Compare Reviews for Business Loans
When business owners’ financial needs are greater than their available resources, business loans can fill that financial gap. Many business loans require business owners to put up collateral, usually in the form of their home or other property, that the bank can seize if the business neglects to repay their loan.
Banks and credit unions are good places to start looking for a business loan, especially for existing and expanding businesses. Startups and small businesses without good credit can search for business loans in nontraditional places, including online lenders that specialize in financing new businesses.
Top 10 Best Rated Business Loans
|Read 49 Reviews|
Founded in 2009, National Business Capital is a business financing provider best known for their fast approval and funding processes. NBC specializes in business equipment financing, lines of credit and small business loans.
|Read 11 Reviews|
Established in 2007, The Business Backer was created in order to help small businesses thrive. Backed by Enova International, we provide honest and transparent funding to help small businesses get the capital they need to grow.
|Read 6 Reviews|
Headway Capital provides access to credit in order to run your small business more efficiently. We are part of Enova International, a leading online lender, which has been providing loans to individuals for over 10 years.
|Read 13 Reviews|
SmartBiz was founded in 2008 to help small businesses navigate the process of applying for and receiving SBA guaranteed loans. They partner with lenders to make it easier for them to lend to small businesses.
|Read 268 Reviews|
Currency Capital's services include various business financing options including business loans, equipment financing, equipment leasing and working capital. They offer competitive interest rates and 100 percent financing services.
|Read 993 Reviews|
LendingTree, Inc., offers many loan services, including business loans & mortgages. They were founded in 1996, and the website launched in 1998. Their site allows borrowers to fill out one application to apply to multiple lenders.
|Read 61 Reviews|
Business Finance Advance has a free, quick quote option via their website that gives business owners an instant approval decision. They have a 95 percent approval rating, and their loans go as high as $2.5 million per location.
|Read 7 Reviews|
Kabbage has a simple online application that requires no fee. Most applicants will have an instant approval decision, complete with a cash offer. Credit lines range from $2,000 to $100,000.
|Read 12 Reviews|
Founded in 2005 and based in New York, Bizfi is an automated online marketplace for financing options, specializing in business loans. Their services include short- and medium-term, SBA loans, equipment financing and more.
|Read 12 Reviews|
Dealstruck offers multiple funding options to small and medium-sized businesses, including loans and lines of credit up to $500,000. They have several online tools to help clients determine which option best suits their needs.
Personal Finance Contributing Editor
Barbara Friedberg, MBA, MS is a former investment portfolio manager with decades of financial experience. Friedberg taught Finance and Investments at several universities. Her work has been featured in U.S. News & World Report, Investopedia, Yahoo!Finance and many more publications.
What features matter most?
Fixed or variable interest rates
When a customer takes out a business loan, an interest rate is established. With a fixed interest rate loan, the payment remains constant over the entire loan term. The interest rate on a variable rate loan may go up or down depending on pre-determined conditions.
- Loan term: Whether a loan is a for a short time period or for a long one, the interest rate and payment amount remain constant with a fixed rate loan. In a rising interest rate environment, the borrower risks higher debt payments with a variable rate loan.
- Current market rate: Interest is usually calculated at the current market rate, so the loans is competitive with similar loans from other institutions. The fixed interest rate won’t change, whereas if market interest rates go up or down, the variable interest rate and subsequently the loan payment will adjust.
- Stability: With a fixed rate loan, the interest rate remains stable, even if the market changes. Fixed rate loans offer greater future debt payment certainty than variable rate loans.
Set maturity date
The maturity date, which is set at the time of the loan, is the date by which the loan must be repaid. Some loans have a set maturity date whereas others do not. For example, a line of credit may not have a pre-determined maturity date.
- Loan is for a specific time period: The loan must be paid back within a specific time period or be refinanced; it is not open-ended.
- Interest stops accruing on maturity date: Users may have to repay interest even after the principal amount is repaid, but after the maturity date, interest payments stop and the entire loan must be repaid.
