Key takeaways

• Traditional banks, credit unions and online lenders are included in Buy Side’s best small-business loans rating.
• Small-business loans are often available as term (installment) loans, lines of credit or revenue-based financing, which focuses on repayment through a percentage of sales.
• Many small-business loan lenders require a personal guarantee, meaning they can seize your personal assets if you don’t repay your business loan.

When you need extra capital to take your business to the next level—or make sure you have the flexibility to take advantage of opportunities—a small-business loan can help. 

Consider banks and online lenders that offer various loan options, including Small Business Administration (SBA) loans, term loans, lines of credit and revenue-based financing. Pay attention to eligibility requirements and loan costs to find the best small-business loan lender to meet your needs.

Buy Side’s best small-business loans are evaluated using data-driven metrics focusing on key areas such as affordability, loan options, underwriting requirements, transparency and customer experience. Advertisers and partners don’t influence our methodology or ratings, as our research and editorial team maintains its independence.

Compare the best small-business loans of 2026

More details on the best small-business loans

Understanding your small-business loan options can help you compare lenders and make the best choice for your current and ongoing needs. Avoid borrowing more than you need and look for offers that allow you to make payments comfortable for your budget.

Best for comparing business loans: Lendio

Lendio lets you compare business loan options from dozens of lenders. Rates and funding amounts vary by lender, but you can access SBA loans, equipment loans, lines of credit and business term loans.

Best for a traditional bank business loan: Bank of America

Bank of America offers traditional term loans and SBA loans at competitive rates. You can apply in person at a physical branch or online. Time in business and annual revenue requirements are accessible to a variety of owners.

Best for revenue-based financing: Kapitus

Kapitus provides access to revenue-based financing, which can deprioritize your personal credit score in favor of your business income. Kapitus also offers other types of financing at competitive rates.

Best for line of credit: Fundbox

Fundbox offers a line of credit up to $250,000. Funds are available as soon as the same day. You need at least $30,000 in annual revenue and three months in business. Choose from available repayment terms of up to 52 weeks.

Best for bad credit: Fundible

Many lenders check your personal credit when you apply for a business loan. Fundible has one of the most flexible personal credit requirements, with a low minimum credit score of 500.

Best for underserved communities: Lendistry

As a community development financial institution (CDFI), Lendistry focuses on underserved communities by offering flexible underwriting terms. This minority-led lender offers access to SBA programs, including business loans aimed at minorities.

Best for existing customers: Chase

Chase offers its best loan terms and rates to existing customers. Chase offers personalized solutions and guidance for business owners looking for funding. Chase is an SBA-preferred lender.

Small business outlook for 2026: rate updates, SBA rule changes, global economy and oil prices

The small business outlook is influenced by market and economic factors, as well as policy decisions. Pay attention to how events can impact supply chains, fuel costs and other expenses that can affect overhead. 

Rates hold steady, but increases could come later in the year

The Federal Reserve kept rates steady during its recent July meeting, and experts suggest that inflation pressures might result in a higher benchmark later in the year. Business loan rates remain higher when compared with pandemic-era lows. 

SBA rule changes for green card holders

Permanent residents (green card holders) are no longer eligible for Small Business Administration (SBA) loan programs. A new rule requires that all owners of a business be a U.S. citizen or national to qualify for SBA 7(a) or 504 loans. Current borrowers aren’t affected, but new applicants should review ownership to ensure the new ownership requirements are met.

Global economic concerns and oil prices

Tariffs continue contributing to uncertainty, which can result in planning challenges. Additionally, levies can increase the cost of goods and disrupt supply chains. A small-business loan or line of credit could help smooth cash flow and provide capital to handle rising costs.

Stock market trends in the United States and around the world can provide insight into how businesses feel about current events, and concerns about AI chip makers and other companies are starting to cause a little volatility. The situation around Iran remains somewhat uncertain and that could impact business interest rates as well. 

Business loan calculator

Run the numbers to determine how much borrowing might cost you. Don’t forget to use various scenarios to figure out the best way to fit your loan payments into your cash flow and business budget.

