Best Small Business Loans in May 2025

Compare top lenders to find the right funding for your business.

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Live Oak Bank: Best SBA preferred lender

Up to $5,000,000

10.50% to 14.00% 14% for loans $50,000 or less
13.5% for loans $50,001 to $250,000
12% for loans $250,001 to $350,000
10.5% for loans above $350,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.

12.50% to 15.50% 15.5% for loans $25,000 or less
14.5% for loans $25,001 to $50,000
13.5% for loans $50,001 to $250,000
12.5% for loans above $250,000
Some borrowers may qualify for lower rates. Based on the current prime rate of 7.50% + a rate maximum set by the SBA.

Up to 25 years

Pros
  • Offers SBA 7(a), SBA 504 and SBA Express loans
  • Both fixed and variable interest rates are capped by the SBA
  • Every borrower is assigned a dedicated business analyst who can help identify areas of growth for your business
Cons
  • Not transparent about eligibility criteria
  • Even with a preferred lender, SBA loans are slower to fund than other types of business loans
  • You’ll need to contact a loan officer to apply, but you can get started online

Why we picked it

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How to qualify

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iBusiness Funding: Best for financing large purchases

$25,000 to $500,000

7.49%

6 to 84 months

Pros
  • Lengthy terms give borrowers up to seven years to repay their debt
  • Lower rates than many alternative lenders
  • No application fees or prepayment penalties
Cons
  • Collateral, personal guarantee and/or blanket lien may be required
  • Must be in business for at least two years to qualify
  • May take a few days to fund

Why we picked it

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How to qualify

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Fundbox: Best for startup companies

Up to $150,000

4.66% to 8.99%  4.66% for 12-week terms
8.99% for 24-week terms

12 or 24 weeks

Pros
  • Low time in business and annual revenue requirements
  • No prepayment penalties
  • Relatively fast funding
Cons
  • May require a personal guarantee
  • Short repayment terms with weekly payments required
  • Low maximum borrowing amount compared to other lenders

Why we picked it

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How to qualify

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American Express Business Line of Credit: Best for borrowers with good credit

$2,000 to $250,000

3.00%  3% to 9% for 6-month terms
6% to 18% for 12-month terms
9% to 27% for 18-month terms
12% to 18% for 24-month terms
Each draw counts as a separate installment loan. Single-repayment loans will have different rates and terms.

6 to 24 months

Pros
  • Very affordable rates for borrowers with good or excellent credit
  • Low annual revenue requirement
  • No application or prepayment fees
Cons
  • Requires a personal guarantee
  • Only select customers qualify for lines of credit over $150,000
  • High late payment and insufficient fund fees

Why we picked it

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How to qualify

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Taycor Financial: Best for financing equipment

$500 to $5,000,000

7.99%

12 to 84 months

Pros
  • Offers financing to cover the full cost of purchasing equipment with no down payment required
  • No time in business requirement
  • Low credit score requirement
Cons
  • May require a personal guarantee
  • Charges a documentation fee
  • Stricter eligibility criteria for equipment refinancing

Why we picked it

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How to qualify

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Fora Financial: Best for covering short-term cash flow gaps

Up to $1,500,000

1.13 factor rate

Up to 18 months

Pros
  • Low credit score and time in business requirements
  • Prepayment discounts available
  • Relatively fast funding
Cons
  • High annual revenue requirement
  • Factor rate makes it difficult to compare loan costs with other lenders
  • High loan amounts and short repayment terms could lead to a dangerous debt cycle if borrowers aren’t prepared to repay their loan

Why we picked it

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How to qualify

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Credibly: Best for borrowers with bad credit

$25,000 to $25,000

1.11 factor rate

6 to 24 months

Pros
  • Lowest credit score requirement on this list
  • Low time in business requirement
  • Relatively fast funding
Cons
  • High annual revenue requirement
  • Requires daily or weekly payments
  • Factor rate makes it difficult to compare loan costs with other lenders

Why we picked it

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How to qualify

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OnDeck: Best for same-day funding

$5,000 to $250,000

31.30%  Minimum APR offered to at least 5% of customers (not the lowest rate offered)

