Compare the Best Small Business Loans Options of 2020 – Lee Chandler

Best Lenders for SBA Loans

Five Star Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • SBA loans can meet a variety of financing needs
  • Five Star is a preferred SBA lending partner; top 100 SBA lending partners in the U.S.
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

Five Star Bank is a preferred SBA lending partner, offering SBA 7(a) loans. Although the application process will be more detailed and take more time than that of online lenders, Five Star Bank can offer SBA loans with some of the best rates and terms available. These loans can be used for a variety of purposes and are well-suited for established, highly qualified businesses who are looking for long-term financing.

Loan Amount: $25,000 – $350,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 685

Min. Annual Revenue: $100,000

Min. Time in Business: Two years

Celtic Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • Celtic Bank offers SBA loans to borrowers across the U.S.
  • One of the top SBA lending partners in the U.S.
  • SBA loans can meet a variety of financing needs
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

Celtic Bank is a preferred SBA lender—in fact, they’re one of the top SBA lending partners in the U.S. Celtic Bank offers SBA 7(a) loans—with some of the most competitive rates and terms on the market. You can use an SBA loan from Celtic Bank to meet a variety of long-term financing needs, including purchasing equipment, inventory, or even acquiring another business. With high requirements and a lengthy application process, these loans are best for qualified, established businesses who don’t have an immediate funding need.

Learn more about SBA loans from Celtic Bank.

Loan Amount: $25,000 – $150,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 640

Min. Annual Revenue: $100,000

Min. Time in Business: Two years

First Home Bank

Pros
  • Offers loans with some of the most desirable rates, terms, and amounts on the market
  • SBA loans can meet a variety of financing needs
  • First Home Bank is a top-15 SBA lending partner in the U.S.
Cons
  • Need to meet high requirements to qualify
  • Slow and lengthy application process
  • Will require blanket lien and personal guarantee

A top-15 SBA lending partner, First Home Bank offers SBA 7(a) loans. With these SBA loans, you can access some of the best rates and terms of any business financing product on the market. SBA loans from First Home can be used for a variety of purposes and can accommodate a range of long-term financing needs. However, you’ll have to meet high requirements to qualify for an SBA loan from First Home Bank, and therefore, these loans are well-suited for established businesses with strong finances.

Loan Amount: $25,000 – $350,000

Est. Rates: Variable based on the Prime Rate

Terms: Up to 10 years

Fees: Will likely require guarantee and application fee

Time to Fund: Two to three weeks

Min. Credit Score: 650

Min. Annual Revenue: $100,000

Min. Time in Business: Two years


Best Lenders for Online Term Loans

OnDeck Capital

Pros
  • Simple and fast one-page application
  • No prepayment penalty
  • Prepayment discount on interest owed if you pay back the loan early
  • Builds business credit but doesn’t affect personal credit
Cons
  • Requires UCC-1 lien and personal guarantee
  • Can be expensive on higher end of interest rate range
  • Requires daily or weekly payments

OnDeck is an online lender that provides fast, short-term financing in amounts up to $500,000. Short-term loans from OnDeck are great for covering big, unexpected expenses and can be used for virtually any purpose. OnDeck’s loan application can be completed quickly and easily online and they can fund businesses in as little as one day. Plus, unlike many alternative lenders, OnDeck offers a prepayment discount on your interest-owed if you pay back your loan early.

Learn more about OnDeck.

Loan Amount: $5,000 to $500,000

Est. Rates: 9.99% to 99%

Terms: Three to 36 months

Fees: Origination fee of 0% to 4%

Time to Fund: As fast as one business day

Min. Credit Score: 600

Min. Annual Revenue: $250,000

Min. Time in Business: Three years

Funding Circle

Pros
  • Low interest rates and long terms for an online lender
  • Monthly payment schedule
  • No prepayment penalty; can save on interest by paying early
  • Can build business credit but won’t affect personal credit
  • No minimum revenue requirement
Cons
  • Requires blanket lien and personal guarantee
  • High eligibility requirements for an online lender
  • Origination fee can reach 6.99%
  • Not as fast to fund as some online lenders

Funding Circle is a peer-to-peer lending program that offers medium-term loans with affordable rates and a simple online application process. Funding Circle is a great option for established businesses who need longer-term financing for large purchases or expenses. In this way, Funding Circle is a faster, yet affordable, alternative to bank loans. Funding Circle term loans are also worthwhile for qualified business owners looking to consolidate existing business debt.

Learn more about Funding Circle.

