Small business loans are essential in the business world because they enable owners to buy new equipment or supplies, pay their employees, or manage their cash flow while waiting for customers or clients to pay. A small business loan gives entrepreneurs and business owners a lump sum of cash or a line of credit that they can use to keep their businesses running and growing for years to come.
Surprisingly, online lenders, not traditional banks, currently provide the best loans for small businesses. In most cases, online lenders can give the most straightforward application and funding processes, as well as the best loan terms and fees.
We examined over 20 of the best small business loans and lenders to find options that provide fast funding, transparent pricing, and flexibility most small business owners require. Before applying for a small business loan, look at our six best business loans to determine which lender is best for your goals and funding requirements.
BEST IN CLASS
Kabbage
We chose Kabbage as the best overall option because it offers quick funding and a variety of payment options. We also selected Kabbage because it provides a comprehensive set of tools for small businesses, such as a business checking account and a mobile app.
Pros
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- Clear qualification requirements
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- There are no application fees.
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- There are several small business loan options available.
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- A mobile app is available.
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- Business checking is available.
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Cons
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- You must have been in business for a year.
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- You must earn at least $4,200 per month or $50,000 per year.
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Kabbage is a technology company that was founded in 2008. Its goal is to assist businesses of all sizes in obtaining cash flow. Even though many online companies offer small business loans, we believe Kabbage stands out because it has so many small business loan options and so many extra features and benefits.
Kabbage offers both unsecured and secured options for small business loans and lines of credit. Loans for trucking, pawnshops, retail, and other industries are also available. Kabbage is proud of how simple it is to apply online and how quickly money is disbursed to those approved.
Kabbage offers various loan amounts based on the type of loan requested. Kabbage also offers business lines of credit up to $150,000 and online loans ranging from $500 to $150,000. Other types of loans may have higher limits.
Kabbage Funding also allows you to repay your loan over six to twelve months, based on your needs.
There are no hidden loan fees or penalties for paying off a loan early with Kabbage. You will have to pay a monthly fee, but they will inform you immediately.
BEST REVOLVING CREDIT LINE
Fundbox
Fundbox specializes in providing business owners with lines of credit. You can get prequalified online without a hard inquiry on your credit report. They are well-versed in this type of small business funding because they specialize in business lines of credit. They make decisions in minutes and distribute funds the following business day.
Pros
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- Prequalification can be obtained online without a hard inquiry on your credit report.
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- Receive a response in a few minutes.
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- Unlike small business loans that provide a lump sum, you can borrow what you need.
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Cons
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- A line of credit can only be used for up to $150,000.
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Fundbox was chosen because it has the best revolving line of credit, which allows you to qualify for a specific amount and only borrow what you need. Fundbox was founded in 2013, and technology makes its B2B credit lines possible. The company’s goal is to assist small businesses in becoming extremely successful.
Fundbox only provides credit lines of up to $150,000, but you can get pre-approved online without completing a full loan application. You can get a credit decision in minutes after applying, and you don’t have to take the loan money if you don’t want to.
Fundbox focuses on credit lines, allowing you to borrow only what you need. You can transfer funds from your line of credit to your business checking account starting the next business day. You can save money with this provider if you pay off your balances early and on time without being penalized.
Fundbox lets you see your line of credit’s fees upfront, and they’ll automatically deduct the amount due from your bank account, so you don’t have to think about it. You can repay your credit line over 12 or 24 weeks.
BEST FOR MICROLOANS
Kiva
Kiva is a good option for small business owners who only need a small loan. The interest rate on their microloans is 0%, and you can borrow up to $15,000.
Pros
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- You can borrow money for free.
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- Get the chance to sell your product to the growing community of 1.6 million Kiva lenders.
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- You have 36 months to repay your loan.
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Cons
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- You can only borrow up to $15,000.
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- Your loan may be funded in 30 days or more.
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This lender was chosen as the best option for microloans because you can borrow money for free and repay it over three years.
Kiva was founded in 2005 to assist people in underserved communities in obtaining the small business loans they require to realize their dreams. So far, over $1.74 billion in loans have been made by 2.1 million Kiva lenders to over 4.3 million borrowers in 77 countries worldwide.
Kiva is unique in that it is not a bank but a platform where people can lend money to one another. Kiva loans are designed to assist struggling entrepreneurs, so people who lend money through the platform can help people worldwide.