Up to 24 months

Pros
  • Same-day funding available
  • Fair to low credit accepted
  • Can help build business credit
Cons
  • Requires daily or weekly payments
  • High interest rates
  • Funding not available in North Dakota

Why we picked it

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How to qualify

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Headway Capital: Best for covering ongoing expenses

Up to $100,000

Not disclosed

12 to 24 months

Pros
  • Relatively fast funding
  • No monthly or annual service fees
  • No prepayment penalties
Cons
  • Low maximum loan amounts compared to other lenders
  • 2% draw fee in most states
  • Not available in Arkansas, Connecticut, Montana, Michigan, North Dakota, Nevada, Rhode Island, South Dakota and Vermont

Why we picked it

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How to qualify

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Accion Opportunity Fund: Best for underserved entrepreneurs

$5,000 to $250,000

8.49%

12 to 60 months

Pros
  • Provides resources for women, people of color and low-income business owners
  • Offers business coaching and mentorship in both English and Spanish
  • No prepayment penalties
Cons
  • Blanket lien required for loans over $50,000
  • Not available in Montana, North Dakota, South Dakota, Tennessee, Vermont and District of Columbia

Why we picked it

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How to qualify

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altLINE: Best for financing unpaid invoices

$30,000 to $5,000,000

75% to 90%

0.75% to 3.50%

Pros
  • Provides funding by collecting outstanding customer invoices on your behalf
  • Works with startups and bad credit borrowers
  • Funding available within 24 to 48 hours
Cons
  • Charges origination and wire fees
  • Requires your customers to have good credit
  • Fees increase the longer an invoice is left unpaid

Why we picked it

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How to qualify

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Bank of America: Best for building business credit

Starting at $1,000

Not disclosed

12 months (with annual review)

Pros
  • Cash-secured line of credit can help establish and build business credit
  • Offers multiple financing options for small businesses
  • Rate discounts of 0.25% to 0.75% for Bank of America Preferred Rewards members
Cons
  • Credit limit is based on your security deposit
  • Doesn’t disclose minimum credit score
  • Annual fee of $150 (waived the first year)

Why we picked it

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How to qualify

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National Funding: Best for early payoff discounts

$5,000 to $500,000

1.11 factor rate

4 to 24 months

Pros
  • Discounts available for paying off your loan early
  • Relatively fast funding
  • Provides a loan specialist to discuss customized solutions for your business
Cons
  • High annual revenue requirement
  • Requires daily or weekly payments
  • Factor rate makes it difficult to compare loan costs with other lenders

Why we picked it

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How to qualify

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What is a small business loan?

Small business loans help new and established companies access capital for various business needs. With business financing, you can purchase inventory, invest in new equipment, build an expansion or cover emergency expenses.

Traditional banks, credit unions, online lenders and government agencies all offer small business loans.

The best business loan for your company depends on how much you need, your business’s qualifications and how quickly you need the funds.

Types of small business loans

Loans for small businesses come in a variety of flavors, with terms as short as a few months or as long as 25 years. Here are some common types of business loans to consider:

Types of Small Business Funding

Loan TypeDefinitionMinimum Credit ScoreFunding Time
Business term loansTerm loans deliver money in a lump sum and offer fixed payments on both the principal and interest.500Same day to 3 months
Business lines of creditBusiness lines of credit allow you to borrow repeatedly up to a set limit, only charging you interest on what you’ve borrowed.600Same day to 14 business days
Equipment financingEquipment financing can be used to buy equipment and machinery for your business. The equipment itself secures the loan, making it easier to qualify for than other loans.550Same day to 2 months
Commercial loansCommercial loans can be used to buy equipment or property for a business. They’re like mortgages, except they often require a higher down payment.650Same day to 3 months
SBA loansSBA loans are guaranteed by the U.S. Small Business Administration (SBA), offering long repayment terms with capped interest rates.680 (recommended)2 weeks to 3 months
MicroloansMicroloans are loans for $50,000 or less. They are often geared toward business owners who run startups and minority entrepreneurs.300Same day to 2 months
Working capital loansWorking capital loans and working capital lines of credit are umbrella terms for financing that covers short-term operating expenses, like payroll or cash flow gaps.570Same day to 2 months

Business loan requirements

When you apply for a business loan, lenders want to know that your business and credit history are stable. Here are some common business loan requirements you may need to meet to get approved for small business funding:

  • TIME IN BUSINESS

    In general, your business will be in a stronger position to borrow if you can prove you have a track record of solid revenue over the past one to two years. This is more attractive to a lender than a company with spotty revenue over the past six months.

