Best Small Business Loans – Find the best rates from top online loan providers

In the cut-throat world of business, small businesses are always walking on the edge between failure and success. We have compiled a list of a few online credit providers for small businesses and types of credit they are best suited for.

Best Small Business Online Loans

The US Small Business Administration (SBA) lays down the size requirements for a business to qualify as a small business. The two parameters used for this classification are the revenues and the number of employees. They vary by industry. If the business goes above the specified threshold it will lose its classification as a small business, and its eligibility to participate in SBA and federal programs for small businesses.

In addition to the size standards, SBA specifies that the business must:

  • Be a for-profit business of any legal structure
  • Be independently owned and operated
  • Not be nationally dominant in its field
  • Be physically located and operate in the U.S. or its territories

In addition, SBA says that “Businesses outside the U.S. may still be counted as small if they have an operation in the U.S. that makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor.”

Best Business Loans Providers

In the cut-throat world of business, small businesses are always walking on the edge between failure and success. One small misstep and into the abyss they go. Accommodation by way of funding can go a long way in keeping them afloat and focusing on their business. It could be for meeting working capital requirements or for a big purchase.

We list below a few online credit providers for small businesses and which of the type, or types of credit they are best suited for.


Amount: $5,000 to $500,000
APR: 9% to 99%
Repayment: Daily or weekly instalments for a duration between 3 and 36 months
Minimum time in business: 1 year
Minimum annual revenue: $100,000
Minimum Credit Score: 600
Other conditions: No bankruptcies in the last 2 years. Personal guarantees may be required.


OnDeck focuses on funding for small businesses based on their belief that small businesses are the lifeblood of the U.S. economy, and have historically suffered because of inadequate funding opportunities.

Started in 2006, the company today has over $13 billion in credit to business.

OnDeck pioneered an online process that is driven by data, based on which a credit decision is taken quickly, which is what small businesses need. They use data analytics in the background to assess the creditworthiness of an applying customer.

OnDeck is best for Term Loans and Line of Credit.


Amount $50,000 to $350,000
APR: 6.99% – 24.99%
Repayment: 1 to 4 years
Minimum time in business: 2 years
Minimum annual revenue: $200,000
Minimum Credit Score: 650
Other conditions: No bankruptcies in the last 5 years.

Credibility Capital

A New York based online lender founded in 2013, Credibility Capital offers l borrowers access to short-term business loans. Theirinvestors include insurance comoanies, family offices, banks and hedge funds with an appetite for current income that can be provided by a term loan portfolio.

They are, however, geographically confined, and currently do not offer the loan in certain states like Nevada, North Dakota, South Dakota or Vermont.

A one-time origination fee between 4 and 6% is levied to cover their cost of processing and servicing the loan. It is considered to be a good option for borrowers with strong credit looking for low-cost business. According to their co-founder and CEO Brett Baris, their average loan size was $175,000 in 2019. Further, expansion and refinancing higher APRs were the two most common uses for the loan.

Credibility Capital is best for Term Loans.


Invoice Factoring:

Amount: $20,000 to $5,000,000
APR: 15% to 68%
Repayment: 1 to 13 weeks
Minimum time in business: 3 months
Minimum annual revenue: $120,000
Minimum Credit Score: 530
Other conditions: Not available in North Dakota, South Dakota or Vermont.

Line of Credit:

Amount $5000 to $250,000
APR: 15% to 78%
Repayment: 6 to 12 months
Minimum time in business: 2 years
Minimum annual revenue: $360,000
Minimum Credit Score: 650
Other conditions: Not available in North Dakota, South Dakota or Vermont.


BlueVine seeks to “empower small businesses through innovative banking designed for them.” Apart from banking services, it offers financing solutions like Invoice Factoring, Line of Credit and Term Loans for small businesses. It has provided small and medium-sized businesses with access to over $14 billion in financing. It is also a participant in the latest round of the Paycheck Protection Program loans that have been rolled out to support businesses during the Covid-19 pandemic.

