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The Best Business Loan and Financing Options of 2024

Updated Feb 29, 2024
Best for Self-Service
  • Loans up to $3 million
  • Algorithm matches you with a lender
  • Works with startups
  • Loans up to $3 million
  • Algorithm matches you with a lender
  • Works with startups
Best Marketplace Lender
  • Term loans from $25,000 to $500,000
  • Starting rate of 7.99%
  • Connects you with funding
  • Term loans from $25,000 to $500,000
  • Starting rate of 7.99%
  • Connects you with funding
Best for Technology Features
  • Lines of credit up to $150,000
  • Mobile app available
  • Accounting software integration
  • Lines of credit up to $150,000
  • Mobile app available
  • Accounting software integration
Best for Flexible Terms
  • Loans up to $5 million
  • Tailors terms to your needs
  • Fast funding available
  • Loans up to $5 million
  • Tailors terms to your needs
  • Fast funding available
Best for Fast Funding
  • Loans up to $1 million
  • Same-day funding
  • Terms from 3 to 60 months
  • Loans up to $1 million
  • Same-day funding
  • Terms from 3 to 60 months

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Access to capital is essential to running a small business, whether for funding operations, filling gaps in cash flow or taking advantage of an opportunity to grow and expand. There are many sources of funding for small businesses, including traditional banks, but their eligibility requirements and restrictions frequently exclude applicants. To help you choose from among seemingly endless fintechs, alternative lenders and funding marketplaces, we narrowed down the list to the best options. When examining different lenders to determine our best picks for small businesses, we considered the cost to borrow, whether the lender requires collateral, loan terms and more.

What is a Small Business Loan

A small business loan provides business owners with additional capital when needed. There are a variety of types of loans, including term loans, lines of credit, equipment loans, working capital loans and merchant cash advances (MCAs). Each type of loan can fill a different capital need. For example, you might take out a line of credit to help fill a cash flow gap. A working capital loan is good to help cover day-to-day expenses, and an equipment loan is good to help cover the costs of new equipment, such as machinery or computers.

Tip Bulb

How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.







Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
SBG Funding
Rapid Finance
Fora Financial
Noble Funding
Balboa Capital
Crest Capital
Rating (Out of 10)
Best for

Self service

Marketplace lender

Technology features

Flexible terms

Fast funding

Short-term loans

Customer service

Ease of approval

Equipment financing

Underserved borrowers

SBA loans

Loan size

$5,001 – $3 million

$25,000 – $500,000

up to $150,000

up to $5 million

up to $1 million

$5,000 – $1.4 million

$75,000 – $500,000

up to $250,000

$5,000 – $500,000

$5,000 – $150,000

up to $250,000

Time to fund

3 months – 5 years

12 – 36 months

12 – 24 weeks

1 – 5 years

3 – 60 months

up to 15 months

3 – 5 years

3 – 24 months

1 – 7 years


up to 5 years

Minimum sales requirement

1 – 7 days

3 days+

1 day+

1 day+

1 day or less

1 – 3 days

2 – 3 days

1 day

1 day

7 days+

7 days+

Required minimum credit score












Required minimum time in business












Review Link
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Our Reviews Best Loan Option for Self-Service

  • Loan terms are broad, ranging from three months to five years
  •’s algorithm will match you with the best source of funding in its network.
  • Funding may take up to seven days.
Editor's Rating: 9/10
See Offers is a marketplace lender designed to match you with the most appropriate funding source for your business’s needs. The platform leverages its proprietary data and employs algorithms to predict the best match. strives to work with every applicant and makes it easy to apply for funding using technology, making it our best business loan provider for self-service. can match you with a wide variety of loans in its network. Loan sizes range from $5,001 to more than $3 million, with terms going from as short as three months to as long as five years. Rates start at 9%, which is about the middle of the pack for lenders we reviewed. You can expect your loan to be funded within seven days if approved.

The platform differentiates itself from the competition by making it easy for business owners to identify a funding option that works best for their unique needs. The online application is quick and easy to fill out, and the algorithm uses’s trove of data from previous users to pinpoint a match based on the information you provide.