What is a small-business loan?

Small-business loans are designed to help business owners access capital to meet payroll obligations, buy necessary equipment or expand their business activities. 

Small-business loans often have shorter terms than personal loans or other types of personal debt. While some lenders offer five-year terms, two-year terms are also common. The assumption is that you will ramp up your business cash flow in time to pay off the balance.

While there are separate business credit reporting agencies, even the best business loan lenders often require a personal guarantee and are willing to seize your personal assets if you can’t make your business payments.

Types of small-business loans

When reviewing the best small-business loan lenders, consider whether they offer the following loan types:

• Term: These loan types function similarly to other installment loans. You make payments on a set schedule and finish repaying the debt within a set period. Many lenders have maximum loan terms of two years for unsecured business loans, although some have five-year terms. You likely need a secure business loan, such as an equipment loan, to qualify for a longer term.
• Line of credit: You can get a revolving line of credit for business purposes for a finite period. Many small-business loan lenders offer repayment terms of up to two years. If you want revolving credit for a longer period, you might need to get a business credit card. A line of credit might require daily or weekly payments rather than monthly payments, depending on the lender.
• SBA loans: The SBA backs loans made by its partners. They are usually installment loans with longer terms than the term loans offered by online lenders. Eligibility requirements are often stricter, and receiving funding takes longer.
• Invoice financing: A lender issues financing based on your outstanding invoices. You collect on your invoices to repay the loan plus fees.
• Invoice factoring: The provider gives you a lump sum based on a percentage of your outstanding invoices and is responsible for collecting payment. Once the invoices are paid, you receive the remaining amount minus fees.
• Equipment financing: Business equipment, such as machinery, computer systems, payment terminals or other valuable business assets, secures the loan. A lender can repossess the equipment if you default.
• Commercial real estate loans: Use a loan to purchase property for business purposes. The property becomes collateral, and the lender can repossess it if you default.

What are the requirements for a business loan?

Applying for a business loan is similar to applying for other debt. You normally need to demonstrate that you meet income requirements. Many small-business loan lenders will also check your personal credit and require a personal guarantee as part of the process.

Before applying for a loan, ensure you understand the criteria required by most small-business loan lenders:

• Time in business: Lenders often require that you be in business for at least one or two years before they will provide funding. However, some have less stringent requirements and offer loans to companies that have been in business for six months or less.
• Annual revenue: A minimum threshold for annual revenue usually applies. Some lenders express it as monthly revenue, especially if they accept applications from companies that have been in business for less than a year. While a lender might have a higher maximum funding amount, your loan will be based on your revenue and ability to repay the loan within the short term.
• Personal credit score: You’re likely to see a minimum credit score requirement when you apply for a business loan. The minimum score for many lenders is in the low 600s, although it varies.
• Business credit score: Some lenders review your business credit profile, which is separate from your personal credit. Various scoring models exist, but you generally need a higher score to qualify if the lender checks your business credit.
• Industry: A lender might specialize in providing financing to businesses in a specific industry. Additionally, some industries, such as gambling, might be excluded from financing.
• Business debts: Lenders also consider how much debt you have. You might not qualify if your business has a high debt-to-asset ratio.

In many cases, getting an online business loan is easier than going through a bank or credit union. SBA loan criteria are often stricter and determined by the lender based on basic requirements, including restricting how you can use the funds. Many online lenders also offer SBA programs, but they might list them separately from their lines of credit, term loans and revenue-based financing options.

Pros and cons of a small-business loan

Pros explained

• Capital to meet business needs: Use the loan for various purposes, including payroll, inventory, rent, equipment and other business-related costs.
• Maintain company ownership: With a business loan, you don’t promise a portion of your profits as you do with equity financing. You maintain full company ownership and control.
• Can build a separate credit profile for your business: Some lenders report to business credit agencies, providing a way for your company to establish a separate profile and score.

