Best Small Business Loans of 2021

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Being a small business owner can be tough. You have a staff to manage and operations to run, all while chasing up money from customers and ensuring cash-flow is positive. Sometimes a loan is necessary to make a big investment, or even to stay afloat.

If this sounds familiar, you’ll be pleased to know that there are more ways of obtaining funding for small businesses than ever before.

It’s not just big banks and credit unions you can borrow from anywhere – there are a wide range of online lenders, peer-to-peer marketplaces, and even payment processors that are competing for your trust.

Due to the reasonable stability of the current economy, it’s also a great time to obtain a loan at a reasonable rate.

As already touched on, there is a huge variety of small business loans and loan providers out there.

The right one for you depends on how good your credit score is and what you want to use your loan for.

We’ve broken the best small business loans down into a few categories and selected the best lenders for each one.

What are the best small business loans?

Here are the best places to get a small business loan in 2021:

If you want to get an idea of what’s available on the market for small business loans, then a lending marketplace could be a great place to start.

You can compare different providers on one platform, and they’ll help to match you with the lenders who will be most likely to approve your application.


Lendio is a loan matchmaker that can connect you with various loan providers at no extra charge.

They have more than 75 providers on their database and, so far, have managed to connect businesses to $1.4 billion of capital.

You can choose between a line of credit, equipment financing loan, term loan, startup loan, and even a credit card. This means that, even if you decide conventional loans aren’t right for you, you could still find a suitable loan provider on Lendio.

Although the APR and loan values depend on the type of loan you opt for, the APR ranges from 6.5% to 40.00%, and the loan values range from $5,000 to $5 million.


  • Minimum credit score: 550
  • Minimum annual revenue: $120,000


  • Receive capital within 24 hours
  • No extra charge


  • Some loans have high rates
  • Prepayment penalties vary

Funding Circle

Funding Circle is a peer-to-peer (P2P) lender, which means money is provided directly from private investors hoping to make a return from the loans.

It’s ideally suited to established businesses who want extra funds for refinancing debt or carrying out an expansion. Common reasons for borrowing include refurbishments, hiring more staff, and buying new equipment.

You can borrow between $25,000 and $500,000 and the term can be as low as six months or up to five years.

A big advantage is the chance to receive support from a loan specialist throughout the application process. Furthermore, U.S. News & World Report named Funding Circle the ‘Best Small Business Loan for Low APR’ in September 2019, which is a testament to their reliability.


  • Minimum credit score: 620
  • Minimum time in business: two years
  • No bankruptcies within the past seven years
  • Business lien and personal guarantee


  • Receive the funds within three days (could be as soon as 24 hours)
  • No minimal annual revenue
  • Flexible loan terms


  • Need a business lien and personal guarantee
  • Not well-suited to newer businesses
  • Higher Origination Fee (3.49% to 6.99%)


As America’s largest peer-to-peer lender, you can expect LendingClub to have you covered. Although they specialize in personal loans, they also have small business loans available.

You can borrow up to $500,000 at an APR between 5.99% and 29.99%. You’ll need to pay an origination fee between 1.99% and 8.99% for one to five-year terms. There are no prepayment penalties.


  • Minimum credit score: 640
  • Minimum annual sales: $50,000
  • Minimum time in business: one year


  • Competitive rates
  • No prepayment fees


  • Origination fee
  • Has previously been in trouble for ‘deceptive’ lending practices


SmartBiz is a loan marketplace that specializes in SBA loans; they claim to be the top provider in the category.

They’re not a direct lender but instead an intermediary, which means you can increase your likelihood of approval by being matched with the right loans provider.

You can borrow from $30,000 right up to an impressive $5 million at an APR from 4.75% to 7.00%. The terms range from 10 to 25 years.

Like most SBA loans, they offer a large loan amount for a relatively low rate, making the loans attractive but potentially difficult to obtain – you’ll need a credit score of at least 650, a business lien, and a personal guarantee. It’s also best to be an established business, with tax returns for the past three years and a good financial history.

You can choose an SBA loan for a specific purpose, like working capital and debt refinancing loans ($30,000 to $350,000) and commercial real estate loans ($500,000 to $5 million).

There are also conventional bank term loans ($30,000 to $200,000), although it might be best to choose a provider more specialized in this area.


  • Minimum credit score: 650
  • Minimum time in business: two years
  • Minimum annual revenue: $50,000
  • No bankruptcies or foreclosures in the past three years


  • Find out if you qualify within minutes
  • Get funds within a week
  • Low APR


  • Strict requirements
  • For specific industries only
  • Must use your funds for specific purposes

Live Oak Bank

Live Oak Bank has Preferred Lender (PLP) status, which means they can offer the full range of SBA products. You can thus receive your money quickly and with great service.