Importantly, also gives you the option to speak to a representative to ask questions and obtain guidance on documentation and the company says that most borrowers utilize this feature. is willing to work with many types of businesses, including startups. For its unique ability to match businesses to funding sources automatically, is our pick for the lender with the best self-service.

Biz2Credit: Best for Marketplace Lending

  • Biz2Credit provides a platform for a variety of flexible business loans with transparent pricing and competitive rates.
  • You can borrow up to $500,000 as a term loan and pay it back over 12 to 36 months.
  • To qualify for a term loan, you must have more than $250,000 in annual sales and a credit score of at least 660. You also have to be in business for 18 months before you can get a loan.
Editor's Rating: 8.8/10
See Offers

Biz2Credit is our choice for the best marketplace lender because its platform connects small business owners with various funding types and it offers fast approval and transparent pricing. We like that Biz2Credit’s platform matches small businesses with sources of capital that meet their unique needs. You also get a hands-on approach from Biz2Credit, with access to funding specialists who can help you determine the best loan terms for your business.

Biz2Credit offers term loans, working capital loans and commercial real estate loans through its lending platform. We like that it is transparent about loan rates and terms. Term loans charge simple interest, which means that borrowing costs don’t compound. That saves you money on interest payments because the overall rate stays fixed. Biz2Credit’s term loan rates start at 7.99%, varying by credit score and other factors. It also offers fast funding turnarounds of 72 hours for term loans and 24 hours for working capital loans.

Biz2Credit boasts a quick application process, which is attractive to time-crunched business owners and offers discounts for connecting a business checking account. Not all alternative lenders provide these benefits. Biz2Credit’s ability to connect you with the right loan through its extensive network makes it our best pick for marketplace lender.

Fundbox: Best Loan Option for Technology Features

  • You can integrate Fundbox with popular accounting software.
  • Fundbox offers business lines of credit with transparent pricing and fixed payments.
  • Fundbox’s lines of credit have terms of 12 to 24 weeks, shorter than those of other lenders.
Editor's Rating: 8.7/10
See Offers

Fundbox is our choice as the best alternative lender for technology features. Its digital platform integrates with popular accounting software, such as QuickBooks, and allows you to match payments to cash flow. Fundbox also offers transparent pricing, quick and easy approvals and fast funding.

Fundbox specializes in providing business lines of credit. The line of credit is available for up to $150,000 for 12 to 24 weeks, with a starting interest rate of 4.66% for the 12-week product. Fundbox is currently testing term loans on an invitation-only basis for qualified borrowers. These short-term loans are structured to be repaid over the course of six to 12 months.

Fundbox’s technology platform is what separates this lender from the competition. Features include a cash flow insights tool, a paid subscription product called Fundbox Plus and a mobile app for both Android and iOS devices. Fundbox’s Flex Pay service acts as a middleman between a business’s bank account and payroll vendor to ensure that funds are always available for payroll and vendor expenses. The company also integrates with various accounting software solutions, including QuickBooks, FreshBooks and Zoho.

SBG Funding: Best Loan Option for Flexible Terms

  • SBG provides several financing types and loan sizes. Funding is fast and there are no additional fees.
  • Repayment terms are very flexible.
  • You need $12,000 in monthly revenue to qualify for a loan.
Editor's Rating: 8.8/10
See Offers

SBG Funding is our choice as the best alternative lender for flexible terms because it offers different funding types, can issue loans of up to $5 million and will give you a decision in less than 24 hours. SBG Funding is also willing to customize its terms to fit your needs, rather than forcing you into a one-size-fits-all product.

SBG Funding is an alternative lender that provides small businesses with funding to support their growth. Borrowers can access term loans, lines of credit and equipment financing. We like that SBG offers you a choice of loan types. Some business owners may prefer a line of credit, drawing on it when needed while others want a lump sum to cover operating expenses or funding for a pricey piece of equipment. You can access funding for all this through SBG.

