2 days ago
54
Key takeaways
- Small-business loans provide capital to bridge funding gaps, fuel growth and ensure operational flexibility.
- Traditional banks, credit unions and online lenders offer diverse funding options, including SBA loans, lines of credit, revenue-based financing and term loans.
- Many lenders require personal guarantees, making your personal assets forfeitable if the business defaults on the loan.
- Evaluate eligibility requirements and compare total loan costs to find the right lender.
Compare the best small-business loans of 2026
Lendio
Prime + annually$5 millionTerm, line of credit, equipment, real estate, SBA, revenue-based
Bank of America
Prime + 0.00% annually $5 millionTerm, line of credit, equipment, real estate, auto, SBA
Kapitus
7.50% annuallyUp to 100% financingTerm, line of credit, equipment, SBA, revenue-based
Fundbox
4.66% for 12 weeks$250,000Line of credit
Fundible
0.75% monthly$10 millionTerm, line of credit, equipment, SBA, revenue-based
Lendistry
7.75% annually$5 millionTerm, SBA
Chase
Not disclosedUp to 90% financingTerm, line of credit, real estate, SBA
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 options with affordable payments.
Best for comparing business loans: Lendio
Lendio lets you compare business loans from dozens of lenders. Rates and funding amounts vary by lender and loan type. Small Business Administration (SBA) loans, equipment loans, lines of credit, term loans and other products are available.
Lendio
Financing Types
Term, line of credit, equipment, real estate, SBA, revenue-based
Max. Funding Amount
$5 million
Starting Rate or Fee Structure
Prime + annually
Lendio is a loan marketplace connecting small-business owners with its lender network. It offers many products, including term loans, lines of credit and equipment financing. If you use the money for business acquisition, you might have access to larger loan amounts and longer repayment terms. Funds are often deposited in one to two business days, although some financing types, such as real estate and SBA loans, can take months.
Business requirements vary by lender, and Lendio’s application is designed to match you with loans for which you are likely to qualify. Some of Lendio’s partners work with fair- or bad-credit borrowers, but costs can be higher. While starting rates are competitive, you must submit your information to receive a quote.
Best for traditional bank business loans: Bank of America
Bank of America offers term, SBA and other loans with competitive rates. It provides secured and unsecured financing options. You can apply in person at a physical branch or online for certain loans.
Bank of America
Financing Types
Term, line of credit, equipment, real estate, auto, SBA
Max. Funding Amount
$5 million
Starting Rate or Fee Structure
Prime + 0.00% annually
Bank of America is a traditional bank offering various business financing options, including term loans, lines of credit, equipment loans and real estate loans. It does not disclose maximum funding amounts on all products but imposes a $10,000 minimum on unsecured lines of credit, unsecured term loans, equipment loans and business auto loans. Secured loans and lines of credit are available. Bank of America also participates in SBA programs, providing government-backed loans that might cost less than other financing options.
The time in business requirement for a cash-secured line of credit is six months, which can be attractive to new business owners. Unsecured term loans and lines of credit require a minimum personal score of 700, making qualification challenging for some borrowers.
Best for revenue-based financing: Kapitus
Kapitus offers revenue-based financing, which provides fast funding and flexible daily, weekly or monthly repayment. The lender also offers other products with competitive rates.
Kapitus
Financing Types
Term, line of credit, equipment, SBA, revenue-based
Max. Funding Amount
Up to 100% financing
Starting Rate or Fee Structure
7.50% annually
Kapitus offers various business loans, including short-term options, revenue-based financing and lines of credit. You can also access SBA and equipment loans. Kapitus features high maximum funding amounts, allowing qualified borrowers to access up to $5 million—and more for equipment loans.
However, Kapitus also has a higher credit score requirement than some competitors. Revenue-based financing offers daily, weekly and monthly payment options but might have high costs.
Best for lines of credit: Fundbox
Fundbox offers a line of credit with funds available within two business days after draw. Its time in business requirement is accessible for newer companies.
Fundbox
Financing Types
Line of credit
Max. Funding Amount
$250,000
Starting Rate or Fee Structure
4.66% for 12 weeks
Fundbox offers $250,000 lines of credit to companies with at least three months in business. The annual revenue requirement is $30,000. Because Fundbox has accessible eligibility criteria, it might be appropriate for startups.
Fundbox's costs might be higher than those of traditional lenders and some alternative lenders. Additionally, its repayment terms are relatively short. The costs might be worth paying for borrowers who need fast access to capital, however.
Best for borrowers with 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 score of 500.