They work with brokers, intermediaries, and individuals to deliver SBA loan options. These can be used for business acquisitions, business expansions, and refinancing. You can borrow from $75,000 up to $7 million and loan terms go up to three years.

Live Oak Bank also includes tailored information and loans for a variety of industries, from pharmacies to auto dealerships. Unfortunately, the loans aren’t applicable to every industry.


  • Minimum credit score: 650
  • Cash flow to support the debt
  • Minimum of three years of personal and business tax returns
  • No outstanding tax liens
  • No bankruptcies or foreclosures


  • Get money faster than you would with a bank
  • Relatively low credit requirement
  • Low APR


  • Can’t receive a loan for every industry
  • Requirements are strict
  • Higher Loan amounts

Credibility Capital

With a Better Business Bureau rating of A+, Credibility Capital is exactly what it claims to be: credible.

Their loans are funded by banks, which means federal or state-chartered banks hold the funds, and the cost of capital is lower.

You can borrow from $25,000 to $350,000 at an APR starting at 8.00% for 1-, 2-, or 3-year terms. There are no fees for prepayment or application, but you’ll have to pay for an origination fee from 3 to 5%.

Unfortunately, the loans are not available to those in Nevada, North Dakota, South Dakota, or Vermont.


  • Minimum credit score: 680
  • Minimum time in business: 24 months
  • No commercial or personal bankruptcies within the last five years
  • Minimum annual revenue: $250,000


  • Can receive funding within three days
  • Prepayment is possible


  • Origination fees
  • High minimum revenue


OnDeck gives short-term funding to businesses in a variety of forms, and it is best suited for companies who have a credit score that isn’t strong but isn’t poor enough for a bad credit loan either.

Their term loans are between $5,000 and $500,000, with rates starting at 11.89%, but only the most established get offered the lowest rates. All rates are fixed, so although there are no prepayment fees, you’ll end up being penalized if you do repay early. You’ll also need to pay an origination fee.

Unlike most lenders, which require monthly repayments, OnDeck needs payments on a daily or weekly basis, which can be inconvenient for some but is well-suited to those who want flexibility.

OnDeck also offers lines of credit; the credit score requirement is the same, and the APR starts at 10.09%.


  • Minimum credit score: 600
  • Minimum time in business: 1 year
  • Minimum annual revenue: $100,000
  • Business lien and personal guarantee
  • No bankruptcies within the past two years


  • Can receive funding within 24 hours
  • Low credit score requirement
  • Quick process


  • Daily and weekly repayments
  • Origination fee
  • Higher APR rates


Fundation is a direct lender aimed towards small- and medium-sized businesses. It offers term loans for business expansion, equipment, and capital improvements. The loans are available in every state except for Nevada.

You can borrow up to $500,000 for a term of up to four years. The APR goes from 7.99% to 29.99%, including an origination fee. You have to pay fees twice per month.

When assessing your interest rate, the following factors will be taken into account: business stability, credit history, financial metrics, cash flow, and debt.

Fundation also offers line up credit; you can borrow up to $150,000, which needs to be paid once per month.


  • Minimum credit score: 660
  • Minimum time in business: one year
  • Minimum annual revenue: $100,000
  • Personal guarantee and business lien


  • No prepayment penalties
  • Relatively large amount


  • Lengthy application process
  • Not suitable for sole proprietors or new businesses


Kabbage gives revolving lines of credits, which means you can borrow in increments up to a pre-approved limit while making payments on a regular basis.

You’ll be given a ‘Kabbage Card,’ similar to a credit card, and can withdraw funds either by using this, using the app, or using the computer. It’s another company given an A+ rating by the Better Business Bureau.

You can take a revolving credit line of up to $250,000 for a term length of 6, 12, or 18 months. There are no origination fees or prepayment penalties.

The requirements are fairly holistic and require less paperwork before obtaining funding. The main advantage is the convenience.


  • Minimum credit score: 560
  • Minimum time in business: one year
  • Minimum annual revenue: $50,000


  • Suitable for bad credit
  • Can be approved within ten minutes
  • No fees


  • High rates
  • Fixed-fee structure so early repayment doesn’t save interest
  • Offering limited to the line of credit only


StreetShares is a lender made by veterans in 2013 with the mission of starting a funding option independent from banks.

With almost 70,000 members, they’re a slightly smaller company than others on the list, but that’s nothing to balk at.

The Patriot Express Line of Credit allows you to borrow between $5,000 and $250,000.