SBG is also flexible in repayment terms. Its small business loan terms range from one to five years, with funding up to $5 million. You can pay these loans back on a biweekly or monthly schedule. The terms for a business line of credit range from six to 24 months, with available credit of up to $250,000. SBG’s equipment financing terms are also flexible, lasting between one and 10 years. You can finance up to 100% of the equipment value, and there is no penalty for paying off the loan early.

Rapid Finance: Best Loan Option for Fast Funding

  • Rapid Finance offers a variety of small business loans with flexible repayment terms.
  • Same-day funding is available thanks to fast processing and an easy application process.
  • You must have a business checking account to qualify and receive funding.
Editor's Rating: 8.8/10
See Offers

Rapid Finance is our best pick for fast funding because it has an easy online or mobile application, quick approval turnaround and same-day funding. We like that Rapid Finance offers a variety of loan products, including small business loans, MCAs, short-term bridge loans and lines of credit. It services a broad array of industries and is dedicated to helping small businesses get funding fast.

Another reason we selected Rapid Finance as the best for fast funding is its application process. To apply, you will need to provide a business bank account and three months of bank statements. That is a small amount of documentation compared to applying for a conventional bank loan or Small Business Administration (SBA) loan. You can borrow up to $1 million with this alternative lender for a term loan ranging from three to 60 months. Rapid Finance is willing to work with borrowers regardless of their credit score as it looks at the business’s overall performance when evaluating applications.

For small business owners looking for fast funding, Rapid Finance stands out. Regardless of the loan product, this lender can get money in your account on the same day as approval. Add a straightforward application that can be completed from a smartphone, and it’s clear why Rapid Finance is our best pick for fast funding.

Fora Financial: Best Loan Option for Short-Term Loans

  • Short-term loans and MCAs come with a term of up to 15 months.
  • There are no additional fees.
  • To qualify for a loan, you must have gross annual sales of $240,000.
Editor's Rating: 8.5/10
See Offers

Fora Financial is our best pick for short-term loans because it offers loans of up to $1.4 million, with terms no longer than 15 months. With Fora Financial’s loans, you get flexible payment schedules, discounts for early payoff and no collateral requirements. This lender serves many industries, including construction, medical, automotive, wholesale and manufacturing. We also like that there are no restrictions on how the money can be used.

Fora Financial offers an online application and requires only three months of bank statements. You can find out if you qualify within 24 hours of applying, and you can have the funding in your account within 72 hours after approval. Fora’s minimum qualifications are relatively relaxed compared to those of other lenders. You need to have six months in business, at least $12,000 in gross sales, a personal credit score of 500 and no open bankruptcies. We also like the online portal, where you can monitor your loan progress in real time.

Sometimes, you just need access to capital for a short time and don’t want to spend years making interest payments. Fora Financial’s focus on this type of funding and ease of application and approval make it our best pick for short-term loans.

Noble Funding: Best Loan Option for Customer Service

  • Noble Funding is a decades-old lender with a strong reputation for customer service.
  • Noble works with a variety of industries, offers flexible terms and provides ongoing support once it issues funding.
  • Noble Funding requires a FICO score of at least 650.
Editor's Rating: 8.9/10
See Offers

Noble Funding offers quick and easy small business financing, with starting rates and requirements that are competitive with those of similar providers we reviewed. What stands out is Noble Funding’s emphasis on transparency, in-person assistance and zero fees. The company earns high praise from customers on independent review sites, which makes Noble our pick for the business funding provider with the best customer service.

If you’re looking for long-term financing, Noble has loan options of up to $500,000. Noble’s bridge loans range from $100,000 to more than $4 million for short-term financing. If you choose its BankLite long-term loan, you can be approved within two to three business days. Those loans start at 8.99% interest and don’t require any collateral. You do need a credit score of at least 650 to qualify, though. The short-term bridge loans have less stringent requirements, same-day approval and funding as soon as two days.