  • CREDIT SCORE

    Lenders use your credit score to determine your riskiness as a borrower. In most cases, you’ll need a good to excellent credit score in the mid-600s or higher to get a business loan, although certain lenders allow scores as low as 500. Your business credit score should be at least 80, although some lenders may rely on just your personal score when reviewing your loan application.

  • CASH FLOW

    A business cash-flow projection shows when money is collected, when cash goes out and what’s left. Lenders typically like to see that you understand where your business’s money is going each month.

  • COLLATERAL

    Collateral is an asset that lenders can legally seize if you can’t make payments. Common forms of collateral include real estate, equipment, money owed to your company (accounts receivable) and even cash. Some business owners use their personal assets — including their homes — as collateral on a business loan.

  • FIXED CHARGE COVERAGE RATIO

    Your business’s fixed-charge coverage ratio measures how well your company can pay its fixed expenses, including any debts and interest you have. Lenders use this metric to help determine whether or not to approve a business loan application.

  • WORKING CAPITAL

    Your working capital refers to the available money you have to fund your company’s day-to-day operations. You can calculate your working capital by subtracting the business’s debt liabilities due within a year from current assets that you can convert to cash.

View Your Small Business Loan Options

What to consider before getting a business loan

The process to get a business loan depends on the lender and the type of funding you need. Answering the following questions can help narrow down the best small business lending option for your short- and long-term needs:

Why do you need the funds?

Are you looking to buy a vehicle for your new food truck business? Are you looking for commercial real estate so you can expand to a second location across town? Or maybe you need some quick cash to fill in the gaps during the off-season.

What you can afford?

Look at your business budget to decide what you can afford. Some business loans are repaid monthly over long periods, while others require weekly or even daily repayment. Business loans are debts

you must repay, so make sure your business can handle the extra payment.

How can you get the best rates?

Before you decide to apply, take the extra time to shop around. Compare offers to get the best rates. This extra bit of legwork may reduce your interest or fees in the long run. Read small business lender reviews to ensure you are working with a reputable lender.

How to compare small business loans

In order to pick the best business loan, you can compare the following loan details:

  • Interest rate: Is the business loan interest rate variable or fixed? If the lender charges a factor rate, it’s worth converting it to better compare against other offers. Also calculate how much in interest charges you’ll pay over the life of the loan.
  • Repayment term: When do payments start? Do you prefer daily, weekly or monthly payments? Is there any option to delay or pause payments during times of financial hardship?
  • Time to fund: How long does the application process take? Traditional bank and SBA loans can take two weeks to three months to approve and fund, while online lenders can typically deliver funds within one to three business days. Keep in mind that the quickest business loans aren’t always the most affordable.
  • Additional fees: Make sure to check the fine print for extra fees, such as origination fees, late charges and business loan prepayment penalties.

Key callout icon Before closing your loan

After approval, the closing process involves reviewing documentation that will determine the terms of your selected loan. A business loan agreement is a legally binding contract that dictates your interest rate and repayment schedule.

Ensure you thoroughly understand what the lender is asking of you and what the terms mean for your business’s financial future. After you sign, you’ve agreed to everything in the contract — including what happens when you make late payments or can’t repay the debt.

Applying for a business loan through your bank

When looking for funding for your small business, it’s worth seeing what your current bank has to offer. Having an established relationship with a bank or credit union can often increase the likelihood of getting your business loan approved, especially if you have maintained good standing with another type of financing with them.

One benefit to sticking with your current bank is that you can access all of your accounts, like your bank account and loans, with one login, making it easier to stay on top of payments and track your finances.