The credit isn’t available for those from the following states: North Dakota, South Dakota, Rhode Island, Montana, and Nevada.

They also offer terms loans, merchant cash advances, equipment financing, and SBA loans. Through the term loan, you can borrow from $2,000 up to $250,000 at an APR of 9.14% to 39.99%. The minimum credit score is still 600, but the minimum annual revenue goes down to $75,000.


  • Minimum credit score: 600
  • Minimum time in business: one year
  • Minimum annual revenue: $75,000
  • No bankruptcies in the past three years


  • Could receive funding on the same day
  • Low credit score requirement


  • High rates
  • Late payment/Failed payment fees


Fundbox only offers invoice financing. You’ll continue to work with customers directly, but you’ll no longer have to wait to get paid.

You’ll pay a merchant fee between 1% and 3.3%, terms are 15-90 days, and you can borrow up to $100,000.

Instead of a credit check, you can connect your accounting software to Fundbox for approval. Therefore, you must have an account with one of the following: QuickBooks; FreshBooks; Harvest; Clio; InvoiceASAP; Sage One; Kashoo, or Jobber.

Fundbox can also be used for lines of credit, which require a minimum credit score of 500. It is available for companies that have been in business for just three months.


  • Minimum credit score: 500
  • Minimum annual revenue: $50,000


  • No paperwork needed
  • Suitable for those with low credit
  • Fast application and funding


  • High rates
  • Need to use finance software
  • Offers less than BlueVine


Bluevine offers both invoice factoring and invoice financing but focuses on the latter.

Once you get approved, you need to upload invoices onto your Bluevine dashboard; you’ll receive up to 90% of the money you’re owed for the invoices upfront, and the rest once you’ve received payment for the invoices.

The APR stats at 0.25% per week, and you can get a factoring line up to $5 million.

Bluevine also offers lines of credit and term loans. Their term loan is ideal for newer businesses that want short-term funding. There’s a credit score requirement of 600, which is lower than for invoice factoring, and you only need to have been in business for six months.

The credit score for lines of credit is 620, and the APR starts at 4.8%.


  • Minimum credit score: 530
  • Minimum time in business: three months
  • Minimum annual revenue: $120,000


  • Get approved within 24 hours
  • You can finance larger invoices
  • Borrow more money


  • Need to invoice on net terms
  • Need customers to pay bills on time
  • Not available in all states


CanCapital is a lender suitable for bad credit borrowers with impressive credentials. They serve more than 80,000 businesses with funds worth more than $7 billion and have an A+ rating with the Better Business Bureau.

CanCapital offers merchant cash advance, which provides working capital by buying the future payment card receivables of a company. This is a type of credit that’s good for businesses with bad or no credit.

This may not be a good option when compared to a different type of loan, but for firms with little to no options, it’s one of the best places to get a merchant cash advance.

You can borrow from $2,500 to $250,000 for a term of 6-18 months, including an origination fee of at least 3%.


  • Minimum credit score: 640
  • Minimum time in business: six months
  • Minimum annual revenue: $150,000


  • Accessible to all businesses
  • Minimal paperwork
  • Funds can be transferred within a day


  • High rates
  • Comparably short repayment terms
  • Lack of transparency with fees/apr


The offering of QuarterSpot is similar to a merchant cash advance, as it’s well-suited to those with bad credit and has higher factor rates.

However, it offers a genuine loan, which means it can help to boost your credit score. They also have an A+ rating from the Better Business Bureau.

They lend up to $250,000 and you can receive your funding quickly and face no penalties for early payoff.


  • Minimum credit score: 550
  • Minimum time in business: two years
  • Minimum annual revenue: $200,000
  • Minimum average daily account balance: $2,000


  • Suitable for bad credit borrowers
  • No prepayment fees or penalties
  • Get funding within 24 hours


  • High rates
  • High annual revenue needed
  • Higher origination fee


Lendr is another provider that provides merchant cash advances. It admittedly doesn’t have the best terms on offer but could be an option to consider if you can’t get accepted elsewhere.

They offer loans from $5,000 to $500,000 on terms of 4-14 months.

However, they’re only available for the following industries: catering, construction, transportation, auto body repair shops, and restaurants.


  • Minimum credit score: 520
  • Minimum time in business: one year
  • Minimum annual revenue: $10,000


  • Funds those with poor credit scores
  • Receive same or next day funding
  • Low minimum annual revenue


  • High rates
  • Prepayment fees
  • No savings in prepayment

National Funding

National Funding has both an A+ rating from the Better Business Bureau and high approval rates for its loans.