Fundible
Financing Types
Term, line of credit, equipment, SBA, revenue-based
Max. Funding Amount
$10 million
Starting Rate or Fee Structure
0.75% monthly
Fundible is an online lender specializing in flexible financing for business owners of various credit profiles. It offers accessible revenue and time in business requirements in addition to a low minimum credit score for all financing types. Repayment terms vary.
Borrowing costs can be high. Fundible uses a monthly interest rate for some financing types, so comparing costs can be difficult. This lender does not disclose its fee structure until application, making it hard to determine whether origination or other fees apply. Before finalizing paperwork, confirm total loan costs.
Best for underserved communities: Lendistry
As a community development financial institution, Lendistry focuses on underserved communities by offering flexible underwriting terms. The lender also provides access to SBA programs.
Lendistry
Max. Funding Amount
$5 million
Starting Rate or Fee Structure
7.75% annually
Lendistry is a community development financial institution specializing in small-business and SBA loans for underserved communities. Its products are suitable for working capital, payroll, operating expenses, inventory, debt refinancing and other purposes. Repayment periods range from one to five years for business term loans, with funding amounts up to $350,000. SBA loans offer repayment periods of 10 to 25 years and up to $5 million in funding. Smaller loans are available with a streamlined process, as Lendistry is an SBA-preferred lender.
Lendistry has a minimum credit score of 620 but doesn’t disclose a revenue requirement. However, it says monthly payments for term loans should be less than 25% of income. Borrowers can avoid the two-year time in business requirement by showing five years of industry experience. Newer companies must consider other options.
Best for existing customers: Chase
Chase offers its best loan terms and rates to existing customers. You can find personalized financing solutions and guidance in addition to faster SBA processing times, as Chase is an SBA-preferred lender.
Chase
Financing Types
Term, line of credit, real estate, SBA
Max. Funding Amount
Up to 90% financing
Starting Rate or Fee Structure
Not disclosed
Chase is a traditional bank with locations throughout the country. It encourages borrowers to visit local branches for their business financing needs.. If you have an existing business banking relationship with Chase, you might get rate discounts on some products. Chase is also an SBA-preferred lender.
Like other traditional banks, Chase has relatively strict eligibility requirements, including two years in business for certain products. The website isn’t transparent about some loan costs, and funding can take two weeks or longer.
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:
Cost: 30%
The cost of borrowing reduces profits, so we prioritized rates and fees. Business financing options can be difficult to compare because not all providers use an annual percentage rate. Some use a simple interest rate, or a lender might charge based on a 12-week rate instead of an annual rate. Some providers charge a factor rate, which is a multiplier used to determine the total amount repaid.
Lenders offering lower base rates received more points, as did providers with no origination fees or prepayment penalties.
Loan options: 28%
Business owners often need flexibility in their financing. Lenders that provide various loan types, repayment options and amounts scored more points than those with more limited choices. We reviewed whether lenders offer revenue-based and equipment financing options in addition to term loans and lines of credit.
Lenders offering higher amounts, longer terms and payment frequency options also received more points than those with more limited offerings. Financing providers were awarded extra points for a fast process resulting in funding within 24 hours.
Underwriting requirements: 20%
Small businesses, especially newer companies, often struggle with demanding lender criteria. We awarded more points to lenders with more flexible requirements. Financing providers received more points when making it easier for companies existing for six months or less to get funding. Likewise, lenders with lower annual revenue requirements received more points.
Our team also evaluated lenders for bad-credit options and personal guarantee requirements. Providers that accept business owners with lower credit scores received more points. We also assigned higher point values to lenders that don’t require a personal guarantee.
Transparency and disclosures: 13%
Business owners like being able to understand terms and conditions and get an idea of cost before choosing a lender. We reviewed lender websites to rate the visibility of important information. We also considered whether finding disclosure information on a provider’s website is relatively easy.
Because prequalification can provide helpful information to borrowers, we awarded more points to lenders that use a soft credit pull to provide quotes and prequalification.
Customer experience: 9%
Applying for financing can feel burdensome, so we evaluated how providers streamline the process and make it easier for business borrowers. We looked at whether lenders offer a simple online application and the availability of specialists to help business owners navigate the process. Lenders offering multiple customer service contact options received more points.
Buy Side team members also looked at reviews from trusted online sites such as Trustpilot. Business financing providers with higher customer satisfaction reviews were received more points.
Small-business outlook for October 2026: rate updates, SBA rule changes, global economy and oil prices
Lending standards might tighten as rates and fuel prices increase, tariffs fluctuate and the SBA aims to qualify larger companies for loans. The overall outlook is influenced by market and economic factors as well as policy decisions.