Start by getting a quote with estimated interest rates, terms and fees. Some banks and credit unions might run a hard credit check. But don’t worry, you generally have around 14 to 45 days to get quotes from additional lenders without any further impact to your credit score — multiple credit checks for the same type of financing are generally counted as one inquiry so you can rate shop. This means you can get a quote from your bank and from a variety of online lenders to compare interest rates and see if sticking with your bank is the best option.

Banks that offer small business loans

Banks that offer business loans include:

  • Chase
  • Wells Fargo
  • U.S. Bank
  • Capital One
  • Bank of America
  • American Express

Bank of America offers additional perks for business customers, such as business loan rate discounts, free business credit score monitoring and tips on cash flow strategies. And if you have an active American Express credit card, you can log into your account to see if you’re eligible for an American Express Business Line of Credit pre-approval offer.

Small business loan application checklist

Applying for a small business loan involves rounding up necessary documents for your loan application. The exact paperwork differs across business funding partners, but here are some documents you might need to provide:

Additional business funding options

In addition to traditional business financing, here are some other ways to fund your company.

Merchant cash advance

A merchant cash advance (MCA) gives you a lump sum of cash upfront against your future sales. You repay the merchant cash advance through a percentage of daily or weekly credit card sales.

While this type of funding can deliver cash fast, it tends to be a more costly way to borrow money for your company.

 
 

Invoice factoring

Invoice factoring allows businesses to sell unpaid invoices to a factoring company in exchange for a cash advance.

This can be a good option for cash-strapped businesses or those with poor or limited credit, but you can typically get only 70% to 90% of your invoice face value.

Invoice factoring can also get expensive, with factoring rates going as high as 8.25%.

Business credit cards

Business credit cards can help track business expenses and unlock cash back or travel rewards while monitoring employee spending.

To avoid paying a high annual percentage rate, pay off your credit card statement balance in full by the due date.

 
 
 

Small business grants

Federal government agencies, state governments, private corporations and foundations offer grants for small businesses.

You can narrow your search based on business type, location and demographics, such as minority business grants and business grants for women.

Because grants provide free money that typically doesn’t need to be repaid, competition can be stiff.

Crowdfunding

Business crowdfunding is when you ask family, friends and the general public for donations to kickstart your business.

This method can help you test out a business idea and generally appeals to startups or businesses struggling to get funding.

Just be aware that some crowdfunding platforms deduct a fee before distributing your total donations.

 
 

Peer-to-peer lending

Peer-to-peer lending, or P2P lending, is a type of financing where individual and commercial investors provide the loan funds rather than a financial institution.

A P2P online platform acts as the coordinator between you and the investors, helping process and finalize your loan details.

While P2P loans typically have more lenient qualifying requirements, they can take longer to fund than other types of financing. Additionally, P2P lending might not be available in your state.

Personal loans

Personal loans for business may be easier to get if you struggle to meet the strict eligibility criteria for a business loan.

However, this type of financing relies on your personal credit and income, putting your personal credit and assets at risk.

And personal loans won’t help you build business credit, nor can you claim the loan interest as a qualified business tax deduction.

Bootstrapping

Bootstrap financing is when you use your own financial resources to fund your business.

Startup businesses may use bootstrapping to get off the ground, but you risk not recouping your investment if your business fails to thrive.

 

How we chose the best small business loans

We considered more than 30 leading small business lenders to determine the overall best 13 small business loans. To make our list, lenders had to meet the following criteria:

  • Eligibility requirements: To include financing options for businesses at different stages of life, we included lenders with a wide range of credit score, time in business and annual revenue requirements, focusing on the best lenders for specific situations.
  • Rates and terms: We prioritized lenders with competitive rates, fewer fees and flexible repayment terms.
  • Time to funding: We know there are times when businesses can’t afford to wait for financing, so we prioritized lenders with funding times within one to three days, noting instances where funding timelines may be longer.
  • Repayment experience: We consider each lender’s reputation and business practices, favoring lenders that report to all major credit bureaus, offer reliable customer service and provide unique perks, like rate discounts and business coaching.

Frequently asked questions