The best small business loans will vary based on your specific business needs and circumstances, but I’ve compiled a list of the best lenders for several different categories. These lenders, listed below, specialize in things like providing excellent customer service, on-demand access to funds, flexibility of qualification requirements, fast funding speeds, and more.
In selecting from one of the eight best lenders for small business loans below, consider the features most important to you, as each has its pros and cons:
Best Small Business Loans at a Glance
Lendio: Best Overall Flexible Qualifications and Loan Options
Why I Like Lendio
Lendio is my pick as the best overall company in this list of the best small business loans because it has the widest range of loan products. As a business loan broker, it has over 75 different lenders in its network. As a borrower, this means that with just one single application to Lendio, you could be considered for each of these lenders, something that can save you time and money from having to apply separately.
If you decide to work with Lendio, you’ll be paired with a dedicated funding manager who will walk you through the process. This individual can also serve as an advisor to ensure you get the best type of financing for your short- and long-term business needs. Depending on the loan you’re getting, assistance with specific paperwork can also be provided. One of the downsides of Lendio, however, is that you may not know the specific rates, terms, or qualification requirements until after you apply.
The Lendio website contains detailed information about each of its lending programs and requirements. You can apply online for free and with no impact on your credit score to see the loan programs you could be matched with. In most cases, you pay only when your loan gets funded.
Bluevine: Best On-demand Access for Funding
Why I Like Bluevine
Bluevine offers a small business line of credit that—when coupled with a Bluevine business checking account (read our Bluevine business checking review)—can provide you with instant access to funds drawn. This makes it an excellent option for business owners wanting the peace of mind of knowing they can quickly and easily get funding to cover unexpected expenses, cash flow shortages, or other financial emergencies.
Unlike some credit line providers, Bluevine charges no early repayment fees, allowing you to save on interest charges. Payment plans default to weekly, but you can select a monthly repayment plan if you meet additional requirements. These requirements include a higher credit score of 700, time in business of three years or more, and at least $960,000 in annual business revenue.
The Bluevine website contains more information on how the credit line works. Online applications are available, and you could get a decision in as little as five minutes. Bluevine also reports payment history to the credit bureaus, which is something that can improve your business credit and help you qualify for more competitive rates in the future.
SBG Funding: Best for Custom Repayment Terms
Why I Like SBG Funding
If you’re a business owner concerned about how taking out a loan could impact your monthly cash flow, SBG Funding is a good option. That’s because it can offer custom repayment plans to suit your company’s needs. Examples of this include adjustments to your payment frequency, loan term, and even deferred payments for up to 90 days.
Another advantage of working with SBG Funding is the fact that it boasts a high approval rate of 85%. Keep in mind, however, that meeting the minimum stated requirements won’t always guarantee a loan approval.
If you have a low credit score or unstable finances, I recommend having compensating factors to boost your approval odds. SBG Funding also has a short turnaround time on loan approvals, as a loan representative I spoke with stated that approximately one-third of its applications are approved within the same business day.
SBG Funding’s website contains information on each of its loan programs. There, you can also access both an online or paper loan application. Online applications can be completed in under two minutes and will have no impact on your credit score.
Smarter Finance USA: Best for Equipment Financing
Why I Like Smarter Finance USA
Smarter Finance USA is one of the best equipment financing companies because of the combination of its network of lenders and flexible eligibility criteria. It has a network of nearly 40 different lenders and has no minimum requirements for credit score, time in business, or annual revenue.
However, a representative I spoke with recommended a minimum credit score of 600. If your score falls below that, be prepared to provide a larger-than-average down payment or present proof of significant assets or other items as compensating factors.
Smarter Finance USA specializes in vehicle and equipment financing. Examples of commonly financed equipment include various types of trucks—such as dump trucks, tow trucks, box trucks, and semi-trucks. Heavy equipment—like excavators, cranes, backhoes, and bulldozers—can also be financed.
Interested borrowers can visit the Smarter Finance USA website to learn about each of the different loan programs available. To begin the loan process, you can complete an online application where you’ll need to provide information about yourself and the business as well as certain required documentation. Based on the details of your business and the type of financing you’re seeking, a representative will then reach out to you for next steps.
QuickBridge: Best Easy Application and Approval Processes
Why I Like QuickBridge
Business owners looking for an easy application process from start to finish should consider QuickBridge. It offers a simple online application with minimal documentation for most applications, something that can reduce the likelihood of running into any potential complications. Additionally, working with QuickBridge gives you the ability to work with a dedicated funding specialist who can assist you through the process.
If approved for a loan, you can use proceeds for nearly any business-related purpose. Common examples include payroll, marketing, inventory, and working capital. As a testament to QuickBridge’s quality of service and loan products, the company states that 80% of returning customers have seen an increase in business revenue. QuickBridge also has a 4.8-star rating on Trustpilot through nearly 500 reviews.
The lender offers financing for companies in nearly any industry, including contractors, farming, food services, health, retail, and transportation. It also offers specialized loans to women- and minority-owned businesses. For more information, interested borrowers can visit the QuickBridge website.
National Funding: Best for Customer Service
Why I Like National Funding
National Funding offers a similar product to that of QuickBridge with regard to qualification requirements, rates, and terms. However, it has a greater track record of delivering excellent customer service, evidenced by its 4.8-star rating through nearly 2,000 reviews on Trustpilot. For that reason, I selected it as the better option for business owners wanting to place a larger emphasis on the service level they receive.
