A small business loan can provide you with capital for starting, expanding or keeping your business up and running. But with so many types of businesses, there's no one-size-fits-all solution.
CNBC Select reviewed more than 30 lenders on credit score requirements, minimum and maximum loan amounts, terms, funding speed and other factors. For more on how we made our selections, read our methodology.
- Fast Funding: Get a decision as fast as 24 hours.
- Flexible Loans: Term, working capital, or real estate.
- Easy Apply: A simple, secure online application.
- 12 months in business
- $100,000 in Annual Revenue
- FICO 575
Terms apply.
Best for bad credit: Credibly
Who's this for? Borrowers with poor credit should check out Credibly, which only requires a 500 FICO Score for approval.
Standout benefits: Prequalification only takes a few minutes and borrowers can receive funding in less than 24 hours.
Offers many types of loans including long-term loans, working capital loans, business line of credit and merchant cash advance
- Approval within four hours
- Low minimum credit score
- Loan amounts of up to $600,000
- Funds deposited as soon as the same business day
- Considers overall business health for approval
- Requires average monthly revenue of at least $15,000
Best for larger loans: Fora Financial
Who's this for? Fora Financial approved business loans for as much as $1.5 million, more than any other lender on this list.
Standout benefits: After paying back at least 60% of the principal, borrowers can increase their loan amounts.
Offers many types of loans including small business loans and revenue advance
- Higher loan limits than many competitors
- Low minimum credit score
- Next-day funding available
- Prepayment discount
- Borrowers can increase their loan amount after repaying at least 60%
- Charges a factor rate rather than a traditional APR
- Daily/weekly repayment schedule
- 3% origination fee
Best for microloans: Kiva
Who's this for? If you're just dipping your toe in entrepreneurship, Kiva offers no-interest, no-fee microloans ranging from $1,000 to $15,000. Its network of individual and business partners get first crack at funding, then applicants can crowdfund with friends, family and followers.
Standout benefits: There's no credit score minimum or collateral requirement.
Loans are geared toward borrowers, especially business owners, who are unbanked and have trouble qualifying for financial products.
- 0% interest and no fees
- No minimum time in business or annual revenue required
- No credit score requirement
- Can reach community of 1.6 million Kiva lenders
- Low lending limit
- Personal guarantee required
- Borrowers need to crowdfund from their network
Best for same-day funding: OnDeck
Who's this for? OnDeck offers same-day funding for term loans up to $100,000.
Standout benefits: Applicants need only be in business for one year, making it accessible to newer ventures.
Flexible credit and eligibility requirements make OnDeck attractive to businesses that may struggle to qualify elsewhere. But its accessibility and fast funding is countered by higher APRs, frequent (daily or weekly) repayment schedules and the need for a personal guarantee.
- Low minimum credit score requirement
- Can build business credit
- Same-day funding available for loans of up to $100,000
- APRs and origination fees can be high
- Daily/weekly repayment terms can impact daily cash flow
- Doesn't lend in Nevada, North Dakota or South Dakota
Best for multiple loan types: Biz2Credit
Who's this for? Biz2Credit offers a few different types of financing options for your business: term loans, revenue-based financing and commercial real estate loans.
Standout benefits: A variety of fixed-payment schedules are available, including daily, weekly and bi-monthly.
We like Biz2Credit's easy application process and high loan caps. And it charges simple, not compound interest, which can mean big savings for term loans. But the steep approval requirements make it a bad fit for startups with modest sales or in business for less than six months. In addition, Biz2Credit paid $33 million in 2024 after the FTC alleged it misled businesses about processing times for Covid-era Paycheck Protection Program (PPP) loans.
- Up to $6 million available for revenue-based financing
- Funds available as little as 24 hours
- Discount available if you link your business checking account
- Offers commercial real estate loans
- Need 12 months in business and $250,000 in annual sales
- $25,000 lending minimum may be too high
- Financing requires collateral or a personal guaranty
- Fee structure not publicly listed
Best for Square users: Square
Who's this for? Business owners already using Square can repay their loan by deducting money from daily sales.