Noble Funding offers a variety of financing options, including short-term bridge loans, long-term business loans and asset-based loans. It doesn’t charge any upfront fees and receives compensation only if the borrower is funded. Noble Funding prides itself on listening to clients, analyzing their needs and developing financial packages unique to each business. With so many funding options, it can be challenging to determine which is best for you. We like that Noble goes the extra mile, making it our best lender for customer service.

Balboa Capital: Best Loan Option for Ease of Approval

Balboa Capital
  • Balboa Capital offers fast approval, same-day funding and a variety of loans that have no hidden fees and do not require collateral.
  • Documentation requirements are minimal compared with those of other lenders.
  • Balboa Capital’s small business loans have a maximum term of 24 months.
Editor's Rating: 8.6/10

Balboa Capital offers quick funding and a simple online application that can be completed within minutes. Reams of paperwork and documentation are not required and there are no collateral or hidden fees. If approved, funds can be immediately deposited into your account. This straightforward process makes Balboa Capital an attractive lender for business owners looking for an easy approval process.

We like that Balboa Capital is willing to look at more than your credit score when approving loan applications. Although there is a minimum FICO threshold, Balboa Capital also looks at the business’s fundamentals and growth prospects when underwriting loans.

Balboa Capital offers several niche financing options that aren’t available from many other business loan providers. The company offers a specialized product for franchisees and provides vendor funding for business owners who want to extend financing to their customers. Borrowers can take out short-term loans of up to $250,000 for three to 24 months. With application decisions made within hours, Balboa Capital is a good choice for businesses seeking an immediate answer to their funding needs.

Crest Capital: Best Loan Option for Equipment Financing

Crest Capital
  • Crest Capital offers multiple equipment financing options with flexible terms.
  • Same-day funding is available for loans less than $250,000.
  • You need to be in operation for at least two years to qualify.
Editor's Rating: 8.7/10

Crest Capital is our choice as the best alternative lender for equipment financing because it provides a variety of flexible funding options that are designed specifically for businesses looking to invest in equipment. Crest Capital offers loans between $5,000 and $500,000, fast funding and competitive rates.

Crest Capital provides small business owners with equipment financing of as much as 100% of the cost, including “soft” costs such as installation. If you want to finance equipment for less than $250,000, Crest Capital requires only that you fill out a quick and easy online application. We like that you can check your eligibility on its website before proceeding. You don’t want to waste time applying for a loan you have no chance of getting.

We like Crest Capital’s flexible terms. You can finance your equipment for 24 to 84 months. Some lenders will let you finance equipment for a short period only. We also like that Crest Capital enables you to finance used equipment, even those from private sales. Crest Capital also offers Section 179 qualified financing, which allows tax deductions on the cost of equipment and is willing to work with you to create a loan or lease that meets your needs. Specialized loans for business-related vehicles and software are available as well. This focus on providing great options for businesses looking to reinvest in their operations is what makes it our best pick for equipment financing.

Accion: Best Loan Option for Underserved Borrowers

  • Through the Accion Opportunity Fund, business owners can get access to microloans of up to $150,000.
  • Accion is willing to work with all types of borrowers and focuses on helping business owners in underserved markets.
  • Not all small businesses are eligible for an Accion loan.
Editor's Rating: 9/10

Accion Opportunity Fund is our choice as the best alternative lender for underserved borrowers because this nonprofit is dedicated to helping small businesses that have trouble accessing traditional funding. With loans ranging from $500 to $150,000, a willingness to work with business owners with imperfect credit and its commitment to helping small businesses grow, Accion stands out from other microlenders.

We appreciate Accion’s focus on underserved markets, including women-owned, disability-owned and minority-owned businesses. It’s also willing to work with startups and food and beverage businesses that are often unable to access funding easily.

Accion offers options for small loans, which is a plus for many businesses that are getting started. Term loan rates start at just 5.99% and vary by credit score. Another plus for us is Accion’s flexibility. The lender doesn’t try to shoehorn borrowers into a one-size-fits-all solution but, instead, will work with you to create a repayment schedule that fits your situation. Importantly, Accion is also willing to work with borrowers without any credit history, a key differentiating factor from other lenders that focus heavily on credit scores.