BlueVine’s line of credit provides fast working capital for short-term borrowing needs with funding times between 12 and 24 hours. If you have business customers who don’t pay on time, factoring will fill the gap in cash. Its invoice factoring works best for financing larger invoices, but only if your customers reliably pay on time. BlueVine is also an option for borrowers with poor credit scores as it focuses on the business and its strength.

BlueVine is best for Invoice Factoring and Line of Credit.


Amount: Upto $ 500,000
APR: 12.18 to 36%
Repayment: Not specified
Minimum time in business: 2 years
Minimum annual revenue: Any
Minimum Credit Score: 650
Other conditions: No bankruptcies in the last 7 years. Not available in Nevada.

Funding Circle

Listed on the London Stock Exchange, Funding Circle claims to be the “largest online small business loans provider and one of the best-capitalized lending platforms in the world.” They have enabled over one hundred thousand businesses, jewellers to bakers and film makers to accountants, access over GBP 11.5 billion in funding.

It is a peer-to-peer business lender that connects with people looking for financing with people and organizations interested in providing the financing.

Funding Circle may be a good option for borrowers who have been in business for at least two years and have a track record of revenue generation, who are looking for business expansion or refinancing more expensive debt. The application and sanction process is much faster than SBA loans or of traditional banks. Their rates are competitive.

Funding Circle is best for Online Term Loans.

SBA (Small Business Administration) through private lenders

An SBA loan is issued by private lenders under an arrangement with the SBA, that seeks to promote the interests of small businesses in the USA. It is offered by banks and online lenders, and partly guaranteed by the government. If the borrower defaults on the repayment, the lender will get its money from the SBA. The credit risk of lenders, therefore, is covered.

SBA loans work best for established businesses that prioritize low lending costs over funding speed.

Basic requirements to be eligible to apply for an SBA loan:

  • 2 years or more in business
  • Only U.S. businesses can apply
  • Must first use alternative financial resources, including personal assets.

The profile of successful applicants:

  • Approved SBA lenders will almost always have credit score minimums between 620-640.
  • Average successful applicant has an annual revenue of over $180,000.

An unconditional personal guarantee is required from all owners with a stake in the business greater than 20%. This guarantee puts you and your personal assets at risk of liquidation in the event you are unable to pay the loan.

There are multiple loan programs under the SBA umbrella meant for different requirements and with different caps on the amount. The processing time and documentation could vary depending on the type of loan applied for.

SBA is best for, what else, SBA loans.

SBA Loans:


$ 5,000 to $5,000,000

Annual Percentage Rate (APR)

5.5% upwards


5 – 25 years

Minimum time in business

2 years

Minimum annual revenue

Not specified

Minimum Credit Score

Not specified

Other conditions

Personal guarantees of all owners with a stake over 20%. All other avenues for funding should have been utilized before applying for the SBA loan.



Best rates

SBA loans are governed by federal rules. Lenders making SBA loans are required to follow the lending guidelines. Lending is at prime rate plus a spread, that make up the interest rate on SBA loans. The APR on SBA loans tends to be much lower than other loans like term loans and lines of credit. Online lenders may cap their SBA loans at 10% even as they make Term Loans that could be as high as 99% APR.

Low fees

Guidelines for fees are also based on federal guidelines and generally include a guarantee fee taken upfront. The amount is based on the tenure of the loan as well as the amount. In addition, an annual service fee is levied, which is based on the outstanding portion of the loan and the guaranteed portion thereof.

Longer tenures

SBA loans are repayable over long periods of time. Loans for real estate can be as long as 25 years while those for equipment and inventory could be up to 10 years. This provides flexibility to the business in managing its cash flows in the interim.


Complex application and approval process

SBA loans, being guaranteed by the SBA, are procedurally more complex and involve a lot of paper work. As a government program, due diligence needs to be done for every transaction to ensure compliance. They could take long for approval. In a way, that should be considered as reasonable as these are loans on favorable terms, if approved.

Lender of last resort

SBA loans are like last-resort lending. You need to have explored all other options before seeking an SBA loan.

Personal guarantees

All owners with a stake of 20% or more in the business are required to give personal guarantees which could put their personal assets at stake in the event of the business not having a good outcome.