Fed rate increases
The Federal Reserve broke its three-year streak of not raising rates during its September meeting when inflationary pressures pushed the benchmark a quarter-point higher The vote was unanimous. CME Group’s FedWatch tool predicts another increase before the end of 2026.
SBA rule changes
Proposed rule changes would expand the definition of what a small business is, granting faster-growing and larger organizations access to more SBA loan programs. Proponents say the changes will help the economy, while opponents say they will reduce accessible funding for truly small businesses.
Other rule changes are in effect this year. The SBA doubled its cumulative loan limit to $10 million, and permanent residents (green-card holders) are no longer eligible for SBA financing. All business owners must now be U.S. citizens or nationals to qualify for SBA 7(a) or 504 loans. Current borrowers aren’t affected, but new applicants should ensure the new ownership requirements are met.
Global economic concerns and oil prices
Tariffs can increase the cost of goods, disrupt supply chains and make planning a challenge. Increasing fuel prices can also raise costs across the board. Diesel, which is primarily used in land-based supply chains, including freight trains and trucking, reached a historical high of nearly $6.53 a gallon in September.
Stock market trends in the United States and around the world can provide insight into how businesses feel about current events. To hedge against uncertainties, establishing a small-business line of credit before you need it might make sense. Doing so could reduce stress and smooth cash flow, providing on-demand capital to address rising costs.
Business loan calculator
Run the numbers to determine how much borrowing might cost you. Use various scenarios to figure out the best way to fit your loan payments into your cash flow and business budget.
Enter your loan information
What is a small-business loan?
Small-business loans are financing agreements between lenders and companies that are designed to help owners access capital to meet payroll obligations, buy equipment or expand operations.
Small-business financing often has shorter repayment terms than personal loans or other types of consumer financing. Some lenders offer five-year terms, but two-year terms are 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 most reputable business lenders often require a personal guarantee and are willing to seize your personal assets if the business defaults.
Types of small-business loans
You’re likely to see small-business loans classified as the following types. Note that there can be overlap. An SBA term loan might be used for equipment financing, for example. However, these are common categories, and understanding them can help you find suitable financing.
Loan type | Loan details | Min. Credit score | Best for |
Term loan | - Lump sum repaid over a set term - Maximum term often two to five years | 550 | One large purchase |
Lines of credit | - Revolving line you draw against as needed up to set limit - Borrowing period often up to two years - Daily, weekly or monthly repayment | 600 | Flexible financing |
SBA loan | - Lump sum partially guaranteed by the SBA and repaid over a set period - Strict eligibility requirements - Longer funding time | 650 | Low rates and long repayment terms |
Revenue- | - Upfront payment based on a percentage of future credit or debit card sales - Costs typically high | None | Fast funding and accessible requirements |
Micro loan | - Lump sum of up to $50,000 - Typically reserved for startups | None | Startups and owners with limited credit |
Equipment financing | - Financing for business equipment - From machinery to computers - Typically secured by equipment financed | 520 | Lower rates |
Commercial real estate loan | - Funding for establishing, expanding or improving a brick-and-mortar location - Longer repayment terms | 660 | Real estate |
How to choose the right loan for your business
A good business loan should help you meet your goals while being affordable. Start with a familiar lender, such as your bank or credit union, and then expand your search to compare three to five others.
- Funding: Amounts vary by lender and loan type, so verifying that a provider meets your capital needs is important. Funding times also vary. Some lenders offer same- or next-day funding, while others can take weeks to fund.
- Eligibility requirements: Time in business and revenue requirements might apply. For example, you might have to be in business for one year and generate $10,000 in monthly revenue to qualify for certain loans.
- Payment affordability: Your repayment term affects your payment amount, so selecting one that works for your budget is important. For example, a one-year term might make repayment too challenging, while a two-year term could be more comfortable.
- Overall cost: Comparing business loan costs can be challenging. Lenders advertise various rates, such as annual percentage rates and factor rates, and have different payment frequencies and fees. Use online calculators and loan officers as resources to estimate costs.
- Lender reputation: Check out reviews and talk with other business owners to determine how a lender treats its clients.
- Credit reporting: A lender can help your business establish a credit history by reporting to a business credit bureau, which could qualify you for more funding at better rates later.
- Fees: Many lenders determine fees based on applications. Prime credit borrowers might face fewer or lower fees. Each lender calculates risk using proprietary methods.
Business loan requirements
Applying for a business loan is similar to applying for other financing, though additional documentation might be required. Many business lenders check your business and personal credit and require personal guarantees as part of the process.
- Time in business: Lenders often require that you be in business for six months to two years before they provide funding.