Loan Amount: $25,000 – $500,000

Est. Rates: 11.67% to 36% APR

Terms: Six months to five years

Fees: Origination fee between 3.49% and 6.99% of approved loan amount

Time to Fund: As fast as two days

Min. Credit Score: 660

Min. Annual Revenue: No minimum

Min. Time in Business: Two years

BlueVine

Pros
  • Startup and newer businesses can qualify
  • No origination or other fees
  • No prepayment penalty
  • Once approved, can receive funds in as fast as a few hours
Cons
  • Requires UCC-1 lien and personal guarantee
  • Weekly payment schedule
  • Can be expensive on higher end of interest rate range

BlueVine is an online lender that offers short-term loans with a fast and fully digitized application and underwriting process. Term loans from BlueVine are worthwhile for business owners looking to fulfill a specific, short-term financing need—as well as for newer businesses. With their speed and flexible requirements, BlueVine short-term loans are also good for businesses who can’t qualify for traditional bank term loans.

Learn more about BlueVine.

Loan Amount: $5,000 to $250,000

Est. Rates: 4.8% to 51%

Terms: Six or 12 months

Fees: No origination or other fees

Time to Fund: Average of two to seven business days

Min. Credit Score: 600

Min. Annual Revenue: $100,000

Min. Time in Business: Six months


Best Lenders for Lines of Credit

PNC Bank

Pros
  • Revolving line of credit with minimum monthly payment requirements
  • Low interest rates
  • No fees
  • Can be used for any business purpose
  • Fast funding time, especially for a bank product
Cons
  • High credit score and time in business requirements
  • Personal guarantee required

One of the largest banks in the U.S., PNC Bank offers a number of business financing products, including a flexible and affordable unsecured line of credit. PNC Bank lines of credit are great for highly qualified business owners who are looking for financing to fill cash flow gaps, meet working capital needs, or have on-hand in case of emergencies. Although the application process may not be as intuitive as some online lenders, PNC can make you an offer as fast as one day—plus, you can make an initial draw on your credit line while completing the online checkout process with PNC.

Learn more about PNC Bank.

Loan Amount: $10,000 to $100,000

Est. Rates: Variable rate of Prime + 7.49% or 9.49%

Terms: Revolving line of credit that functions like a credit card

Fees: No origination, draw, or annual fees

Time to Fund: As fast as two days

Min. Credit Score: 680

Min. Annual Revenue: $100,000

Min. Time in Business: Three years

OnDeck

Pros
  • Revolving line of credit
  • No prepayment penalty
  • Builds business credit but doesn’t affect personal credit
  • Instant funding when you draw on your credit line for no extra fee
Cons
  • Weekly payment schedule
  • Personal guarantee required
  • Can be expensive on higher end of interest rate range

OnDeck is an online lender that offers short-term, flexible revolving lines of credit. OnDeck’s one-page application makes it quick and easy to apply for a line of credit and you can receive funding as fast as one business day. Short-term lines of credit from OnDeck are great for business owners who need to stabilize cash flow or cover other working capital needs. Plus, OnDeck offers instant funding on their lines of credit for no additional cost—meaning you can access your funds within minutes after drawing on your credit line.

Learn more about OnDeck lines of credit.

Loan Amount: $6,000 to $100,000

Est. Rates: 13.99% to 63% APR

Terms: 12 months

Fees: $20 monthly maintenance fee

Time to Fund: As fast as one business day

Min. Credit Score: 600

Min. Annual Revenue: $250,000

Min. Time in Business: Three years

Fundbox

Pros
  • Flexible requirements; great for newer and less-qualified businesses
  • Fundbox will waive remaining fees if you pay your balance in full before the term end
  • No origination, maintenance, or termination fees
  • Fast, automated process based on business checking account or accounting software information
Cons
  • Very short-terms with weekly payment schedule
  • Higher interest rates than other line of credit products
  • Credit line only available up to $100,000

Fundbox offers short-term lines of credit with one of the most automated application processes on the market. To apply for a line of credit through Fundbox, you simply have to sign up for an account and connect your business checking account or accounting software. Fundbox can give you a credit decision in minutes and fund you within one day. Fundbox lines of credit are great for business owners who need to cover a cash flow gap—especially those with lower credit scores or limited time in business.

Learn more about Fundbox.

Loan Amount: $1,000 to $100,000

Est. Rates: Starts at 4.66% of draw amount

Terms: 12 or 24 weeks

Fees: No additional fees

Time to Fund: As fast as one day

Min. Credit Score: 500

Min. Annual Revenue: $50,000

Min. Time in Business: Three months


Best Lenders for Equipment Financing

Balboa Capital

Pros
  • Flexible requirements and competitive terms
  • Offers a corporation-only guarantee option instead of a personal guarantee
  • Monthly or quarterly payments on equipment financing
Cons
  • Combination of equipment financing and leasing—you don’t own the equipment until it’s paid off
  • Requires hard credit pull
  • Up to 2% origination fee

Although Balboa Capital offers a few types of funding, they’re best-known for their equipment financing. Balboa can provide fast, long-term equipment financing with competitive rates. Plus, Balboa has flexible qualification requirements and a simple application process. Equipment financing from Balboa is a great option for businesses looking to purchase a piece of equipment—especially if you want to avoid signing a personal guarantee.