The Accion Opportunity Fund provides free coaching, networking and other resources for small business owners. Although not all businesses will fit the profile that Accion is looking for, those that do should give it serious consideration. The focus on addressing the needs of businesses that are often shut out of funding is what makes Accion our best pick for underserved borrowers.

Truist: Best Loan Option for SBA Loans

  • Truist is an SBA Preferred Lender, which means it understands the ins and outs of SBA loans.
  • You get help applying for SBA loans and access to a wealth advisor who can provide business tips.
  • There is no online application for an SBA loan through Truist as you must visit a branch or call the lender directly.
Editor's Rating: 8.4/10

Truist is our choice as the best lender for SBA loans because it has years of experience working with the SBA and offers a variety of funding options. Truist is the result of a merger between SunTrust Banks and BB&T and is the only bank lender on our list.

SBA loans don’t fall into the alternative loan bucket but are a popular and attractive borrowing option. Since the government backs most of the loan, lenders like Truist can accept lower down payments, offer longer repayment terms and charge competitive interest rates. As an SBA Preferred Lender, Truist has demonstrated its commitment to providing efficient funding.

When you work with Truist, you get access to an advisor who can determine which SBA loan is right for you.

SBA loans are popular for their low interest rates and long terms, but that doesn’t mean they are easy to navigate. You need a lender who can walk you through the process and that’s where Truist comes in. With Truist, you get an experienced lender who knows what it takes to process your loan quickly, which is why it’s our best pick for SBA loans.

Rates and Terms


Accessing capital is an important part of running a small business, but it isn’t free. Banks and alternative lenders charge you interest and fees for the privilege of borrowing. These are some of the funding costs that you will likely encounter:

  • Interest rate: This is the cost to access a lender’s capital, charged as a percentage of the loan principal. The interest rate depends on several factors, including your personal and business credit score, time in business, sales and loan size. Pay close attention to the annual percentage rate. This number allows you to compare borrowing costs between different lenders.
  • Loan application fee: Some lenders charge a fee to apply for a loan. This fee doesn’t guarantee you’ll be approved. We prefer lenders that don’t charge fees simply for applying.
  • Origination fee: This fee covers the costs of processing the loan. The origination fee is assessed after you agree to the financing. It is charged as a percentage of the loan or as a flat fee,
  • Monthly and annual maintenance: Some lenders charge fees to administer your loan. This is common if you maintain a business line of credit with a lender. We prefer lenders that don’t charge fees for longer-term loans.
  • Late payment fee: Most lenders will assess a fee for past-due payments if you are late on your loan payments. This will be spelled out in your loan contract.
  • Prepayment penalties: Some lenders charge a fee if you finish paying back your loan before the term ends.
FYIDid you know

The fees you’ll pay to borrow money vary by lender. That’s why it’s important to shop around so that you can make an accurate comparison of small business loans.


The term refers to the repayment period of the loan. The loan term can range from several months for a short-term loan to 30 years for real estate financing. Many small business term loans fall within the 1-5 year range. Payments usually are made weekly or monthly, depending on your loan contract. Additional conditions for financing can include putting up collateral or making a personal guarantee.

Types of Business Loans to Consider

Small business funding comes in many different forms. From SBA loans to lines of credit, small business owners can access cash in several ways.

SBA Loans

The SBA provides startups and small business owners access to capital through its lending program. The SBA backs up to 85% of these loans, which enables banks to extend funding to borrowers they may not have lent money otherwise. Some of the lending programs even provide ongoing support for the entrepreneur. Expect to pay comparable interest rates to a bank’s on SBA loans:

  • Standard 7(a) loan: With the SBA 7(a) loan, small business owners are eligible to borrow up to $5 million. The interest rate on this loan ranges from the base rate plus 2.25% to base rate plus 4.75%, depending on the loan size and term. The turnaround time from application to funding tends to be five to 10 business days. There’s no collateral required for loans up to $25,000.
  • SBA Express loan: The SBA Express loan is similar to the 7(a) loan, but funding may come in as little as 36 hours. You can borrow up to $500,000 and use it as a revolving line of credit or a term loan.
  • 504 loan: This is a long-term, fixed-rate loan in which the SBA provides 40% of the funding, a bank covers 50% and the borrower is responsible for 10%. Business owners can use 504 loans to purchase or fix equipment or property to help the business grow.
TipBottom line

SBA loans are popular among small businesses for their low rates and flexible terms.