Compared with QuickBridge, one major difference is that National Funding offers a dedicated equipment financing program. You’ll need two years time in business to be eligible, and financing maxes out at $150,000. Customers can, however, save money on interest charges as National Funding offers a 6% discount on the remaining balance when paid in full early. For working capital loans, that discount is 7% if paid off within the first 100 days.
For equipment leases, National Funding offers a guarantee that you’ll get the lowest payment on your loan. If you can find a lower payment elsewhere, the company will pay you $1,000 toward qualifying executed leases.
Kiavi: Best for Real Estate Investors
Why I Like Kiavi
Due to the complexity of financing real estate, this type of loan is generally not associated with having fast funding speeds. Kiavi, however, offers funding in as little as seven business days as it offers programs that require no appraisal and no income verification.
It offers bridge financing, fix-and-flip financing, DSCR rental, and rental portfolio programs. Each is designed for a specific target audience.
- Bridge financing: This can be a good option for investors who are involved in time-sensitive bidding wars and just need a short-term loan to get the difference in funding needed to acquire the property.
- Fix-and-flip: This loan is for investors who intend to acquire a property, repair it, and then resell it for a profit.
- DSCR Rental: This is a potentially good option for investors who want to qualify for a property based primarily on its income-generating ability.
- Rental portfolio: This is geared toward investors with over five properties who want to consolidate payments into a single loan.
Like the other lenders we’ve selected in our guide, Kiavi delivers an exceptionally high level of service. In fact, we spoke with one of its representatives, who stated approximately 80% of its transactions are with repeat clients.
Grasshopper Bank: Best for SBA 7(a) Funding
Why I Like Grasshopper Bank
If you’re looking for SBA 7(a) funding, Grasshopper Bank can get you access to funding much more quickly than other lenders. This is because Grasshopper Bank is an SBA Preferred Lender and has the ability to make many lending decisions on behalf of the SBA, which reduces waiting times for things like document review, analysis, and decision making.
The SBA 7(a) program is among the most popular types of SBA loans, and loan proceeds can be used for nearly any type of business expense. In addition to the SBA 7(a) program, Grasshopper Bank offers SBA 504 financing, which is for financing major fixed assets that can create jobs or fuel the growth of a business. Notably, although its 504 program did not make our list of the best SBA 504 lenders, that is primarily due to the fact that the program is relatively new.
To get the process started, you can visit the Grasshopper Bank website. There, you can explore its other product offerings, including its lending program for commercial real estate and its banking products.
How I Chose the Best Lenders for Small Business Loans
Since the best small business loan will be different for each company, I considered popular loan types and features such as financing for individuals with bad credit or business owners in need of funding fast. I then selected the top lenders in those categories to create a roundup of the best small business loans. Additionally, I considered the following factors when applicable:
- Interest rates and estimated APRs
- Minimum and maximum loan amount
- Repayment terms
- Flexibility of qualification requirements
- Application, approval, and funding speeds
- Documentation requirements
- Loan programs offered
- Customer reviews and ratings
Factors to Consider When Selecting a Lender
Although it can be easily overlooked, choosing a lender can be one of the most important factors in getting a small business loan. The lender you choose can not only determine whether you get approved, but it can also impact how quickly you get funding, the amount of paperwork required, and the time needed to get through the lending process.
Below are several factors we recommend considering before choosing a lender:
- Interest rates
- Loan programs
- Additional business services (such as banking or investment services)
- Physical branch locations and hours of operation
- Online dashboard or mobile application features
- Underwriting flexibility
- Customer reviews and ratings
Alternative Funding Options for Small Business Loans
If you’re unable to get a small business loan, below are some options that don’t involve borrowing money. As a result, some of these funding sources can be easier to qualify for, although they may carry higher fees or take longer to fund.
- Funding from friends and family: Funding from friends and family can bypass the traditional qualification requirements of banks, making this easier to get if you have bad credit, little time in business, or low revenue. However, raising money from friends and family carries its own set of risks, such as potentially damaging the relationship if the business venture goes south.
- Rollover for business startups (ROBS): A ROBS allows you to get tax- and penalty-free access to your retirement accounts. Since it requires you to navigate areas of tax rules and regulations to avoid penalties, I recommend working with one of our best ROBS providers to walk you through the process.
- Crowdfunding: This is the process of raising funds from the general public. Many companies crowdfunding a business offer some sort of incentive in exchange for funds. Common examples include discounts, equity ownership in the company, or other perks upon release of a product.
Frequently Asked Questions (FAQs)
The best loan depends on your needs and circumstances. Common loan types include working capital loans, business credit lines, equipment financing, and real estate loans. Each has varying rates, terms, allowable uses, and qualification requirements. These items can also vary by lender.
I recommend a score of 620, although this can vary by loan program and lender. Some programs have no minimum score requirement, but getting approved may be dependent on a business having compensating factors such as financial reserves, a large down payment, or strong cash flow and revenue.
It’s possible to get a small business loan as fast as the same day. Depending on the type of loan you get, however, it could take several days, weeks, or even months in the case of an SBA loan.
Bottom Line
Our list of the best small business loans contains the top providers for multiple types of loans. Regardless of your business needs, you should be able to find one well suited for you. Before signing on the dotted line, I recommend shopping rates with multiple lenders, as this can help ensure you get the best loan currently available.
This post was originally published on here
