29%, some have 0% introductory offers
- Annual Fee: $0 — $350+
Loan Conditions
- Repayment Terms: 30 days or you’ll be charged interest with no official due date
- Time to Funding: Immediately — 1 Week
Business Credit Card Qualifications
- Minimum Credit Score: 650+ to greatest deals (assess your credit score for free here)
Where to Locate Business Credit Cards
Learn more by reading our guide to the best small business credit cards. If you’re a newer business then you may have to acquire a personal credit card. In addition, we have a post on the best personal cards for business owners.
How to Apply
It is possible to apply for many business credit cards on the internet, and many will provide you an immediate approval decision. You may need to wait a couple of days to find an official decision in the email from a few, or to acquire your financing amount. Once accepted, you will typically get your card in less than two weeks.
Equipment Financing
Equipment funding is the best option for businesses looking to purchase large equipment with a very long shelf life. The equipment itself serves as collateral for these small business loans, which makes this a very affordable financing choice. This may be structured as small business loans or rentals, with the amount you’ll pay to own the equipment being the biggest difference.
Loan Amount
- $10k — $500k (up to 95 percent of equipment costs)
Interest Rates & Charges
- Interest Rates: 6 — 9 percent
Loan Prerequisites
- Repayment Terms: 2 — 7 Years
Equipment Financing Qualifications
- Minimum Credit Score: 600 (check your credit rating for free here)
- Down Payment: 5-20percent
- Collateral: Financed gear
Where to Locate Gear Funding
You’ll find equipment loans in specialty and traditional lenders throughout the country. Read our article to learn more about gear loans or the different kinds of equipment rentals.
How to Apply
You will typically undergo another application process based on if you’re applying for a loan or a lease. Each creditor may vary in the overall process as well. For more information you can read our gear financing content or take our equipment financing quiz to find out whether you qualify.
Accounts Receivable (AR) Funding
Invoice financing — or AR funding — is a loan collateralized by the invoices you’ve billed your clients due in the next 90 days. Essentially, the lender will provide the money you’re expected to get from your client invoices in exchange for a proportion of the bill value, or a small fee. This is a superb alternative for companies that bill on net terms.
Loan Number
- Up to $5 million (worth of bills )
Interest Rates & Fees
- Fees: 2 — 5% per month
Loan Terms
- Repayment Conditions: 1 — 24 Weeks
- Time to Funding: 1 — 3 Days
Accounts Receivable Financing Qualifications
- Minimum Credit Score: Typically no credit score
- Additional Prerequisites: Invoice creditworthy B2B, B2G, or B2C clients
Where to Locate AR Financing
To find the appropriate AR financing lender for you, read our comparison of their greatest accounts receivable funding suppliers.
How to Employ
You can learn more from our post on AR funding about the application process.
Invoice Factoring
Invoice factoring is available to companies that invoice B2B or B2G companies. It is short term working capital in exchange for a proportion of the value of your invoice. Contrary to AR Funding, with factoring you are going to sell your invoices to the Variable (creditor ) that will collect the bills on your behalf and refund you whatever remaining after they take out their fees.
Loan Number
- $10k+ per month (around 80% of invoice value)
Interest Rates & Charges
- Fees: 0.5 — 5 percent each month
Loan Terms
- Repayment Conditions: No payments up to 90 times
- Period to Funding: 3 — 10 Days
Invoice Factoring Qualifications
- Minimum Credit Score: N/A — Lender is more interested in the creditworthiness of your clients.
- Other Requirements: Must bill creditworthy B2B or B2G clients.
Where to Find Invoice Factoring
How to Apply
Invoice factoring will ask that you sell your invoices to your factor, or lender. We cover the process in our manual to bill factoring. You could even have a look at our article on how invoice factoring functions to get a better feeling of this financing product.
Purchase Order Financing
PO funding is an improvement from a funding institution to your supplier for goods you’re re-selling or dispersing to customers who’ve finished a purchase order. You can fund up to 100 percent of the purchase order costs with rates beginning at 1.8percent per month. This is a good solution for businesses that need capital to fulfill existing orders that are billed on net terms or on delivery.