Traditional Bank Loans

Banks and credit unions offer small business loans. It may be easy to apply if you have a relationship with the bank, but that doesn’t guarantee you’ll get a loan. Banks and credit unions have gotten more stringent in approving borrowers. A bank loan tends to have a lower interest rate than you’d pay with an alternative lender, but only those with a strong credit profile need apply.

Business Lines of Credit

With a business line of credit, you draw money from the loan as needed. You pay interest only on the amount you use. Small business lines of credit range from $1,000 to $250,000, going even larger in some instances. They tend to have variable interest rates, which means your interest payment amounts will fluctuate with the market.

You don’t have to provide collateral with an unsecured line of credit, but the lender may require a personal guarantee. With a secured line of credit, you must offer something of value that the lender can seize if you can’t repay the loan. Common types of collateral include property and business equipment.


Ideal for small business owners starting out or in need of a small amount of cash, microloans range from $500 to $500,000. Typically, they feature short terms and are offered by nonprofits. Many microlenders aim to help small business owners from underserved groups, such as women, minorities and veterans. The SBA is a big player in the microloans market, providing the funding to nonprofits that it designates as intermediary lenders.

Business Credit Cards

You can use a business credit card to make purchases while paying annual interest and fees, but this can get expensive if you carry a balance. Lenders look at your personal and business credit scores when determining your creditworthiness. A higher credit score generally translates into a lower interest rate.

Alternative Loans

Only some small business owners are eligible for a traditional bank or SBA loan, which is where alternative lenders come in. These are nonbank lenders that provide an array of loans. Alternative lenders typically are more flexible than banks, with faster application processes and funding turnarounds. They may cost you more in fees and interest, but it means you get your funding more quickly and easily. Here’s a look at three popular alternative loan types for small business owners:

  • MCA: A lender can offer you an MCA in exchange for a portion of your future credit card sales. You get access to cash quickly, sometimes within one day and then pay it back as a percentage of your daily credit card sales.
  • Equipment financing: This is a loan you take out to pay for business equipment. The collateral, in this case, is the equipment being financed. Most business owners can get approved for this, given the collateral component.
  • Invoice financing: Similar to an MCA, invoice financing gives you an advance on your clients’ unpaid invoices. It’s often referred to as accounts receivable financing. With this type of funding, the invoicing company advances you up to 85% of the value of your unpaid invoices. You receive the final 15%, minus the financing company’s fees, when your customers pay their invoices.
TipBottom line

Before you start shopping for a small business loan, think about what you need the funds for. That will help you determine the length (term) of the loan you need. You don’t want to be stuck paying off the loan long after the item you borrowed it for has lost its value.

What to Look for in a Business Loan or Financing Option

When you’re researching your financing options, you have several factors to consider that will help you narrow down your selection.

Loan Process

When small business owners need cash, they often need it quickly. The last thing you want to do is get stuck with a lender that requires reams of paperwork or takes too much time getting the funding into your bank account. With many alternative lenders, it takes minutes to apply for a loan and some offer same-day funding once you’re approved.


The term refers to the loan repayment period and the schedule for when you need to make payments. You may have six months to pay off a short-term loan, for example, or five years for a long-term loan.


Qualifications vary by lender but, in general, they look at your credit score, the financial health of the business and how long you’ve been in operation. Some lenders work only with borrowers who have a very good credit score while others are open to higher-risk borrowers. You should understand a specific lender’s qualifications and know that you’re eligible before you apply for financing from that lender.


Depending on the loan, you may need to offer up personal or business collateral, such as paper assets like stocks or corporate bonds or property, such as buildings, equipment or vehicles. If you default on the loan, the lender can come after that collateral. It’s important to understand the lender’s collateral requirements and the inherent risk before agreeing to the terms.


