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Best Small Business Loans for November 2024

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Holly Johnson
Holly Johnson
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Holly Johnson is an insurance expert, award-winning writer, and mother of two who is obsessed with frugality, budgeting, and travel.
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Updated November 01, 2024
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Matthew M Klammer
Matthew Klammer
Fact checked by Matthew M Klammer
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With practical experience running his own IT business and an education in the liberal arts, Matthew Klammer had become well-accustomed to the difficulties of research. From providing POS systems to small tourist shops to data security and account management Matthew has provided business solutions to many individuals.
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Small business loans are an integral component of the business world. Business owners rely on them to invest in new equipment or supplies, cover payroll, or manage cash flow. With a small business loan, business owners and entrepreneurs can access a lump sum of cash or a line of credit, which they can use to remain operational and continue growing their business for years to come.

The best small business loans have convenient application and funding processes, with competitive fees and flexible terms. Investopedia compared more than 20 of the top small business loan lenders based on their loan products, rates, fees, eligibility requirements, and overall transparency, among other factors. We narrowed down the list to the following five lenders.

Lendio is our top choice when it comes to the best small business loans for borrowers. Lendio won out because this marketplace gives you a larger pool of lenders for small businesses from which to choose.

Best Small Business Loans for October 2024

Best Lender Comparison Site : Lendio

Lendio

 Lendio
Key Specs
  • Mobile app: Yes
  • Best perks:  Wide Lender Network and 24-hour Funding
  • Loan/LOC amount: $1,000 -$5M
  • Minimum credit score: Varies by lender
Why We Chose It

We chose Lendio as one of the best loan comparison sites based on the fact that it lets you compare loan options from more than 75 lenders in one place, more than other marketplace sites. You can also have your loan funded in as little as 24 hours, which can be a major boon for business owners who need cash fast.

Pros & Cons
Pros

  • Compare loan offers from more than 75 lenders

  • Funding in as little as 24 hours

  • Offers small business loans, SBA loans, and business lines of credit

Cons

  • Lendio does not lend money directly.

  • Eligibility requirements vary, depending on the lender.

Overview

Lendio is a loan marketplace, so it won't lend you funds directly. We believe it shines in this category since it lets you compare loan offers with more than 75 lenders in the small business space. Having lenders compete for your business is the best way to ensure you get a small business loan with the best rate and terms.

Lendio was founded in 2011, yet it has grown dramatically since then. The site claims to have funded over 400,000 small business loans worth more than $15 billion, and they don't plan to stop anytime soon.

The marketplace lets you borrow anywhere between $1,000 and $5 million, depending on your business’s financial stability. Repayment periods vary by product, ranging from a few months to decades. Interest rates also depend on factors like loan term and collateral, with secured loans starting as low as 3% in November 2024, while others may reach double digits. Lendio has just a 15-minute application process, and they also offer multiple fast business loan options, with decisions available within the same business day.

Best Revolving Line of Credit : Fundbox

Fundbox

 Fundbox
Key Specs
  • Mobile app: Yes
  • Best perk: Decision in minutes
  • Loan/LOC amount: Up to $150,000
  • Minimum credit score: 600
Why We Chose It

Fundbox focuses on offering lines of credit for business owners, and they make it possible to get prequalified online without a hard inquiry on your credit report. Its focus on business lines of credit makes Fundbox an expert on this particular type of small business funding. It offers decisions in minutes as well as funding as soon as the next business day.

Pros & Cons
Pros

  • Get prequalified online without a hard credit inquiry

  • Get a decision in minutes

  • Only borrow what you need, unlike a lump sum small business loan

Cons

  • Lines of credit are only available for up to $150,000.

Overview

We chose Fundbox as the lender offering the best revolving line of credit, which is a loan amount that you can reborrow, even if you pay the total balance. Fundbox was founded in 2013, and the company uses technology to facilitate its B2B lines of credit to help small businesses achieve significant success.