You can loan from $5,000 up to $150,000 for equipment on two- to five-year terms, and there are flexible payment options.

You can work with a personal loan specialist to customize a solution for your business, and even work to help you gain quick approval for whichever type of equipment you need to grow your business.

National Funding also offers small business loans from $5,000 to $500,000.


  • Minimum credit score: 575
  • Minimum time in business: six months
  • Equipment quote from a vendor


  • Receive funding within 24 hours
  • Personal service


  • Reasonably high rates
  • Slower funding process

Currency Finance

Currency is a FinTech company that specializes in equipment loans and working capital loans.

Even though the loan is designed for equipment, you can use a small percentage of the loan towards services and soft costs, as long as they’re directly related to the equipment.

CurrencyFinance is a straightforward scheme that allows you to borrow up to $500,000 for a term from 24 up to 72 months.


  • Minimum credit score: 585
  • Minimum annual revenue: $75,000
  • Minimum time in business: 6 months
  • Business lien and personal guarantee


  • No prepayment
  • Suitable for new companies


  • Sometimes have to pay a prepayment fee
  • Moderate funding time

Square Capital

Square often gives its customers the chance to take out a loan, mostly merchant cash advances. Even if you’re not a current customer, you can sign up, especially for a loan.

Since the loan is designed for customers, you can have the payments deducted from your Square card automatically, which is convenient and the main draw. Another advantage for current customers is that your history with Square partly determines your eligibility.

You can get loans from $1,000 to $100,000 and  terms are from 3 to 18 months.


  • Minimum credit score: 350


  • Loan deposited within a day
  • Automatic deductions
  • No prepayment fees


  • Harder to get approved if you’re not a current Square user
  • Higher APRs
  • Poor customer support

PayPal Working Capital

PayPal Working Capital also offers merchant cash advances. You can use the loan for working capital, product or service expansion, or equipment purchase.

You can loan up to $125,000.  The repayment schedule is relatively flexible: you can choose the cash advance amount and repayment percentage that suits your needs.

The maximum amount you can receive depends on your PayPal activity, so the loan is exclusively for PayPal customers.


  • Minimum credit score: 560
  • Minimum annual revenue: $15,000
  • Minimum time in business: 12 months


  • Lenient requirements
  • Can receive funding with minutes


  • Only available to PayPal sellers
  • High rates

Stripe Capital

A relatively new but rapidly expanding payment processor, Stripe also offers business loans.

Again, convenience is a significant factor. Stripe automatically accounts for your sales and deducts a fixed percentage from this to determine your payments.

Like the other processors, eligibility is also determined by your history with Stripe rather than external factors.

You can borrow from $10,000 to $20,000. You’ll pay back in one flat fee, and there are no late fees.


  • Good financial history on Stripe


  • Automated repayments
  • Receive funding quickly


  • High APR
  • No large loan options

Best Small Business Loan Alternatives

As you can see, most small business loans are aimed at companies that have at least a year of experience and substantial revenue – this can exclude younger companies from traditional financing options.

However, don’t panic if you find yourself in this category – there are still some options.

Personal loans look only at your personal credit score rather than the financial history of your company, so this can be easier to obtain for newer companies.


Prosper offers a special type of personal loan targeted at businesses, which makes it an ideal option for newer businesses that don’t have a track record. Rather than being a business loan, they offer personal loans for business use.

You can borrow between $2,000 and $40,000 at an APR from 7.95% to 35.99%.

There’s an origination fee between 2.41% and 5.00%.


A further option is a startup loan, like those offered by Accion. Its loans are specially designed for entrepreneurs with big ideas who fail to qualify for traditional finance methods, with the requirement that you submit a business plan with a 12-month cash flow projection.

In theory, you could receive up to $1 million, but you’re more likely to receive around $15,000.


Kiva is a not-for-profit organization that offers microloans: loans of smaller value. Because it’s a charitable organization, the loans are funded via crowdfunding and donations, and the interest rate is just 0%.

The microloans are mostly targeted towards businesses in developing countries, but anybody can apply – however, you’ll need to get family and friends to fund you before you’re allowed to crowdfund to a larger audience.

Business Credit Card

Finally, another option is a business credit card because they’re easier to obtain and will only consider your personal credit score.

However, this can be risky since interest rates are generally higher than other types of loans.

Types of Loans

SBA Loans

SBA loans are backed by the Small Business Administration and thus the government, so only a select group of lending institutions can offer them.

These loans have the advantages of a low-interest rate (11% APR or less) and long terms, but they can be difficult and lengthy to obtain approval for – you’ll need a good personal credit score (690 or more) and a good financial history for your business.