What is a Loan?

Investopedia defines a loan as “a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. In many cases, the lender also adds interest and/or finance charges to the principal value which the borrower must repay in addition to the principal balance.”

A small-business loan, by extension, becomes a credit vehicle for businesses that qualify to be classified as ‘small business.

Types of small-business loans

All of these types of loans, except the SBA Loan, have wider applications; they are applicable to all types of borrowers, not only small businesses. However, they are equally applicable to small businesses. Of course, providers could choose to offer specially designed packages for small businesses, of any type of loan, from time to time.


Also known as PPP, the paycheck protection program is designed as an incentive to ensure that the small business is able to retain its workforce and pay them wages. It is particularly important during the present Covid-impacted times, with businesses struggling to pay their employees. These loans can be accessed from institutions participating in the program.

Small Business Administration (SBA) LOAN

The agency does not directly lend money to eligible borrowers but works with the leading organizations to set up guidelines that allow for loans to be accessed by borrowers on reasonable terms. It makes it easy for small businesses to access credit by reducing the risk of non-payment for lenders. However, the application and approval process, historically, has been time-consuming and hence should be attempted for requirements that are long-term in nature, and not for money required for paying bills tomorrow.


Online lenders typically lend up to $500,000 through the online channel. A term loan classified as short-term would have a repayment requirement not extending beyond 12 months while a long-term loan could go up to 10 years. While available for business, they can also be availed for specific high-value items.


A line of credit is a more flexible form of credit. It is like setting an overdraft limit on your account. the bank will let your account go into a debit balance up to the approved limit.

Apart from flexibility, the other benefit here is that interest is payable only on the amount actually used and not on the sanctioned amount. Some of them may not have a defined repayment schedule. Hence, they are considered riskier than a Term Loan.


Small businesses operate on thin margins. Small delays and surprises can derail the business. after having done the hard work, produced the product (or service), found a buyer, done the sale, issued the invoice, there can still be delays in receipt of the money from the buyer which can create working capital challenges. Invoice factoring encashes the unpaid invoices of a small business. The lender gets paid as and when the customer pays the invoice. This is a fairly speedy way of financing.


There are a number of other types of financing that can be raised for a business other than the standard loans and limits.

Personal loan – A fledgling business is often equated with its owner/s and is considered as good or bad as the owners, till it has got an opportunity to establish a track record for itself. A small business is also like an extension of the owner/s. Hence, many business owners with a good credit record opt for taking a personal loan to finance their business. It is a fairly quick and easy mechanism.

Business Credit Cards – A business credit card offers greater flexibility than a term loan. Besides, you need to pay back and will be charged interest on, only the amount that you have used and not the sanctioned limit. You will also get the revolving credit facility to defer the repayment. However, credit card limits are likely to be lower than term loans.

Getting a Business Loan

Whether a business or a personal loan, the primary question that a lender needs a convincing answer to is ‘will this loan be repaid?’ There will be other related questions like interest being serviced, timeliness of repayment, etc., but the primary question will be related to the security of the money being lent.

Since that is an event that is in the future, there are no guarantees for repayment. However, lenders have, through experience, establish a set of criteria that they would like borrowing applicants to fulfil for a loan to be considered. These criteria can be considered as surrogate variables through an approximate answer to the ‘will this loan be repaid?’ question is available. These variables usually revolve around your personal credit score, how long has the business been running, cash flows and financial performance, future projections, the purpose of the loan, etc. In essence, getting comfort that the loan will be repaid before disbursing the money. In some cases, additional external securities may be asked for.

The brighter the prospect of the lender getting their money back with interest on time, the more favourable the terms that a borrower can expect. And vice versa.

Why online lenders?

Online lenders have a clear, transparent process, which can be navigated quickly. They are able to take their decisions quickly, as compared with traditional lenders like banks. Of course, sometimes, the loan application can also be rejected just as quickly. The amounts offered by online enders tend to below, as they extend loans based on a quick, transparent process and not thorough due diligence that may be done by traditional lenders. By keeping costs low, online lenders may also be able to offer better terms.

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