- Users can prepay: Loans can be paid off early without penalty, as long as they are paid in full by the maturity date.
Many business loans require customers to put up collateral, or property, that is used as security if the borrower defaults on his or her loan payments. If the user defaults on the loan, the bank can seize the property and sell it to recover its loss. For example, an equipment loan usually uses the piece of equipment as collateral.
- Flexible requirement: The amount of collateral needed depends on the size of the loan. Smaller loans may not require collateral.
- Requires assets: In general, larger loans require high-value assets to be used as collateral against the business loan.
- Increases risk: Business owners should be certain that they can repay loans prior to putting up collateral, as they can lose the property if they default on the loan.
Most business debtors are not expected to repay the loan all at once. Instead, borrowers pay in installments until the loan, interest charges and financing fees are completely paid off.
- Variety of plans: Daily, bi-monthly and monthly repayment plans are common. Some lenders offer flexible repayment schedules. The lender explains the repayment options at the time of borrowing. The repayment schedule depends on the amount of the loan, the customer’s credit rating, the type of loan and the customer’s financial circumstances.
- May be renegotiated: Under special circumstances, if the borrower encounters financial difficulties, he or she may be able to refinance the loan in order to lower the payments.
- Takes interest and fees into account: The loan documents explain how interest and fees are calculated and repaid.
Limitations on additional debt
Some lenders require that business borrowers agree not to take out additional loans for greater than a specific amount. This protects the debtor from securing more debt than he or she can realistically pay back.
- Not required for all loans: This feature is used for larger loans, where the lender is risking a lot of money if the debtor defaults.
- May need permission letter: In some cases, debtors may need to get a written letter from the lender giving him or her permission to take out an additional loan during the life of the debt.
- Independent of credit rating: This limitation is set by the lender and may be unrelated to the user’s credit rating.
Not all business loans are alike. Many lenders offer flexible terms, depending on the debtor’s credit rating, the strength of the business and other factors.
- Short-term loans for less than three years: Short-term loans last for a few months through several years.
- Flexible payment plans for loans of all sizes: Users can choose from several different payment plans with varying interest rates and loan lengths with a flexible term loan.
- Various down payment requirements: Each lender has its own minimum requirements for down payments. The down payment may depend upon type of loan, borrower’s credit worthiness and company policy.
What are different types of business loans?
The Small Business Association (SBA) offers loan guarantees to small businesses, including startups, that need additional support and help securing financing. An SBA guarantee lets a bank or other lender know that the SBA believes the business is sound and will be able to pay back the full loan amount, even if the business does not have great credit. The SBA can guarantee between 75-85 percent of a loan, depending on the total loan amount.
Short-term loans last for a maximum of three years. They often require monthly payments.
Some lenders offer terms up to 20 or 30 years. These loans usually are for large amounts and may be used to buy equipment, construct facilities or make other large business investments.
Business lines of credit
A line of credit gives companies with ongoing financial need the opportunity to borrower on an as-needed basis.
Certain lenders specialize in equipment financing. These lenders may fund leasing or the purchase of business equipment.
Who's it for?
People who are just starting a business may need a loan to buy equipment, hire employees, advertise their business and/or obtain required licenses. In general, startup funding is more difficult to secure than loans for established businesses due to the greater risk of new-business failure.
Small and local businesses
Small, local and mid-sized businesses may need money to expand, acquire materials, cover bills and payroll, purchase equipment or fund inventory. All types of businesses for a variety of financing needs may benefit from a loan at some point.
Businesses that are poised to grow may need financing to help them reach more customers, open new locations, increase their marketing or support other expansion needs.
Currency Capital was founded in 2009 to save faltering businesses in the wake of the economic crisis. The company’s goal is to give business owners a range of financial options and to promote the health of the small business community. Currency Capital is a member of the National Equipment Finance Association (NEFA).