However, if you’re successful, you can borrow more money than you may be able to obtain from other types of loans, which makes them ideal for projects such as substantial investments, refinancing debt, or buying a business.

Term Loans

Term loans work like conventional loans: you repay interest over a certain term or length of time.

They can be either short-term (six to twelve months) or long-term (up to ten years). Term loans are, therefore, ideal for large one-time investments.

Business Lines of Credit

Business lines of credit let you take out a sum of money that you won’t be charged interest on until you actually use the money.

In many ways, they work similarly to credit cards. That makes business lines of credit best-suited for managing cash flow and unexpected expenses rather than big investments.

Invoice-Based Financing and Factoring

Invoice-based loans give you money based on the unpaid invoices you’re owed. Invoice factoring involves selling invoices to the factoring company, while invoice financing means using invoices as a basis for a loan.

This is another type of loan which is great for managing cash flow.

Equipment Financing

As you’d expect, equipment financing loans are specifically designed for funding equipment; it’s essentially a type of a term loan.

Although a conventional term loan can also be used for financing equipment, some loans specifically for this purpose offer extra help in obtaining leases, which might be useful to some business owners.

Payment Processor Loans

Obtaining a loan from a payment processor such as those named below doesn’t make sense for most people since you’ll face a high APR.

However, if you already use the service and find that you get offered a loan, you could find that’s it’s convenient for you.


How do you qualify for a small business loan?

To qualify for a small business loan, you’ll need a good personal credit score, to have operated as a company for at least a year, and a good financing history for the business.

However, there’s more to the process of obtaining a small business loan than just ticking a few easy boxes. You’ll need to jump through more hoops to be able to get a loan; the process can be long, tedious, and full of inconvenience.

To give yourself the best chance possible, make sure your personal credit is up to par– especially if you don’t have much of a track record for your business. Lenders are more likely to trust you if your personal credit record is impressive.

There’s no quick fix to improve your credit score, but you can start by using a free tool like Credit Sesame to find out what your score is and receive tips on improving.

Unlike personal loans, lenders of business loans want to have a clear understanding of how you’ll be using the funding. Therefore, it’s in your best interest to have some kind of business plan and the evidence to support the figures, such as your bank statements. Many companies want to know about your revenue and cash flow – so you should be able to prove them.

What credit score is needed for a small business loan?

The exact credit score you’ll need depends on the loan provider you choose. Most lenders prefer a credit score of close to 700 for a decent rate. There are companies on this list asking for credit scores that start from just 500, but this means you’ll be hit with an extortionate APR.

Remember, your business also needs a good credit history, including a good annual revenue and length in business, as well as cash flow and ability to repay debt. You may be asked for documents like tax returns and bank statements as proof.

Are small business loans hard to get?

There’s no getting around the fact that small business loans are hard to obtain, especially compared to other types of loans, such as credit cards or personal loans.

Yet some are harder to be approved for than others. Since SBA loans are more selective and have stricter requirements, they’re generally difficult to obtain. Likewise, loans from big banks are also hard to get: it’s estimated that only one in five businesses that apply are approved.

In contrast, loans with higher rates – such as bad credit loans or payment processor loans – are easier.

What is the easiest business loan to get?

A merchant cash advance, although not technically a loan, is the easiest business loan to get. Unfortunately, it’s also the type of loan that is most likely to come with unfair terms.

Poor credit specialists are also more likely to give you a loan – these include QuarterPoint, CanCapital, and Lendr. Once again, they come with high APRs.

Finally, it’s also very easy to obtain a loan from a payment processor if you’re an existing customer with a good history of using the platform.

Which bank is best for small business loans?

Traditional banks are no longer the only – or the best – source for business loans. Nonetheless, if you can get approved, you’ll be able to borrow a larger amount of money for a lower rate and could also give you a longer repayment schedule.

Live Oak Bank is one of the best bank providers for small business loans – it has Preferred Lender status, and you can borrow up to $7 million for an APR of just 5.50%. This is a far better deal than a lot of online lenders.

However, bear in mind that the application process with a bank is often longer and more complicated, and there may be more collateral involved.

What Small Business Funding is For You?

Now could be a great time to get a business loan, and there are certainly lots of choices, but there are still no guarantees of your gaining approval.

There’s no doubt that applying for a business loan is going to be a lengthy process, and you may face rejection.

If you’re struggling to get accepted or finding the application process overwhelming, consider enlisting professional help; for instance, a CPA (certified public accountant) to sort out your finances.

Nonetheless, after getting your finances in order and figuring out which lender is best suited for you, there’s no reason you shouldn’t be able to obtain a good small business loan with some persistence.

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