Best Small Business Loans for 2021

ElitePersonalFinance
Last Update: January 7, 2021 Business Loans Credit Card Reviews Credit Cards Loan Reviews Loans

So you have a small business, and you need some capital?  Will you get approved for a small business loan?  What are the best options, and who offers the best rates?  If you are asking yourself these questions, you came to the right place. ElitePersonalFinance is the web’s most trusted source of information for personal and business financial tips. We compiled a list of all of our favorite small business loans and compared them for you to make your search as easy as possible.

Below you will find a list of all of the best business lenders and recommendations on which ones may fit your unique scenario.

Amount

$250,000

APR

24% to 99%

Credit Score

0

Amount

$250,000

APR

19.30%

Credit Score

500

Amount

$500,000

APR

10% to 36%

Credit Score

600

Amount

$300,000

APR

10% to 35.7%

Credit Score

600

Amount

$350,000

APR

10-25%

Credit Score

650

Amount

$150,000

APR

9-40%

Credit Score

600

Amount

$500,000

APR

16.7%-99.4%

Credit Score

500

Amount

$200,000

APR

30%-70%

Credit Score

550

Amount

$100,000

APR

10%-79%

Credit Score

0

Amount

$5,000,000

APR

15%-78%

Credit Score

530

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Are You looking for:

Smartbiz.com

Since 2009, Smartbiz.com has offered some of the fastest and least expensive financing options for small businesses. They can offer some of the least expensive financings by keeping their requirements high. You must meet particular criteria to get approved, but their rates are very low if you do get approved. They are actually giving you access to a U.S. Small Business Administration loan, which typically require you to apply through a bank. Their online platform allows for an easy and fast application process, and they offer loans up to $350,000 for approved businesses.

Who is the best fit for:

Smartbiz.com is a great fit for a very established business in need of capital to expand. When we say “very established,” we mean that the average borrower that gets approved by Smartbiz has been in business for 10 years and has an annual revenue of $1 million.

Who should look elsewhere:

If your business is a startup or is even less than two years old and has remotely questionable finances, you should not apply to Smartbiz.

FundingCircle

FundingCircle is a peer-to-peer lending platform based in the UK. Since 2013, they have been offering loans from $25,000 to $500,000 and rates from 5.49% to 27.79%. Their origination fees are 1.49% to 4.99%. They do have some requirements on which businesses should apply and can get approved, but there are not overly stringent. They do require business as well as personal tax returns and bank statements to apply.

Who is the best fit for:

FundingCircle is great for decently-established businesses with over $150,000 in annual revenue. Since they do require bank statements and tax returns, your financials should be pretty buttoned-down.

Who should look elsewhere:

Startup or new business owners should look elsewhere unless their revenues are above $150,000 annually. They have enough business behind them to show bank statements and tax returns that paint a decent picture of where the business is headed.

LendingClub

They launched their small business loan program in 2014 and have since begun enforcing these requirements:

  • You must own businesses for at least two years.
  • Businesses must have at least $75,000 in annual revenue.

Their credit score requirements are not as stringent. They will provide a loan to almost any borrower, but the higher the credit score, the lower the rates will be.

Who is the best fit for:

LendingClub is a good fit for a somewhat-established business that has been around for at least two years. They offer loans to most borrowers, but you may or may not like the terms and rates depending on your personal credit.

Who should look elsewhere:

If you have been in the business for less than two years or show sales of less than $75,000, there is no reason to apply. Also, residents of West Virginia and Iowa are not eligible to apply for loans through Lending Club.

Prosper

Prosper does not actually offer small business loans, but we wanted to include them in this list because they offer unsecured personal loans, which you can use for your small business if you so choose. They offer rates from 7.95% to 35.99%, and their origination fees vary from 2.4% – 5%.

Who is the best fit for:

Startups or small businesses with little to no track record that will not be approved elsewhere may find it easier to get a personal loan and use it for the business. You don’t necessarily need stellar credit to get approved, but the better your personal credit, the better the loan rates and terms will be.