Loan Number
- As much as 100 percent of the costs of merchandise needed to meet your client’s written order
Interest Rates & Charges
- Fees: 1.8 — 6 percent per month
Loan Conditions
- Repayment Conditions: 60 Days or less
- Time to Funding: 1 — 2 Fragrant
Purchase Order Financing Qualifications
- Minimum Credit Score: N/A but your customer and provider must be creditworthy.
- Other Requirements: coordinated purchase arrangement, in hand, from your client.
Where to Find Purchase Order Financing
We have put together a comparison of the best PO financing firms you can read to get the best one for you.
How to Employ
Rollover for Business Startups (ROBS)
A ROBS is a means to fund your company or cover the downpayment of an SBA loan by rolling over your retirement savings without paying taxes or even premature withdrawal penalties. This is a great option for business owners with $50k+ in a qualifying retirement account. A ROBS may be a complicated transaction, which is the reason we recommend working with an experienced supplier.
Funding Amount
There is not any minimum funding amount. However, to utilize many ROBS providers, you are typically required to have at least $50k in a qualifying retirement account.
- $50k+ to work with a ROBS supplier that can with the rollover
Interest Rates & Charges
- APR: Not one
- Setup Fee: $4,999 (should you utilize a ROBS provider)
- Ongoing Fee: $129 — $139 monthly for up to 10 eligible employees
ROBS Conditions
- Repayment Conditions: None — no loan obligations because it isn’t a loan
- Time to Funding: 2 — 3 Weeks
ROBS Qualification
- Minimum Credit Score: No credit rating since it is not a loan.
- Other Prerequisites: $50k+ in a tax deferred retirement account if you want to utilize a ROBS provider and your business must be a C Corp..
Where to Locate a ROBS
ROBS may be a complex trade, which is why we recommend using a seasoned ROBS supplier who can assist you get through the full procedure. You may learn more by reading our comparison of their best ROBS providers.
How to Employ
You’ll apply with a ROBS by filling out an internet application to prepare a one-on-one conversation using a ROBS provider. After that you’ll work though the ROBS trade process, which may be located in our ultimate ROBS guide.
Microloans from Nonprofit Lenders
Borrowers with moderate to bad credit or who lack adequate collateral for long-term loans can look in a microloan if they fall to a particular group like veterans, women, or minorities. These are small unique interest loans up to $50k for debtors with rates as low as 8 percent which are geared toward helping new or smaller businesses.
Loan Amount
- Up to $50k
Interest Rates & Charges
- Interest Rate: 8 — 13 percent
Loan Prerequisites
- Repayment Terms: Up to 6 Years
Microloan Qualifications
- Minimum Credit Score: N/A
- Other Prerequisites: Differ by lender but you should fall in the group they lend to.
Where to Find Microloans
Microloans can be hard to find since you need to find a financing partner that could specifically help you or your business based on your own characteristics. Microloans are very popular with startup businesses since there aren’t typically minimum credit requirements or business earnings requirements. You may learn more by reading our startup business loans post.
How to Employ
Each microloan lender has their own distinct application procedure. You may learn more by reading our microloan guide.
Merchant Cash Advance
A merchant cash advance (MCA) is a lump sum cash advance given in exchange for a daily proportion of your credit and debit card receipts. These are costly loans using APR as large as 120% or more, and ought to be regarded as a last resort funding choice. You’ll only qualify if you bring in most of your revenue through credit card payments, which is good for seasonal businesses that need to plug cash flow openings.
Loan Amount
- $10k — $1 million
Interest Rates & Fees
- APR: 80 — 120 percent
Loan Terms
- Repayment Terms: Daily, up to 24 weeks
Merchant Cash Advance Qualifications
- Minimum Credit Score: 600 (check your credit score for free here)
- Additional Prerequisites: $50k+ at yearly credit receipts and 2years accepting credit card payments.
Where to Locate MCAs
You can come across the ideal MCA supplier for you by assessing our comparison of their very best merchant cash advance suppliers. If you’re looking at an MCA as a last resort, you can even consider MCA alternatives.
How to Employ
MCA lenders normally make it fast and easy to apply. You can learn about the process by reading our little business owner’s manual to merchant cash advances.
Bottom Line: Small Business Loans
As you can see, there are plenty of small business loans available for many different types of borrowers. For prime creditors, we recommend getting an SBA loan that has the best rates and longest terms of financing options. For a revolving credit line to manage recurring payments, we recommend looking at a business line of credit or even a company credit card.