Standout benefits: Square approves financing for as little as $100.
We like that there's no credit check or personal guarantee requirement, as well as how quickly Square can deliver funding. But Square Loans are invitation-only and the upfront fee can higher than the interest on a traditional business loan. Also, if your daily sales don't cover the minimum payment, Square may debit the remaining balance from your linked bank account. That can be burdensome for businesses with small margins.
- Charges a flat upfront fee rather than interest
- No credit check or personal guarantee requirement
- Same-day funding available if you have a Square Checking account
- Must be invited to apply
- Factor rate can be higher than APY on traditional business loan
- if daily sales don’t cover minimum due, the remainder may be debited from linked bank account
Types of small business loans
There are a variety of loan options that suit different business needs. Here's an overview of 10 types of small business loans:
Term loans
A lump sum repaid over a set period, term loans are the most common type of small business loan. Monthly payments are typically fixed and include a portion of the principal, plus interest. Term loans can be used for a variety of needs, including equipment and everyday expenses.
Revenue-based financing
Unlike a term loan, revenue-based financing doesn't have a set monthly payment. After an initial cash infusion from a financing company or an equity firm, your business turns over a predetermined percentage of monthly revenue until the investment is fully repaid.
SBA loans
Small Business Administration (SBA) financing is appealing to business owners seeking a low-cost, government-backed loan. However, SBA loans are notorious for their lengthy application process — it can take up to three months to receive funding.
Business lines of credit
Similar to a credit card, business lines of credit provide borrowers with a revolving credit limit that they can access through a checking account. You can spend up to the maximum credit limit, repay it, then withdraw more money. Since you only incur interest on the amount you withdraw, it's a popular option if you're not sure of the exact amount you'll need. Many business lines of credit are unsecured, which means you don't need any collateral.
Equipment loans
An equipment loan is designed to help pay for machinery, vehicles or equipment that retains value, such as computers or furniture. In most cases, the equipment you purchase will be used as collateral if you can't repay the loan.
Invoice factoring and invoice financing
Business owners who struggle to receive on-time payments may want to choose invoice factoring or invoice financing (aka accounts receivable financing). Through invoice factoring, you can sell unpaid invoices to a lender and receive a percentage of the invoice value upfront. With invoice financing, you can use unpaid invoices as collateral to get an advance on the amount you're owed. The main difference between the two is that factoring gives the company buying your invoices control over collecting payments, while financing still requires you to collect payments so you can repay the amount borrowed.
Commercial real estate loans
Commercial real estate loans (aka commercial mortgages) can help you finance new or existing property, like an office, warehouse or retail space. These loans act like term loans and may allow you to purchase a new commercial property, expand a location or refinance an existing loan.
Microloans
Microloans are small loans that can provide you with $50,000 or less in funding. Since the loan amounts are relatively low, these loans can be a good option for new businesses or those that don't need a lot of cash. Many microloans are offered through nonprofits or the government, like the SBA, though you may need to put up collateral (like business equipment, real estate or personal assets) to qualify for these loans.
Merchant cash advances
Like traditional cash advances, merchant cash advances come at a high cost. This type of cash advance requires you to borrow against your future sales. In exchange for a lump sum of cash, you'll repay it with either a portion of your daily credit card sales or through weekly transfers from your bank account. While you can often quickly obtain a merchant cash advance, the high interest rates make this type of loan a big risk. Unlike invoice financing/factoring, merchant cash advances use credit card sales as collateral, instead of unpaid invoices.
Franchise loans
Becoming a franchisee can help you achieve your goal of business ownership quicker and easier than starting from the ground up, though you'll still need capital. Franchise loans can provide you with the money to pay the upfront fee for opening a franchise, so you can get up and running. While you're the one taking out the loan through a lender, some franchisors may offer funding to new franchisees.
What do I need to apply for a small business loan?