Who should look elsewhere:

If you want to keep your business and personal finances separate and do not want to put your personal assets on the line for your business, then you should forget about applying for Prosper. In some cases, people are putting everything on the line for their business, and this is a great option, but if you do not want to take that risk, this is not the right lender for you.

OnDeck

OnDeck offers a lot of money ($500,000 maximum) with minimal paperwork and low approval requirements. You must only have been in business for nine months and show revenues of $75,000 annually. However, their rates are rather high, and their terms are very short. Their rates vary from 19.99% to 39.99%, and they offer terms of anywhere from six months to two years at the most.

Who is the best fit for:

OnDeck is a great option for businesses that need cash fast but are very confident that they can repay the loan quickly as well. With rates as high as 39.99%, you will want to be sure that you can pay the loan off as fast as possible, so you will not pay an arm and a leg in interest.

Who should look elsewhere:

Someone with an established business and decent credit should look for another lender, as their rates and terms will generally be better. However, if you need cash today and you don’t mind a high APR because you know you will pay it back in a very short time, then this may be a good fit for your business.

LendingTree

LendingTree is actually not a lender – they are a lending platform that matches you with potential lenders. They made this list because they are a great source of loans for small businesses. When you apply on LendingTree, they will show you competing offers from various lenders to help you qualify for and choose the right loan that fits your need. LendingTree owners also own Match.com so that you can think of LendingTree as a Match.com for lenders and borrowers. Rates vary by the borrower but are generally 5.96% to 35.99%, depending on creditworthiness.

Who is the best fit for:

If your credit is a bit on the lower side, but you need funds for your business, then LendingTree will help you find a lender to get you the funds. However, you will pay a pretty hefty price for those funds.

Who should look elsewhere:

If you have an established business with a good track record and good personal credit, look elsewhere for better terms and rates.

BlueVine

BlueVine is one of a few invoice-factoring lenders. The way this works is that they fund the open invoices that you are awaiting payment for. If you operate on Net 30, 60, or 90, there are times when you may have a cash flow crunch due to unpaid invoices. BlueVine will fund your invoices until they are paid, and you will pay a fairly nominal fee in exchange, under the assumption that the invoice will be paid, and you will repay BlueVine within 90 days.

Who is the best fit for:

A small B2B business with a good track record but cash flow problems due to slow-to-pay customers.

Who should look elsewhere:

A company with unreliable customers or a brand new startup may not get approved or funded by BlueVine. They will look at your accounting history to determine the average age of invoice payment and customer reliability.

Kabbage

Kabbage is another lender that offers quick capital when you are in a bind and need funds fast. Their application requirements are rather lenient, but their rates are high.

Who is the best fit for:

If you have bad credit but need cash fast – Kabbage may be a good fit for you. They have no minimum credit score requirement, only a year business track record required, and only $50,000 in annual revenue. Their rates vary from 32% to 108%, so make sure you pay off this loan fast.

Who should look elsewhere:

If you have an established business with a good history and solid credit, look for another lender that offers lower rates. However, if you need cash fast and your credit is not great or a startup, Kabbage could be a great option!

Fundation.com

Fundation.com has a pretty high standard that must be met to get approved for funding:

  • Must show revenue of $100,000 or more annually.
  • Must show proof of having 3 or more employees.

If you meet these requirements, Fundation.com is quite competitive, and you should definitely apply!  Their rates range from 8-30% with an origination fee of 1-3% on your loan. Funding can be as fast as 3 days, which is definitely a plus.

Who is the best fit for:

Small businesses with several employees and a solid financial footing may be an excellent fit for Fundation.com. Their rates are extremely competitive, and they offer some great terms.

Who should look elsewhere:

If your business does not have 3+ employees (not including yourself) and a fairly solid financial footing, you will want to pass Fundation.com over and seek another lender. These guys have pretty strict requirements.