Cons explained

• Repayment costs: Debt typically has costs in the form of interest charges and/or fees, increasing overall expenses.
• Increases your business debt burden: Your business loan is reported on your balance sheet, which can affect your business's financial stability and cash flow.
• Can impact your personal credit if you default: Many business lenders require a personal guarantee, meaning the creditor can come after your personal assets if you default on the debt. Additionally, a default might be reported on your personal credit report.

How to compare small business loans

A good business loan should help you meet your goals while being affordable. Compare three to five of the best small-business loan lenders to determine which might be the best fit for your needs.

As you compare business loans, keep these factors in mind:

Rates

Comparing business loan interest rates can be challenging because many lenders use a factor rate, which is expressed as a decimal instead of a percentage. 

A factor rate is multiplied by your original loan amount to determine the total amount you repay. These rates are often used for short-term loans and revenue-based financing. Factor rates of 1.0 to 1.5 are common. They can translate into relatively high APRs, however. 

Eligibility requirements

You often need to demonstrate that you’ve been in business for a set period and generate a certain amount of revenue. For example, you might have to be in business for one year and generate $10,000 in monthly revenue. 

Determine whether you meet the criteria and if you might have a better chance of qualifying for one loan instead of another.

Repayment terms

Most business loans are short term, meaning you must repay them within two years. Some lines of credit require repayment in as little as 12 months. Compare maximum repayment terms to determine whether you might have a more flexible timeline with one lender versus another.

Funding amount

Verify that the lenders you compare can meet your capital needs. Some lenders offer as much as $1.5 million, while others might offer only $250,000. 

Reports to business credit bureau

If you hope to build your business credit separate from your personal credit, you need a business credit report. A lender that reports to a business credit bureau can help you establish a credit history that can qualify you for more funding at better rates later.

How to get a small-business loan

Before you apply for a business loan, ensure you have the required information available. You’re likely to receive a quicker decision and faster funding when everything is ready to go.

• Business information: Know how long your business has been active, its annual and monthly revenue and your employer identification number. If you have a business bank account, have that information readily available.
• Bank statements: Many small-business loan lenders require at least three months of business bank statements.
• Tax return information: If you have Schedule K-1 (Form 1065) documents, have them available, along with your personal tax return.
• Personal information: As with any loan, you need your Social Security number, address, phone number and other identifying information. 

If your business lender offers a phone number you can call to connect with a specialist, use it to determine the additional documentation you might need.

Once you’re approved, provide your business bank account information to receive the funds and begin repaying the loan.

Alternatives to small-business loans

You don’t need to get a business loan to fund your small business or expand your offerings. If you can’t qualify for a business loan or if you’re concerned about the cost, consider these options:

• Small-business credit card: In some cases, you might be able to get a business credit card before qualifying for a loan. Consider using a business credit card for smaller purchases and recurring bills. If the credit card issuer reports to a business credit bureau, good habits might help you qualify for a business loan later.
• Crowdfunding: See if you can get people in your network to help you fund your business. By offering non-monetary incentives, such as a product, you might be able to raise enough money to take your small business to the next level.
• Friends and family: Consider whether you can borrow what you need from a friend or family member or if they’re willing to provide the capital for your business idea or expansion.
• Personal loan: In some cases, you might be able to access better terms with a personal loan. Costs might be lower, and you could have a longer repayment period with smaller monthly obligations, especially if you have good credit. Some lenders exclude business purposes from their personal loans, however.
• Savings: Consider saving up to start a business, or set aside money in a business savings account to cover unexpected costs. This can reduce your need to borrow.

How Buy Side chooses the best small-business loans

We evaluated more than 34 small-business lenders, focusing on key areas such as affordability, loan options, underwriting requirements, transparency and customer experience. Advertisers and partners don’t influence our methodology or ratings, as our research and editorial team maintains independence in using data-driven processes. We assessed each lender based on characteristics business owners might find appealing, such as offering traditional business loan products, discounts, application guidance, bad-credit options and solutions for short-term funding needs. We focused on lenders with at least $1 billion funded that have been in business for five years or more. We also verified that the traditional and online lenders offer loans in most states. Learn more about how Buy Side rates the best small-business loans using data-driven methodologies.

We weighted five factors to come up with our business loan ratings:

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