When you go to apply for a small business loan, you'll need to have both personal and business information handy. Expect to enter some or all of the following information:
- Personal information (like your name and address)
- Tax identification number (which is either your employer identification number, EIN, or Social Security number, SSN, and sometimes both)
- Business name
- Business address and phone number
- Industry type and company structure
- Years in business
- Number of employees
- Annual business revenue
- Estimated monthly spend
During the application process, you may need to submit documentation, like your business plan, financial statements, bank statements and tax returns. There's also a good chance that your personal credit score will be pulled, so a lender can gauge your creditworthiness.
How to get a business loan
To get a business loan, you'll want to consider how much money you actually need to borrow and really think about why you need the money in the first place and how it will be used. Many business owners use funding to upgrade equipment, hire new employees and expand locations, among other uses.
You'll then want to narrow down some lenders that fit your needs and see if you can get pre-qualified for funding. This lets you see what your interest rate may be so you can shop around for the best rate and best terms.
After you've settled on a lender, submit a formal application by providing the information listed above and filling out the lender's application.
If you're approved, you'll receive your funding but the timeline can depend on the lender's timeline for disbursement. Some lenders may disburse funds within a few business days but don't be surprised if others take weeks.
How to choose a business loan and how to compare lenders
Be sure to carefully vet your lender options before committing to an offer. In particular, consider the following factors when choosing a small business loan:
- Funding amount and funding purpose: Obviously, if you need a larger loan, you'll only consider lenders that offer that much funding, but also consider why you're getting a loan in the first place because some loans are meant for specific expenses. For instance, if you're purchasing equipment, you can get an equipment financing loan. Invoice financing lets you borrow money to pay invoices you owe while you wait for customers to pay what they owe. It can be beneficial to choose a loan that's designed for your specific purpose rather than just getting a standard small business loan.
- Lender requirements: Make sure you meet the lender's requirements so you don't waste your time applying for a loan you aren't eligible for. Lenders typically have a minimum credit score, a minimum annual revenue requirement and a time in business requirement, among some other criteria.
- APR and terms: As with any loan, consider the APR you're getting, as well as other loan terms (like your time horizon for paying it off). You want a low APR so you save on interest.
Pros and cons of a small business loan
Before applying for a business loan, consider these pros and cons to help you be sure that a loan is right for you.
- Typically fast funding upfront
- Funding is disbursed as a lump sum so you can use the money any time you need it and any way you need it
- You don't dilute your equity by getting a business loan
- Repayments help you build your credit score
- You may be asked to provide collateral to secure the loan
- Some lenders may take longer to disburse funding
- Many loans are not built for brand new businesses with no revenue since you'll often need to earn a certain amount in annual revenue and be active for a certain number of months/years to qualify
- Loans may have application fees and origination fees, among other types of fees
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
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1.00% APY on balances of $0.01—$24,999.99 and $250,000.01; up to 1.35% APY on balances of $25,000-$250,000
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None using the base version; Found Plus* subscribers earn 1.50% APY on balances up to $20K.
FAQs
What credit score is required for a small business loan?
You typically need at least a fair/average credit score (580 to 669) to qualify for a small business loan, but it will vary depending on the lenders.
If your personal credit score is good/very good (670 to 799) or excellent (800 to 850), you’ll have even better odds. As with most financial products, the higher your credit score, the better interest rates and fees you’ll receive.
Lenders focus on your personal credit score when setting minimum credit score requirements, but they may also check your business credit score. Lenders don't state any requirements for business credit scores.
Am I personally liable for a small business loan?
In most cases, you, as the business owner, are personally liable for a business loan. When you take out a business loan, you’ll typically need to put up collateral, which can range from business property and vehicles to personal assets like your own car or home. In the unfortunate event that your business goes bankrupt and you can't repay your loan, you may also lose personal assets.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every small business loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Our methodology
To determine which lenders are the best for small business loans, CNBC Select analyzed more than 30 online and brick-and-mortar lenders.
We narrowed the field by only considering lenders offering term loans, equipment loans, commercial real estate loans, microloans, franchise loans and revenue-based financing.
We compared each small business loan on a range of features, including minimum and maximum loan amounts, term lengths, credit score and revenue requirements, the application process, availability of customer support, its Better Business Bureau rating and customer reviews.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
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