- Products: Premier Platinum Card Program for pre-qualified customers for easy access to capital. Loans for a variety of business needs; equipment leasing, working capital, small business loans and equipment financing. Flexible loans tailored to the client’s needs.
- Interest rates: Competitive rates based on term and equipment cost.
- Service: Currency Capital relationship managers meet strict hiring requirements and are able to offer borrowers creative and effective financing solutions.
- Borrower qualifications: Credit score is not the only factor considered when granting a loan. Borrowers are considered on a case-by-case basis, and Currency Capital reviews many factors when making a loan.
- Fast approval process: After completing a quick application, borrowers may receive funding in as short as one day.
- Large loan limits: Currency Capital funds loans up to $1,000,000 for businesses of all sizes.
- Best for: Small to mid-sized businesses, local businesses and expanding businesses seeking small business loans, equipment financing, equipment leasing and working capital.
Founded in 2009, National Business Capital is a Bohemia, New York-based business financier. It is known for providing loans to small businesses in any industry, in a quick and efficient way. It primarily offers business equipment financing, business lines of credit and small business loans.
- Low credit funding: National Business Capital works with consumers who cannot secure a loan through their banks; in fact, 70 percent of their customers have previously been denied a loan. National Business Capital advertises that it can help business owners with FICO credit scores below 500.
- Brief application process: Interested business owners can apply online to be considered for funding. The application takes just two minutes, and a representative will contact you with a decision in 24 hours or less.
- Helpful online calculators: National Business Capital offers helpful online calculator tools for customers who want to calculate how much of a loan they can afford and how much the loan will cost them over time.
- Flexible loan terms: National Business Capital offers flexible terms, with one to five-year repayment options and ten-year repayment terms for extensive manufacturing equipment financing.
- High approval rate: Even though over 70 percent of their customers have been denied loans through traditional banks, over 90 percent of applications are approved by National Business Capital. That means most people who can’t find a small business loan elsewhere because of their credit can be financed through National Business Capital.
- Best for: small business owners who need business equipment financing, business lines of credit or small business loans.
Headway Capital is a part of the publicly-traded lender Enova International. Headway Capital offers lines of credit up to $35,000 to many types of small businesses. It is headquartered in Chicago.
- Payment options: Borrowers can determine which repayment options work best for them. The loans have terms of 12, 18 or 24 months and payments can be made weekly or monthly. These options can vary by state, but the website clearly outlines your options before applying.
- Clear minimum qualifications: Headway Capital’s website clearly outlines the minimum qualifications for businesses. To qualify, you must have been in business at least one year and have a revenue of at least $50,000 per year.
- Timely: Once your application is approved, funds will be deposited into your business’ account quickly. Funds are often available the next business day.
- Early repayment: You can repay your Headway Capital business loan early without incurring additional fees.
- Pre-approval: You can see how much money you would qualify for and get an initial approval online. This pre-approval check will not impact your credit score.
- Best for: small businesses, local businesses and expanding businesses.
Also known as BFAdvance LLC, Nationwide Business Advance Companies, Merchant Cash Advance Companies and Business Advance Companies. Business Finance Advance offers funding opportunities to small, mid-sized and large companies. BFA deals in alternatives to traditional bank loans as part of its mission to make funding more accessible to businesses.
LendVantage’s mission is to make it easier for small businesses to gain access to working capital. The company offers special financing to women-owned businesses and provides general business financing.
Swift Capital believes that worthy businesses are often denied funding based on personal credit scores. Swift funds business needs based on the strength of the firm, not on personal credit scores. The firm uses data and technology to streamline the lending experience and connect business owners with funding sources.
Through their lending marketplace, Biz2Credit connects borrowers with their network of over 1,300 pre-screened lenders. Biz2Credit has been connecting businesses and lenders since 2007. The company processes more than $1.5 billion per year.
Founded in 2009, VMC Capital offers merchant cash advances and business cash advances to qualifying businesses. These are alternatives to traditional loans.
Kabbage is a non-traditional small business lender that provides cash strapped businesses a line of credit. Kabbage uses a variety of data sources used by the borrowers’ business to quickly deliver funding.