Lines of credit from Fundbox are only available in amounts up to $150,000, but you can get prequalified online without completing a full loan application. Once you apply, you can get a credit decision within minutes, and you’re under no obligation to accept the loan funds. 

Because Fundbox focuses on lines of credit, you get the chance to borrow only as much money as you need. You can transfer funds from your line of credit to your business checking account as soon as the next business day. This provider gives you the option to save money by paying off your balances early and ahead of schedule without any prepayment fees.

Fundbox lets you see the fees for your line of credit upfront, and it'll automatically debit your bank account to pay your amount due, so you won’t have to think about it. You get the option to repay your line of credit over 12 or 24 weeks.

Best for Microloans : Kiva

Kiva

 Kiva
Key Specs
  • Mobile app: Yes
  • Best perk: 0% interest
  • Loan/LOC amount: Up to $15,000
  • Minimum credit score: Not required
Why We Chose It

Kiva is the best option for small business owners who only need to borrow a small amount of money. Its microloans currently come with a 0% interest rate, and you can borrow up to $15,000.

Pros & Cons
Pros

  • Borrow money with no interest

  • Market your product to a growing community of Kiva lenders

  • Repay your loan for up to 36 months

Cons

  • You can only borrow up to $15,000 with Kiva

  • Can take 30 days or longer for your loan to be funded

Overview

We chose this lender as the best option for microloans based on the fact that you can borrow money at an annual percentage rate (APR) of 0% and repay it over three full years. Founded in 2005, Kiva aims to help underserved community members qualify for the small business funding they need to get their dreams off the ground. As of December 2023, asa many as 2.2 million Kiva lenders have funded more than $2 billion in loans to more than five million borrowers in 95 countries around the globe.

Kiva is not a bank. Rather, it's a peer-to-peer lending platform. Kiva loans are geared toward disadvantaged entrepreneurs, so investors who lend money through the platform get the chance to help people around the world.

In terms of their loan product, Kiva only lets you borrow up to $15,000. You can apply online in 20 to 30 minutes and earn the ability to advertise your funding project on their marketplace within 30 days; you get the chance to repay your loan over 36 months.

Kiva also lists easy requirements to qualify, including living in the U.S. and being at least 18 years old. To qualify for a Kiva loan, you also have to agree to use your loan for business purposes only.

Best for SBA Loans : Fundera

Fundera

 Fundera
Key Specs
  • Mobile app: No
  • Best perk: Access to SBA loans and range of funding sources
  • Loan/LOC amount: Up to $5.5 million for an SBA loan
  • Minimum credit score: Varies by lender
Why We Chose It

We chose Fundera as the best option for Small Business Administration (SBA) loans because it offers the most SBA options, including loans through the popular SBA 7(a) loan program. You can apply for an SBA loan directly on Fundera with your loan funded through a variety of top SBA lenders.

Pros & Cons
Pros

  • Offers wide range of business loans and lines of credit, including SBA-approved loans

  • Compare loan options through multiple lenders in one place

  • Gauge your ability to qualify without a hard inquiry on your credit report

Cons

  • Is a marketplace rather than a direct lender

  • Credit score of at least 620 required

  • Collateral required for some SBA loans and loan amounts

Overview

Fundera is an excellent option for consumers who want to qualify for an SBA loan, mostly because it lets you fill out a single application and compare multiple SBA loan options in one place.

Founded in 2013, Fundera is a loan marketplace instead of a direct lender. This means the company connects small business owners with the best small business loans and lines of credit on the market today, but it does not lend money itself.

Because Fundera is a marketplace, it can offer nearly any type of business loan or line of credit available today. This includes loans through the SBA, which tend to come with flexible repayment terms and affordable interest rates.

Loan amounts and repayment terms vary, but it’s possible to qualify for an SBA loan in amounts up to $5.5 million. You may also be able to repay your loan for up to 25 years, although it can take two weeks to get your loan funded. Note that SBA loans may require collateral, and that’s especially true for larger loan amounts.