The interest isn’t the only fee you’ll pay back to the business lender. Lenders can charge various fees that impact the cost of the loan, such as application fees, origination fees, late-payment fees, prepayment penalties and monthly and annual maintenance fees.

Time to Deposit

This is the time it takes to get money in your bank account once you are approved for the loan. Before you choose a lender, you should obtain an estimate for time to deposit. Some alternative lenders can get the funding into your bank account within several business days.

Special Documentation

Some lenders require you to provide documentation before they will move forward with your application. These include your business financial statements, such as a balance sheet, income or profit and loss statement and your statement of shareholder equity.

Lenders may require three months of your checking account statements. You’ll also need to provide your income taxes for the last three years, paperwork pertaining to any businesses you have a financial stake in and your business license or certification. If you’re renting office space or equipment as part of your operations, you’ll want to have those leases easily accessible as well. Knowing ahead of time what paperwork your chosen lender requires ― ideally gathering and preparing it before you start the application ― will ensure a smooth and quick process.

Did You Know?Did you know

Most small business loans require you to provide a personal guarantee. This means that, if your business defaults on the loan, the lender can come after your personal assets.

For more information about business loan terminology, check out our glossary of business terms.

How to Qualify for the Right Loan for Your Business

Whether you work with a bank or an alternative lender, the funding provider wants to ensure that you will repay them. That is why you must provide financial documentation and information about your business before they will approve your loan. The lender considers how long your company has been in business, your business credit score and your annual sales. Lenders also look at your personal credit score when issuing capital.

If you have a strong credit profile and your business is growing, you will find it easier to get a bank or SBA loan at favorable rates. If your credit has taken a hit, you don’t have strong revenue growth or your business is in the early startup phase, then an alternative lender may be a better option for you than a bank. That’s why it’s important to understand the type of financing you need before you begin applying for a loan.

What documentation and financial statements do you need to prepare for a loan application?

The paperwork required for small business financing varies from one lender to the next. But there is some documentation that most lenders require:

  • Bank statements: Lenders want to see the last six months of your bank statements.
  • Tax returns: Some lenders require copies of your tax returns going back several years.
  • Business plan: Many lenders will want to see your business plan for achieving profitable growth.

The number of documents required varies widely, so it’s a good idea to ask your loan specialist about it upfront. That is especially true if you’re looking for quick funding. The lender can tell you exactly what they require in your situation. The more prepared you are with documentation, the quicker the process will go and the sooner the money will land in your bank account.

FYIDid you know

Small business loans are often necessary to keep cash flowing and operations growing. Depending on your credit profile, it can be reasonably cheap to borrow money or extremely expensive. You need to weigh the benefits of borrowing against the cost to determine what will work for you.

Frequently Asked Questions

The easiest business loan to secure is one that has minimal requirements in terms of your annual revenue, time in business and credit score. This makes it possible for startups to meet a lender’s qualifications. Straightforward applications can speed up the process.

Some lenders require collateral, while others protect their investment by requiring personal guarantees. It is rare to find a small business loan that doesn’t require some level of insurance for the lender. So, yes, startup loans usually require personal guarantees, especially if the loan is unsecured. This is a lender’s way of making sure it gets your debt back, even if it’s not directly through your business.

It is common for a lender to check your personal credit, especially if you are a new business owner and don’t yet have a business credit score for it to check. When you’re starting a company, the business doesn’t have a financial history, so a lender will check your personal credit score to determine if you qualify.

It depends on the lender. For some, a credit score of 550 is sufficient while others require a score of at least 600. Remember that the lower your credit score is, the higher your interest rate will be. According to credit rating agency Experian, a credit score of 700 or above is considered good while a score of 800 or higher is excellent. The average credit score is between 600 and 750.

It can be hard to get a loan or financing with bad credit, so if this is your situation, look into lenders that consider more than your credit score. Typically, banks won’t consider you if your score is under 680. That doesn’t mean you can’t get a business loan if you have bad credit, though. There’s a whole industry of alternative lenders waiting to serve you.