Lendio is an online loan network facilitator. After a brief application, the company matches small and local businesses and appropriate lenders within the Lendio network.
Wall Street Funding provides loans to businesses based on their expected future earnings. The company requires no collateral and offers cash advances to fund a variety of business expenses.
Started in 1995, American Capital Group provides funding for businesses to obtain equipment. Additionally, American Capital serves as the middleman between vendors and equipment lessees for business owners seeking equipment to lease. Products: 100 percent financing for the cost of new or used equipment including tax and shipping. Personally tailored leasing programs. Offerings include application-only, start-up, 100 percent finance, FastTrack and Flex-Pay programs. This company also offers funding for inventory management and specialized customer projects.
Marlin is a publicly held company that provides commercial equipment financing and working capital loans to businesses nationwide.
Founded in 1998, Can Capital offers a wide range of loans as well as an online tool to help determine the best available funding options. Can Capital works to create an individualized experience for each client and their business' needs.
Funding Circle is an online loan marketplace specifically focused on small businesses. Funding Circle matches borrowers with accredited lenders from across the globe. Investors in Funding Circle loans receive higher interest rate returns than banks and CDs while helping small businesses fund their goals.
- Products: Small business loans for various needs such as expansion, inventory, equipment, refinance debt or to hire additional staff.
- Interest rates: As of April 12, 2016, fixed interest rates start at 5.49 percent and go up to 26.79 percent, depending on loan term, business and borrower qualifications. The firm promises a transparent fee structure and no prepayment penalties.
- Service: Access to a dedicated loan specialist for assistance is available throughout the borrowing process.
- Borrower qualifications: The application process requires two years of the most recent business tax returns, the most recent personal tax return, and six months’ recent business bank statements. For loans greater than $300,000, additional documentation includes six months’ recent bank statements, YTD balance sheet and income statement, and completion of the company’s ”outstanding business loans & credit worksheet.”
- Approval process: The quick online application promises immediate response from the loan specialist. Borrowers may receive the loan qualification within 72 hours and funding may be secured within 10 business days.
- Loan limits: From $25,000 to $500,000.
- Repayment options: Monthly repayment is the norm and the term varies from 1 to 5 years.
- Website: Excellent and transparent website with easy access to educational resources and borrower information.
- Best for: Established small business owners and expanding businesses.
National Funding is one of the nation’s largest private providers of small business funding. Founded in 1999, the company provides a wide range of services to help small companies with their funding needs.
- Products: Small business loans, equipment financing, merchant cash advances, credit card processing and other merchant services. National offers individually tailored lending solutions.
- Interest rates: Interest rates are determined based on various business factors.
- Service: Direct phone access to a loan services specialist is available.
- Borrower qualifications: No collateral or down payment is required.
- Fast approval process: Borrowers may receive funding within 24 hours.
- Loan limits: Up to $500,000.
- Repayment options: National has fixed repayment terms with specially tailored repayment frequency.
- Business resource center: Useful educational tools, blog, white papers and more.
- Best for: Small and mid-sized business owners.
Fundera is an online marketplace that helps small business owners connect with funding providers. The company simplifies the business loan application process by doing the groundwork to identify the industry lending leaders to expedite the borrowing process.
Fundation is a small to mid-sized lender that utilizes technology to expedite the lending process. The company is a direct lender, which means they lend their own money.
- Products: A range of small business loan products with fixed and simple interest rates are available. The types of loans include short-term business, bridge, expansion and acquisition, working capital, alternative, commercial, inventory, refinancing, and cash-flow loans.
- Interest rates: The interest rates are risk-based and determined based upon estimated credit risk of the borrower. Including origination and closing fees the annual percentage interest rates range from 7.99 percent to 29.99 percent as of April, 2016. There are no prepayment fees.
- Service: There is a 10-minute application process and access to a dedicated customer relationship manager. Online live chat also available.