You can only borrow up to $15,000 with Kiva’s loan product. Online applications can be completed in 20 to 30 minutes. You’ll be able to list your project on their marketplace within 30 days, and you’ll have 36 months to repay your loan.
Kiva also has simple eligibility requirements, such as residing in the United States and being at least 18 years old. To qualify for a Kiva loan, you must also agree to use the funds solely for your business.
BEST FOR SBA LOANS
Fundera
Fundera was chosen as the best Small Business Administration (SBA) loan provider because it offers the most SBA loan options, including loans through the popular SBA 7(a) loan program. You can apply for an SBA loan on Fundera directly, and your loan will be funded by a number of the best SBA lenders.
Pros
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- Fundera provides a wide range of business loans and lines of credit, including SBA loans.
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- Compare loans from various lenders in one place.
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- Check your eligibility without putting a hard inquiry on your credit report.
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Cons
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- Fundera is a small business marketplace. Because it is not a direct lender, the company will not fund your loan itself.
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- A credit score of at least 550 is required.
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- For some SBA loans and loan amounts, collateral is required.
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Fundera is an excellent option for people looking for an SBA loan because it allows you to fill out one application and compare multiple SBA loan options in one place. Fundera began operations in 2013. It is a loan marketplace rather than a direct lender. This means that the company assists small business owners in locating the best loans and lines of credit for small businesses available on the market, but it does not lend money.
Fundera is a marketplace that can provide almost any business loan or line of credit currently available. This includes Small Business Administration loans, which typically have flexible repayment terms and low-interest rates.
There are various loan amounts and payment plans available, but you can obtain an SBA loan for up to $5.5 million.
You may also be able to repay your loan over 25 years, but the money may take up to two weeks to arrive. Remember that collateral may be required for SBA loans, particularly for more significant loan amounts.
BEST FOR SAME-DAY FUNDING
OnDeck
We chose OnDeck because they provide small business loans that can be paid back as soon as the following business day. This can be critical for business owners who need cash quickly to pay for essential equipment or to cover business expenses.
Pros
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- You can receive funds as soon as the next business day.
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- You can borrow up to $250,000 with a small business loan and up to $100,000 with a line of credit.
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- OnDeck is open and honest about loan terms and eligibility requirements.
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Cons
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- You need to have a credit score of a minimum of 600.
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- Applicants must be in at least one year in business and earn at least $100,000 per year.
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OnDeck has become one of the most well-known capital providers for small businesses since its inception in 2006. OnDeck was chosen as the best option for same-day funding because it is simple to apply online, and your small business loan is approved and paid out quickly.
OnDeck makes it simple to obtain a line of credit ranging from $6,000 to $100,000 or a small business loan ranging from $5,000 to $250,000. Small business loans can be repaid over up to 24 months, with no penalties for paying them off early.
You can repay one of OnDeck’s credit lines over a year, and you can borrow only what you need. Small business owners in need of capital can use either option and with both, you can apply and receive a decision the same day.
OnDeck provides a list of basic requirements for obtaining a business loan. A personal credit score of a minimum 600 is required for a long-term loan. To qualify, you must also have been in business for at least two years and earn at least $250,000 per year.
BEST LENDER COMPARISON WEBSITE
Lendio
Lendio allows you to compare options from over 75 lenders in one place, which is more than other marketplace sites. You can also receive your loan funds in 24 hours, which can be highly beneficial for business owners who require cash quickly.
Pros
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- Compare loan offers from over 75 lenders.
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- Funding is available in less than 24 hours.
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- Small business loans, SBA loans, and business credit lines are available.
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Cons
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- Lendio does not make direct loans.
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- Different lenders have different qualifications for who can apply.
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Lendio is a loan marketplace, so it will not lend you money directly. However, they stand out in this category because you can compare loan offers from over 75 small business lenders. Allowing lenders to compete for your business is the best way to ensure you get the best rate and terms on a small business loan.
Lendio was founded in 2011, but it has grown significantly since then. They say they have funded over 300,000 small business loans totaling more than $12 billion so far, and they have no plans to stop anytime soon.
Depending on your needs, Lendio allows you to borrow between $25,000 and $500,000 for your small business. You could get an interest rate as low as 4.5% and repay your loan over a one to five-year period.
The application process with Lendio takes only 15 minutes, and you can get a decision the same business day. As a result, it is an excellent place to shop for a loan quickly.
Featured Image: Unsplash © bruce mars