Best for Same-Day Funding : OnDeck

OnDeck

 OnDeck
Key Specs
  • Mobile app: Yes
  • Best perk: Same Day Funding and Transparency.
  • Loan/LOC amount: Up to $250,000 for a loan; up to $100,000 for a line of credit
  • Minimum credit score: 625
Why We Chose It

We chose OnDeck because it offers small business loans with funding as soon as the same business day. This can be crucial for business owners who need fast access to cash to keep up with business expenses or pay for an important piece of equipment right away.

Pros & Cons
Pros

  • Funding available as soon as the same business day

  • Lends up to $250,000 for small business loans and up to $100,000 for lines of credit

  • Transparent about loan details and eligibility requirements.

Cons

  • Minimum personal credit score of 600 required

  • Applicants need at least one year in business with a minimum of $100,000 in annual business revenue.

Overview

Since its founding in 2007, OnDeck has grown to become one of the most prominent small business lenders offering capital on the market today. We chose OnDeck as best for same-day funding due to its easy online application process and rapid approval and fulfillment of your small business loan.

OnDeck makes it easy to qualify for a line of credit with a maximum of $100,000. Their term loans range from $5,000 to $250,000. Repayment terms on small business loans are available for up to 24 months, and you will benefit from transparent pricing and no prepayment penalties.

You can repay one of OnDeck's lines of credit on flexible terms over 12, 18 or 24 months, plus you get the benefit of borrowing only what you need. Either option can work for small business owners who need access to capital, and both types of funding let you apply and receive a decision within the day.

OnDeck lists some basic requirements to qualify for a business loan, which include a FICO score of 625–675. You also need to be in business for at least one year and have at least $100,000–$250,000 in annual business revenue to qualify.

The Bottom Line

A small business loan or line of credit can help you grow your business without having to tap into your own capital. There are many options available, including small business lenders, loan marketplaces, and even the Small Business Administration (SBA), which can guarantee your loan with an approved lender.

Lendio is our top choice because this marketplace connects you with a wide range of lenders. If you're looking for a microloan, consider applying through Kiva. Fundbox has the best options for revolving credit lines while Fundera tops the list of SBA loan providers. But if you're looking for same-day funding, OnDeck is your best bet.

Compare Small Business Loans

Lender  Mobile App Best Perk Loan/LOC Amount Minimum Credit Score
Lendio Best Lender Comparison Site Yes 24-hour funding $25,000-$500,000 Varies by lender
Fundbox Best Revolving Line of Credit Yes Decision in minutes Up to $150,000 600
Kiva Best for Microloans Yes Zero percent interest Up to $15,000 Not required
Fundera Best for SBA Loans No Multiple offers Up to $5.5 million Varies by lender
OnDeck Best for Same-Day Funding Yes Same-day funding Up to $250,000 for a loan; up to $100,000 for a line of credit 625

Guide to Choosing Small Business Loans

What Is a Small Business Loan and How Do They Work?

A small business loan is capital borrowed by a small business owner from a lender to pay for business expenses. Funding can be used to pay for startup costs, real estate, equipment, materials, and other expenses. Business owners can apply for and borrow capital from banks, credit unions, peer-to-peer lenders, and other financing companies.

Small business loans work just like personal loans. Once the loan is approved and funded, the small business owner is required to make regular payments with interest (at either a fixed or variable rate) over the life of the loan until it is paid in full. Loans may be secured with collateral or unsecured, usually with a personal guarantee from the business owner.