- Borrower qualifications: Minimum qualifications include two years in business, three employees and $100,000 in annual revenue. Good personal credit is required.
- Fast approval process: After loan documents are signed the loan is eligible for approval.
- Loan limits: General lending parameters range from $20,000 to $500,000. One million is available to qualified businesses.
- Repayment options: Repayment terms vary based upon loan. For most loans the repayment period is one to four years. There are shorter term options for working capital, inventory turns and immediate cash flow needs. For business growth and expansion loans, longer terms are available. Payments are due twice per month.
- Special features: Refinancing is available after nine months. Transparent and easily accessible website and online customer chat feature.
- Best for: Small and mid-sized businesses seeking fixed rate funding with high lending amounts.
RapidAdvance is a full-service small business lender that directly funds its loans. The company offers a range of lending options, from its Small Business Loan Program to cash advances, lines of credit and financing for SBA guaranteed loans. RapidAdvance is one business within a large family of companies.
- Products: RapidAdvance offers a variety of financing options, including small business loans, merchant cash advances, lines of credit and SBA bridge loans, which help business financially bridge the gap between the time they apply for an SBA guaranteed loan and the time the loan is approved.
- Interest rates: Available based upon credit-worthiness after completing an application. Rates start at 1.25 percent per month.
- Service: RapidAdvance offers a dedicated account executive and online phone chat.
- Borrower qualifications: There are lending solutions for all types of borrowers.
- Fast approval process: Approval is available within 24 hours with funding in as little as three days.
- Loan limits: Flexible lending limits depend upon the client’s business revenues and qualifications.
- Repayment options: The repayment options are customized to fit the client.
- Best for: Small and mid-sized businesses.
ForwardLine is a financing company that gives its clients access to loans, merchant cash advances and payment processing services. It was founded in 2003 by a group of business professionals that wanted to make it easier for companies in the United States to find the capital needed to expand operations and improve sales strategies. Today, ForwardLine has a financing volume over $250 million and a payment processing volume over $1 billion.
Founded in 2010 as RetailCapital, this company gives small and medium-sized retail businesses access to working capital and business loans. In 2015 they adopted the new name, Credibly, to reflect their growth to markets other than retail. They now serve over 125 industries and have partnered with Flexpoint Ford, a private equity investment firm, WebBank, Alostar Bank of Commerce and CapitalSource to offer a wider variety of services.
Celtic Bank was founded in 2001 and is headquartered in Salt Lake City. They lend money to small and medium-sized for business acquisition, working capital, inventory and equipment. They also finance ground-up construction, offer debt refinancing, money marketing accounts (MMA) and certificates of deposits (CD).
Expansion Capital Group (ECG) was founded in 2013 and offers financing options to small and medium-sized businesses. ECG has worked with more than 650 types of businesses and loaned those businesses more than $65 million.
The Business Backer was founded in 2007 and is headquartered in Blue Ash, Ohio. They have financed businesses with more than $4 million. The publically traded company offers several types of funding, including equipment loans, working capital, lines of credit and traditional loans.
OnDeck was founded in 2007 and is a publically traded company. It’s headquartered in New York City. Since it began, the company has provided over $4 billion in capital to small businesses. They base their application approval on both a business’ gross revenue and the owner’s credit history.
SmartBiz is headquartered in San Francisco. The company was founded in 2008 to help businesses secure small business loans.
The Interface Financial Group (IFG) has provided financial services to small and medium-sized businesses for more than 40 years. They offer invoice financing, meaning they purchase unfilled invoices from a B2B client and then the customer pays IFG when the invoices are completed.
Dealstruck is a financial services company headquartered in Carlsbad, Calif. They offer traditional business loans as well as alternative funding options for small and medium-sized businesses. They focus on providing flexible options so business owners can determine which financing option is best for them.
Bizfi was founded in 2005, and was originally Merchant Cash and Capital. The company and its family of companies have given over 30,000 small businesses access to $1.7 billion in alternative financing.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.