Learn more about Balboa Capital.

Loan Amount: Up to $250,000

Est. Rates: 4% to 25%

Terms: Two to six years

Fees: Origination fee of up to 2%

Time to Fund: As fast as three days

Min. Credit Score: 600

Min. Annual Revenue: $100,000

Min. Time in Business: One year


Best Lenders for Invoice Financing

Bluevine

Pros
  • Flexible credit and time in business requirements
  • Customers pay to your BlueVine account, allowing you to maintain that relationship
  • No minimum volume or termination fees; fund as many or as few invoices as you’d like
Cons
  • You’re responsible for paying BlueVine if customers don’t pay
  • If customers don’t pay on-time, weekly fees can get expensive

With invoice financing through BlueVine, you can receive an advance of up to 90% of the amount of your outstanding invoices. Applying for invoice financing with BlueVine is quick and easy—and BlueVine will evaluate the creditworthiness of your customers when considering your application. BlueVine invoice financing is great for B2B businesses who have capital tied up in outstanding invoices and are waiting longer than one week for their customers to pay. This product can help stabilize your cash flow—plus, if your customers pay on-time, this financing will be all the more affordable for you.

Learn more about BlueVine.

Loan Amount: Up to $5 million

Est. Rates: 0.25% to 1.7% per week

Terms: One to 13 weeks

Fees: No additional fees

Time to Fund: Average of two to seven business days

Min. Credit Score: 530

Min. Annual Revenue: $120,000

Min. Time in Business: Three months


Summary of Best Small Business Loans

Lender Best for Est. Interest Rates Min. Credit Score
Five Star Bar SBA loans Variable based on the Prime Rate 685
Celtic Bank SBA loans Variable based on the Prime Rate 640
First Home Bank SBA loans Variable based on the Prime Rate 650
OnDeck Online term loans 9.99% to 99% 600
Funding Circle Online term loans 11.67% to 36% APR 660
BlueVine Online term loans 4.8% to 51% 600
PNC Bank Lines of credit Variable rate of Prime + 7.49% or 9.49% 680
OnDeck Lines of credit 13.99% to 63% APR 600
Fundbox Lines of credit Starts at 4.66% of draw amount 500
Balboa Capital Equipment financing 4% to 25% 600
BlueVine Invoice financing 0.25% to 1.7% per week 530

Explore the Top Loan Products Available

SBA Loan

SBA loans are government-guaranteed term loans. The guarantee allows SBA lenders to offer low-interest rate loans to business owners who might not qualify for a bank loan.

Learn More

Maximum Loan Amount

$5K – $5M

Term

5 – 25 years

Interest Rates

Starting at 6%

Speed

As fast as 2 weeks

See if you qualify

Business Term Loan

Just like with a traditional bank loan, with a traditional term business loan, you are lent a lump sum amount upfront, which you pay back (along with fees) over a set period of time.

Learn More

Maximum Loan Amount

$25K to $500K

Term

1 – 5 years

Interest Rates

7 – 30%

Speed

As fast as 2 days

See if you qualify

Business Line of Credit

With a business line of credit, you can borrow up to a maximum credit limit and only pay interest on the amount of capital that you borrow from your credit line.

Learn More

Maximum Loan Amount

$10K to over $1M

Term

3 months to 2 years

Interest Rates

7% – 25%

Speed

Under 24 hours (in some cases)

See if you qualify

Invoice Financing

Invoice financing lets you sell invoices to a lender, who fronts you a portion of the invoice amount. The remaining percent (usually 20%) is held until the invoice is paid.

Learn More

Maximum Advance Amount

Up to 100% of invoice value

Term

Until the customer pays the invoice

Factor Fee

Approx. 3% + %/wk outstanding

Speed

As little as 1 day

See if you qualify

Startup Business Loan

Startup loans offer newer businesses capital to grow. Business credit cards, lines of credit, and equipment loans are great startup loans if you have strong personal credit.

Learn More

Maximum Loan Amount

$150K

Term

6 months to 4 years

Interest Rates

7.9 – 19.9%

Speed

As fast as 2 weeks

See if you qualify

Equipment Financing

With equipment financing, the lender will front you cash to help purchase the equipment outright. You then pay back the total amount lent, plus fees, for a set period of time.