Types of Small Business Loans

  • SBA loans: These loans are guaranteed by the SBA. Since they are backed by the agency, SBA loans tend to come with better rates and terms than other types of loans. While loans are guaranteed by the agency, they are funded by SBA-approved lenders. Your business must qualify to be approved.
  • Business lines of credit: These options are revolving credit lines that allow you to borrow up to a certain credit limit. In most cases, you are only required to pay interest on the balance of your line of credit rather than a lump sum for a term loan. Because the credit limit is revolving, you can continue to access as much money as you want up to the limit as long as you keep up with your payments.
  • Business credit cards: Business credit cards come with revolving credit lines just like lines of credit. Keep in mind that the rates are typically very high, which means you should use your business credit cards only as a last resort and if you know you can maintain the payments.
  • Invoice factoring: This option allows you to borrow against your accounts receivables. Put simply, you sell the lender your accounts receivables for immediate funds. Lenders issue capital on a short-term basis to companies that are owed money by their clients.
  • Microloans: Microlending connects small businesses with non-traditional lenders for small loan amounts—typically less than $50,000. This option is common with borrowers who don't qualify with traditional lenders. It is supported by peer-to-peer lending platforms.

How to Qualify for a Small Business Loan

There are several things small business owners need to qualify for a small business loan:

  • Credit scores: Your credit scores help lenders determine your likelihood to repay the loan. Lenders typically look at both a small business owner's business and personal credit scores to see if they qualify for a small business loan. Most lenders have a minimum credit score while others may be more lenient.
  • Business revenue: Lenders may require your business to bring in a minimum amount of revenue to qualify for a loan. This amount may vary from lender to lender, so it's a good idea to check with them before you apply.
  • Business plan: This is a proposal that tells the lender what your business is all about. It is also meant to show the lender how you intend to use the loan and your plan to repay it. Drafting a business proposal helps the lender trust you and your ability to meet your financial obligations.
  • Number of years in business: Being in business longer usually means that you'll be more likely to pay off the debt. Many lenders want to see that you've been in business for at least two years before you apply for a loan. But, you may find some that have a lower threshold.

FICO Credit Score Ranges

Rating  Score Range 
Excellent  800–850 
Very Good  740–799 
Good 670–739  
Fair 580–669 
Poor 300–579 
No Credit Not enough data to score

How to Apply for a Small Business Loan

There are several steps you'll have to follow to apply for a business loan:

  1. Identify your needs and determine the type of loan required. Different purposes require a different loan. For instance, you may need one type of loan for startup costs and a different type of loan to pay for regular business expenses. This will also help you figure out how much money you'll need to borrow.
  2. Determine whether you'll qualify. Check your credit score to see if you'll be able to qualify for a loan. You should also review your cash flow figures to see if you have enough revenue to be approved.
  3. Research lenders. Make a list of suitable lenders based on the information you gathered about your qualification criteria. Review their terms and conditions so you only choose the lenders that meet your needs.
  4. Fill out the application. Depending on the lender, you can do this online, in person, or over the phone.
  5. Provide supporting documents. Your lender will require supporting documents, such as tax returns, business proposals, financial statements, personal guarantees, and information about your collateral if you're applying for a secured loan.
  6. Sign the loan papers and get your funding. Once you're approved, sign your loan documents and receive your money.

Pros and Cons of Small Business Loans

Pros

  • Funds growth: You can use the funds for your loan to help your business grow

  • Frees up capital: Using borrowed capital frees up your own money to use elsewhere

  • Builds business credit history: You can establish or improve the credit history of your business as long as you make your regular payments on time

Cons

  • You must qualify: You may not qualify if you don't meet the eligibility requirements of certain lenders

  • Costs: You may have to pay additional costs on top of the loan, including application and origination fees

  • Collateral and/or high interest rates: You may require collateral to secure your loan and your rates may be higher, especially if you have a relatively new business

Alternatives to Small Business Loans

If you don't qualify, are declined, or don't want to borrow money for your small business, you may want to consider some other ways to raise capital for your small business. Some of the alternatives include:

This isn't meant to be an exhaustive list. Make sure you do your research to see what other options fit your needs and budget.

