10 Best Small Business Loans of 2017
Get the Best Small Business Loan. We review and compare the Top Small Business Loan services for your growing business.
Small business loans consist of funds paid out to small businesses, to be repaid with interest over a set period of time. Taking out a small business loan can be a very convenient way to obtain start-up funds. It can also help established businesses manage day-to-day expenses or receive an influx of capital to meet short-term obligations.
Some of the small business loan options available are guaranteed by the government, via the Small Business Administration (SBA), whereas others are private. Other financing options include microlenders—generally small non-profit organizations geared to helping disadvantaged communities—, and alternative lenders, like the online lending community. Regardless of the type of loan, lenders will invariably look at time in business, business plan, personal credit score, gross annual revenues, net annual profits, and what collateral is available to back the loan.
Debt financing for a business has the advantage that the lending institution has no say over how the borrower runs their company, the interest is deductible as a business expense, and since the monthly payments are a known amount, they’re easy to factor into forecasting models. However, taking out a loan does add a monthly debt payment to the company’s expenses, and depending on the collateral provided, can put your home or business at risk if you default.
Borrowers choosing between lenders should evaluate and compare the purpose of the loan, its size, interest and APR rates, terms and costs, including prepayment penalties and origination fees. Every single lender is going to look very carefully at your cash flow, your debt ratio and the rest of your financials. Companies with a sound fiscal situation are going to have higher chances of obtaining favorable rates, no matter the type of loan or lending institution.
Top 10 Companies
- Our #1 Choice: A+ BBB Rating - 9.7 of 10 on TrustPilot
- Largest Small Business Online Lender - 50k+ Customers
- Loans up to $500k, and Lines of Credit up to $100k
- Decision in minutes - no obligation
- Funding in as fast as 24 hours
- Must have 100k in revenue, minimum 12 mo in business, 500+ Fico
- Revolving line of credit up to $150,000!
- Apply online and get a decision right away
- No hidden fees, pay only when you access your line for the amount you take
- Monthly payments with no origination fees or prepayment penalties
- Friendly support representatives
- Grow your business with Fundbox Credit
- 9.7 of 10 on Trustpilot – trusted by industry leaders and business owners
- No credit pull or minimum revenue requirement
- Approval in hours, next business day funding, lines up to $100K
- One transparent weekly fee with no early repayment penalties
- No paperwork required, simple application process that’s integrated with accounting software
- Business loans & lines of credit for everything you need: cash flow, debt, new equipment, etc.
- Great choice for Small Business Loans A+ BBB Accredited Company
- Fill out a short form (less than 3 minutes) and save money by comparing up to 4 free offers
- When banks compete, you win!
- Must have 100k in revenue, 12 mo in business
- Established Company Loans: $10k to $500k - No Collateral or Financials!
- Fast approval with 48-hour funding
- A+ BBB Accredited
- Simple & paperless loan application
- Multiple funding options for different types of business
- Access to a list of small business lenders, brokers, and private investors
- RapidAdvance offers very low rates to qualified businesses
- Over $1 Billion in Loans to Small Businesses
- Rated A+ by the BBB
- Business-financing ranging from $15,000 to $500,000
- Get approval as quick as 24 hours
- Best suited for well-qualified applicants: 600+ Fico, 10k/mo in Revenue, 1+ year in business
- Digital media businesses can finance receivables in as little as 48 hours
- Directly integrated with leading account software
- $1.5 billion in loans originated
- 3,000 plus advertisers financed
- Quick and easy online application
- Simple eligibility requirements, even new businesses can apply
- Starting credit line up to $100,000
- Flexible options for Women's Loans, Traditional Business Loans & More.
- Secure online request form
- Loans of up to $350,000
- Competitive interest rates
- Qualification: 10K/mo revenue & 3+ mo in business
- Bank-level security
- Guaranteed low rates
- Apply to multiple lenders and get offers at once
- Eligibility Tracker
- Completely free service without hidden charges
- Marketplace with several known lenders
- Get unbiased advice Loan up to $5,000,000
- Qualify for a loan in minutes
- Fast No-Obligation Online Application
- A- BBB Accredited Company
- No income documents and collateral required
- No early payment fees
Best Small Business Loans: Summed Up
How We Compare Small Business Loans
Customer Questions & Answers
Do I need to have good credit to get a loan for my business?
Generally speaking, lending platforms will require a minimum personal credit score of 600, but most consider that on the low side and ask for a one upwards of 680. However, all is not lost if you have bad credit. Some lenders will have a more holistic approach, and take moren into account how long you’ve been in business and how much revenue you’re generating. Be aware, however, that no matter what, bad credit will result in higher interest rates or more in fees.
If my business is just starting, is a small business loan the best option for me? What other alternatives are there?
Though some companies offer loans specifically for startups, and there is an SBA-backed program specifically tailored to this purpose, most people initially fund their business themselves, or with help from family and friends. A similar source of funding is through angel investors, as mentioned in the second question. This consists of attracting investors to fund your company and giving them equity in return. Other than funding yourself or getting help from friends and family, the following are other options to pursue:
SBA Loan - This generally won’t happen unless you have good credit history and/or collateral you’re willing to put up
Trade equity or services - This means just that- you trade either equity or services in exchange for startup help, like legal and accounting support.
Incubator/Accelerator - Major universities, community organizations and even large companies can provide resources for startups, from seed money and office space to consulting and helping you get investors.
Venture-capital Investors - These professional investors, like Accel or First Round, put institutional money into startups that are typically expected to make big money and a proven business model.
Angel Investor groups - Angel investing can also be achieved through one of these groups, such as Gust or SV Angel, which join together high-net-worth individuals.
Crowdfunding - Since the JOBs act of 2012, which eased many of the regulations regarding the funding of small businesses, crowdfunding has been a growing industry. You put your proposal up on one of the many online platforms, and individuals pledge money to your campaign in exchange for rewards, pre-buying your product, or simply to donate. However, most websites won’t give you the money unless you reach your stated goal.
Do I need a guarantor?
Well, it depends. Banks are traditionally very conservative in their loan practices, and may require that you secure your loan with an outside investor. This means, however, that they’re putting their assets on the line for you, and if at some point you can’t make your debt payment, then your guarantor becomes liable. If a guarantor wants equity in your company instead of repayment, they’re then called an angel investor.
What type of loan is best for me?
This is a complicated question without a simple answer. It depends. The traditional thing to do would be to shop around amongst local and national banks, credit unions, etc, whether it be for an SBA loan or a private one. With the rise of the online lending market, the options available to you have expanded considerably, especially considering that banks are making less and less small loans —only one in five—, preferring to concentrate on higher amounts, due to their higher rate of return.
SBA loan: Though there are many types of loans that are guaranteed by the SBA, only apply for them if you have excellent personal credit, strong finances, and the time to wait out approval, as these loans generally take longer. Best for expansion and long-term investments.
Short or Long Term loan: Online lenders generally offer up to $500K, with repayment periods of between 6 months to ten years. Best for a large, one-time expense.
Business Line of Credit: This provides you with access to flexible cash, which you don’t make payments or get charged interest on until you actually access the funds. The credit line can range anywhere from $2,000-$500,000. This can be a lifeline to manage cash flow, handle any unexpected expenses and finance any short-term needs. Best for handling ongoing capital needs.
Invoice Factoring: This type of financing is best for companies with outstanding invoices and cash flow needs. This lets your business turn your invoices —from $500 to $500,000— into immediate cash, by selling them to a factoring company, and they get paid when they collect from your customers. Best for fixing a cash-flow issue.