- Annual revenue: An annual or monthly revenue threshold usually applies. Depending on the lender and the loan, your business might need to earn $30,000 to $250,000 a year.
- Personal credit score: Credit score requirements typically apply for business loans. Many lenders require scores in the low 600s or higher, although minimums vary.
- Business credit score: Some lenders evaluate your business credit, 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 and hemp products, 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. Many online lenders offer SBA programs in addition to lines of credit, term loans and revenue-based financing. SBA loan criteria are often stricter.
Pros and cons of small-business loans
Pros
- Capital to meet business needs
- Maintain company ownership
- Might build a separate credit profile for your business
Cons
- Repayment costs
- Increase your business debt burden
- Can affect your personal credit if you default
Pros explained
- Capital to meet business needs: Use the loan for 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.
- Might 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: You typically pay interest charges and/or fees, increasing overall expenses.
- Increase your business debt burden: Your business loan is reported on your balance sheet, which can affect your company's financial stability and cash flow.
- Can affect your personal credit if you default: Many business lenders require a personal guarantee, meaning the creditor can seize your personal assets if you default on the debt. Additionally, your personal credit report can be affected.
Start by taking stock of what you have and what you need to succeed. Then, find the most reputable and lender with the least costly loan option that meets your needs.
1. Determine your business needs
How you’ll use the funding helps determine the loan type. Does your business need new machinery or cash to cover paychecks? A secured term loan can cover one big expense, while a line of credit might be ideal to maintain operational liquidity.
Knowing your credit score, assets and time in business is also important. You might need to search for a fair-credit business loan, unsecured financing or a start-up funding opportunity, depending on your situation.
2. Research lender requirements
While there are standard requirements for various loan types, each lender has a proprietary method of assessing risk. A 600 credit score is commonly required for an equipment loan, but an online lender might accept a 520 credit score if the business has strong revenue, little outstanding debt and a large down payment.
3. Run the numbers and prequalify
Once you find a few lenders you could qualify with, compare advertised loan costs. Use calculators to play out financial scenarios and determine what’s affordable. Doing so can help you eliminate options, narrowing down loan type and lender. You might find that using assets as collateral and going through a longer funding process is worth the interest savings.
Complete prequalification applications with the final contenders. Doing so does not harm your credit and provides insight into estimated rates and terms.
4. Prepare documentation and apply
Gathering everything you might need ahead of time can streamline the application process, especially if part of it must be done in person or over the phone.
- Business documents: legal registration forms, business licenses and permits, operating agreements, business plans and employer identification numbers
- Personal identification: government-issued photo IDs and other documents showing addresses, phone numbers, dates of birth and Social Security numbers
- Bank and financial statements: balance sheets, cash-flow statements, profit and loss statements and bank statements
- Tax return information: personal tax returns and Schedule K-1 (Form 1065) documents
Contact the lender with any questions. If the lender reaches out to you, replying quickly with any requested documentation can expedite the decision process.
What should I do if my business loan is denied?
If you receive a denial, ask the lender what you can do to improve your application. You might need to make a larger down payment, improve your credit or pay down existing personal debt. Determining the denial reason can give you specific goals. It can also help you know what to look for in another lender if you need funding now.
Alternatives to small-business loans
You don’t need to get a business loan to fund your small business or expand your offerings. If qualification is out of reach or 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 one for smaller purchases and recurring bills to build up a credit score.
- Crowdfunding: See if you can get people in your network to help you fund your business. By offering nonmonetary 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 see if they’re willing to provide the capital.
- 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. Doing so can reduce your need to borrow.
FAQ
What credit score is needed for top lenders?
Many business lenders have relatively low minimum credit scores, often in the low to mid-500s to low 600s. However, you’re likely to unlock the best rates and terms if you have a higher credit score.
Are SBA loans always the cheapest?
SBA loans are often cheaper than short-term loans or revenue-based financing. However, some SBA loans have higher rates than other business loans. Compare options before making your decision.
Can startups qualify for these loans?
Startups are unlikely to qualify for SBA loans, but they might qualify for business loans from online lenders. Online lenders often have time in business requirements of a year or less, making them more accessible for startups.
What fees should borrowers watch for?
Pay attention to origination fees, prepayment penalties and other costs. In some cases, you might pay a draw fee when accessing a line of credit, or there might be a factoring fee with invoice factoring.
Am I personally liable for a small-business loan?
Many lenders require personal guarantees, permitting them to seize your personal assets if the business defaults.
How much income do you need to get a small-business loan?
Business lenders typically have minimum annual revenue requirements, often between $30,000 and $250,000.
Meet the writer
Miranda Marquit was a staff senior personal finance editor for Buy Side.