Small business owners with bad credit can get loans with terms of three years or less from alternative lenders, but the interest on these loans will be higher for borrowers with a poor credit score. A hard money loan is another option if you’re willing to put up collateral. Instead of judging you on your credit score, these lenders require an asset ― usually real estate ― to back the loan.

If you’re looking for an SBA loan, a good place to start is the SBA’s Lender Match tool. It’s a free online resource that hooks up business owners with SBA-approved lenders. To use it, you answer a few questions about your business and within two days, you’ll receive an email with contact information for the lenders willing to work with you. After you compare rates, you can apply with whichever lender you choose. This tool is not for SBA disaster relief loans.

If you don’t want to wait the two days for the SBA to match you with compatible lenders, you can do your own internet search for SBA-approved lenders and apply directly through their websites.

A business installment loan is a common method of financing an asset, such as property or expensive business equipment. Rather than paying for the whole purchase upfront, you pay for your purchased asset in installments over a certain period of time. The amount of the loan and the number of payments you must make are fixed ― you don’t have access to an ongoing line of credit or credit card.

Installment loans can have many purposes, such as purchasing equipment, funding a startup or paying for property. If you are looking for an installment loan to fund a startup, you’ll need good credit, collateral, a business plan and potentially additional guarantees, depending on your credit standing and business prospects. Installment loans tend to have lower interest rates than credit cards, but you risk losing your collateral if you default on the loan. That’s not true of a credit card.

The SBA still offers Economic Injury Disaster Loans (EIDLs) for businesses located in areas affected by fires, hurricanes, tornadoes, floods or other disasters. These low-interest-rate loans are issued directly through the SBA. Businesses owners can receive up to $2 million to help meet obligations and repair or replace equipment and buildings.

Many business owners don’t look for a loan until they need the money. They may have identified an opportunity to expand or noticed a shortage in cash flow. Then, they scramble to get a loan, focusing more on the time it will take to get cash in the bank than the terms.

The better strategy is to line up funding before you need it. That will give you the time to shop for a loan that has a low interest rate, not many fees and favorable terms. Having cash at the ready will better position your business for the unexpected.

What to Expect in 2024

Credit availability and higher interest rates are potential issues for business owners in 2024. Since March 2022, the U.S. Federal Reserve has embarked on a program of tighter monetary policy. In response to rising inflation, policymakers have hiked interest rates to the highest level in over 15 years. The WSJ Prime Rate, an index of prime rates from 30 major banks, sits at 8.5 percent, versus 7.5 percent a year ago.

Over the last few months, inflation readings have fallen from previously elevated levels. The Federal Reserve recently paused its rate hike program, and analysts widely believe that current rates are at or near a peak. Chairman Jay Powell has indicated that the Fed could cut interest rates up to three times in 2024. However, the central bank has not ruled out further interest rate increases in the future if inflation re-accelerates.

Although the path forward for interest rates remains uncertain, it remains possible to save money on business loans. Business owners who use online and alternative lenders in 2024 may be able to access lower interest rates. Technological advances may improve the lending process, with artificial intelligence and machine learning reducing loan approval wait times. Credit scores still matter, but lenders are increasingly scrutinizing other aspects of business owners’ finances to ascertain their creditworthiness. These changes could make it easier and faster for some businesses to receive financing.

To account for rising inflation, the SBA increased size standards in 2023 to expand the definition of what is considered a small business. This means that more businesses are eligible to apply for SBA loans and federal contracts. More information is available on the SBA table of size standards.

Mike Berner
Mike Berner
Senior Analyst & Expert on Business Operations
Mike Berner is a staff writer at and Business News Daily, where he specializes in finance topics including business loans, accounting, and credit card processing. Mike has a deep background in the financial world, having written hundreds of articles and blog posts on financial markets, business and investing. He holds a B.A. in economics and a B.B.A. in finance, both from the University of Massachusetts, Amherst. Prior to his writing career, he performed financial analysis and research as an economic analyst.
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