Learn More

Maximum Loan Amount

Up to 100% of equipment value

Term

Expected life of equipment

Interest Rates

8 – 30%

Speed

As fast as 2 days

See if you qualify

Short-Term Business Loan

With a short-term small business loan, you are lent a set amount of capital upfront, which you quickly pay back (along with fees) over a short period of time.

Learn More

Maximum Loan Amount

$2.5K – $250K

Term

3 to 18 months

Interest Rates

Starting at 10%

Speed

As fast as 1 day

See if you qualify

Merchant Cash Advance

With merchant cash advances, a financing company fronts you a lump sum of capital, which you repay (plus their fee) with a set percentage of your daily credit card sales.

Learn More

Maximum Advance Amount

$2.5K – $250K

Term

Paid daily via your merchant account

Factor Fee

1.14 – 1.18

Time To Funding

As little as 2 days

See if you qualify

How to Get a Business Loan

You may feel overwhelmed by the process of actually applying and getting the business financing that’s right for you. After all, even though you probably have some idea of what type of financing you need and what you’re going to use it for, it’s not always simple to figure out how to get a business loan.

There are a variety of lenders you can work with—both traditional banks and alternative lenders—and each will offer unique products with different rates and terms, as well as have their own application process, with specific qualifications and requirements that need to be completed.

Using an Online Marketplace

Luckily, you can make this process simpler by working with an online marketplace, like Fundera. Instead of having to go lender by lender—evaluating each of them in terms of their products, rates, and application processes—with an online marketplace, you can access the top small business lenders in one place. In this way, you can easily compare your options and apply to the best lenders that will be able to offer you the funding you need.

Plus, if you’re unsure of what type of business loan is right for your business, or have questions about qualifications, individual applications, or timelines, you can work with a loan specialist, for free. This loan specialist will be able to walk you through your eligibility, loan options, and offers—once you’ve gone through the application process.

In fact, with an online marketplace, you can submit a few pieces of basic information and in just a few minutes see what small business loan options you might qualify for—without paying any fees or impacting your credit score. After receiving these options, you’ll then be able to make a decision about what will be best for your business and start the process of actually applying for a loan.

Business Loan Requirements

Ultimately, although the business loan requirements, as well as the application process, will largely be specific to the lender and the product you’re applying for, there are some important pieces of information you can keep in mind before you get started.

First, in order to qualify for a small business loan, there are a few requirements that lenders will almost always look at—time in business, personal credit score, and annual revenue. Generally, the longer you’ve been in business, the stronger your credit score, and the higher your annual revenue, the more likely you are to qualify for a loan—and one with the most desirable rates and terms.

Overall, if you have at least two years in business, a personal credit score of 700 or above, and strong financials, you’ll want to see if you can qualify for a traditional bank loan, which will offer the best rates and terms. If you can’t qualify for a bank loan, then you’ll want to look into other options—SBA loans, online term loans, business lines of credit, etc.

However, even if you don’t have the most ideal qualifications that don’t mean you won’t be able to get a business loan. As an example, a business owner with lower qualifications may still qualify for asset-based financing, as lenders are more likely to consider your collateral over the more traditional requirements.

Business Loan Application Process

With this in mind, to actually apply for a business loan, you’ll need to provide a variety of business and personal documents—the specifics of which, again, will depend on the lender. On the whole, however, you can expect to provide:

  • Basic business information such as a loan purpose statement, business tax ID number, and business plan
  • Business financial information including your credit score, financial statements, and tax returns
  • Personal information such as your ID, credit score, and personal tax returns

Again, if you work with an online loan marketplace like Fundera, you’ll be able to take advantage of the expertise of a loan specialist who can help you through this process—gathering the required documents, completing the application, and reviewing the offers you receive—to choose the one that’s best for your business. You’ll want to compare multiple products and even multiple offers to ensure that you’re getting the best small business loan possible to meet your financing needs.

How Fundera Makes Money

At this point, you might be wondering: How does an online marketplace like Fundera make money?

At Fundera, we only make money when you get the financial product you need. Essentially, this means that we receive a referral fee from the financial provider once you’re approved and have taken the product. This being said, as a partner to your business, we’ll never hesitate to recommend you toward a better solution, even if we don’t have a relationship with the finance provider. Ultimately, Fundera first and foremost exists to help small business owners make smarter financial decisions—whether that’s getting you the best offer available in our marketplace, or pointing you in the right direction for a better alternative.

You can learn more about Fundera’s editorial independence and how we make money here. If you have any questions about our editorial process, please don’t hesitate to contact us at [email protected]

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