Why You Should Trust Us

We looked at more than 20 lenders who offer small business loans, small business lines of credit, and unique funding options like invoice factoring. We looked for lenders who offer transparency when it comes to their loan products and eligibility requirements, and we also looked for lenders who post fees and ongoing costs prominently on their websites. 

To find the best small business loans, we compared loan options and lenders to find companies with excellent ratings and user reviews on websites like Trustpilot. We also looked for lenders who offer high loan amounts and flexible repayment options, as well as the ability to apply and set up loan funding online.

Frequently Asked Questions

  • Are You Personally Liable for an SBA Loan?

    1. When applying for an SBA loan, you must provide an unlimited personal guarantee if you own 20% or more of the business. This means that if you fail to repay the loan because the business fails, you are still on the hook for repaying the entire loan amount. Also note that, in the case of a borrower defaulting, the lender can recover 50% to 85% of the outstanding loan balance from the SBA.

  • How Can I Use a Small Business Loan?

    Approved applicants can use their small business loan funds to pay for any ongoing expenses as well as payroll or investments in equipment or inventory. Small business loans are also frequently used as a means to manage or smooth out cash flow in times when expenses exceed income. If you’re a small business owner who needs to buy some equipment but you’re waiting to be paid by a few major clients, for example, it could help you keep up with your expenses and buy equipment while you wait for your invoices to be paid.

    Other popular uses of small business loans include raising capital to hire new staff or to launch a new marketing or ad campaign that could help boost revenue.

  • Does the Small Business Administration Approval Loans?

    The Small Business Administration is a government agency that helps small businesses in the United States. The SBA doesn't approve loans. Rather, its loan program is designed to connect small business owners who are interested in borrowing capital with SBA-approved lenders. This means that they loans are backed or guaranteed by the SBA. These loans come with longer repayment terms and may be easier to obtain.

  • Can You Get a Small Business Loan with Bad Credit?

    Yes, you can get a small business loan with bad credit. Some lenders work specifically with businesses that have a bad credit score while others don't have a minimum credit score requirement at all. Keep in mind that you may end up with a higher rate and lower loan amount. You may be able to remedy this by putting up collateral to secure your loan. Be sure to research your options before you commit to a lender.

  • What Should I Do if I’m Rejected for a Small Business Loan?

    Your lender should explain the reasons why you denied a loan in writing. The following may apply for your situation:

    • If there was an error in your application, fix the mistake and request a review of your submission. You may be missing key documents or other information the underwriters need to proceed with your approval.
    • Did you apply for the right product? It's possible you were denied because you applied for the wrong type of funding.
    • If there are any red flags that the lender addressed in their denial, consider addressing them before applying again. For instance, work on improving your credit score and cash flow.
    • Your business is too new. You may not have the cash flow or history to support a loan application at this time.
    • Consider an alternative lender. Your bank or financial institution may have denied you a loan, but other lenders may be willing to work with you. Be sure to do your research before you apply so you don't hurt your credit score with too many inquiries.

  • How Much Income Do You Need to Get a Business Loan?

    Income requirements tend to vary by lender and loan type. Every lender has a different set of business and financial requirements to qualify. For instance, you must have a minimum of $100,000 in revenue to qualify for a loan with OnDeck. Review each lender's criteria before you apply or consider a lending marketplace like Lendio, which connects you with different lenders.

  • How Much Can you Borrow for a Startup?

    Startup business loans tend to be smaller than other business loans. That's because most of these companies have only been around for less than two years. Most lenders want to lend to businesses that have an established history of credit and income. While the average small business loan is $663,000, startup loans tend to range between $9,000 and $20,000.

  • What Disqualifies You From a Small Business Loan?

    There are certain reasons why a lender may disqualify you from a small business loan. This includes your credit history (or lack thereof) and credit score, your income/revenue stream, the length of time in business, the type of business you run, and the purpose of the loan.

Guide to Small Business Loans

Best Small Business Loans

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Article Sources
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