StreetShares

StreetShares is a peer-to-peer lending network that allows borrowers and lenders to connect on common interests and passions. This platform is often touted as a platform for veteran-owned businesses because it specifically targets veterans with funding their business ventures by partnering with the American Legion and the NVOBA (National Veteran-Owned Business Association). They do offer to fund all businesses and are not just limited to veteran-owned companies.

Who is the best fit for:

It is a great fit for smaller businesses that need a small amount of money and lenient repayment terms.

Who should look elsewhere:

If you need more than 20% of your annual revenue as a loan, you will not get it from StreetShares. For example, if your revenue is $100,000 annually, the most you could be approved for would be a loan of $20,000. Also, there are limitations based on geography and business type, so be sure that your business is not excluded before applying.

Fundbox

Fundbox is another invoice-factoring platform for improving cash flow in SMB’s. They offer funding in as little as one day on outstanding invoices. They lessen their own risk by tying into your accounting system to verify track record and keep an eye on invoices to see how fast customers are paying.

Who is the best fit for:

Small businesses that invoice on Net 30, 60, or 90 terms and are sometimes crunched for cash may be a great fit for Fundbox. They will fund invoices and charge a weekly payment (with a small fee included) until the invoice loan has been repaid.

Who should look elsewhere:

If you do not invoice clients regularly or do not use a proper accounting system, this will not be a good lender for your business. They require you to allow them to log in to your cloud-based accounting system to verify invoices and keep tabs on your finances.

Unique Scenarios & Recommendations

  • Small Business Loans with 10+ years of solid financials and employees

If your business has been around for more than ten years and you have solid financials, including revenues over $1M, and you have a few employees, then these are the top choices for business loans:

Smartbiz.com – these guys are the Wawanesa of lenders – they only take on very low-risk borrowers and can therefore offer incredible terms.

Fundation.com – requires three or more employees, but if you have that covered, they are an excellent choice of a lender as they are extremely competitive.

  • Business with 2+ years of solid financials

Whether you have employees or not, these are some great options for anyone who has been in business 2+ years and has solid financials:

FundingCircle – these guys offer very fair rates and terms to businesses with fair credit and financial situations. They are worth a look.

StreetShares – If your business is veteran-owned or has a great story to tell, then there is a good chance you can connect with someone at StreetShares over your passion and sell yourself accordingly. Just keep in mind that their loans are for smaller amounts and limited to only 20% of your annual revenues.

  • Business with 6 months to 2 years in operation (startup)

If you are a startup with a short track record, average credit score, and decent financials, here are some good options for you:

Prosper – Just about anyone can get a small business loan through Prosper, but keep in mind that the better rates and terms go to borrowers with better personal credit.

Lending Club – Similar to Prosper, Lending Club is pretty lenient about who they give money to, but if your credit score is not ideal, then your rates and terms will not be ideal, either. If you have great credit and a startup business, this could be a great fit.

  • A business that needs cash FAST, but the owner has poor credit

OnDeck – If you need cash fast, but you know you can repay the loan very quickly, OnDeck may be a good option. The terms are not pretty, the rates are high, and the repayment periods are rather short, but if you know you have poor credit and you know you can pay back the loan quickly, give these guys a serious look.

Kabbage – Kabbage similarly offers short term high rate loans to businesses in a bind who need cash quickly. Again, if you know you can pay it off within a few months, it could be an excellent option. If it takes you a year or more to pay off the loan, do not even consider a loan from Kabbage, as the interest could put you out of business.

  • A business that is doing well but struggles with cash flow

If this is your unique scenario, then you should consider an invoice-factoring option. If your customers take their sweet time and pay at the end of their 30, 60, or 90 day period and your cash flow suffers, and you need cash quickly, invoice factoring could be a great option. As long as you pay the invoice off as soon as you receive your customers’ funds and do not over-borrow, you will be in good shape. The two options we mentioned in this article are:

BlueVine – If you have decent credit and you need to fund larger invoices of $10,000 or more, then BlueVine may be the best fit for you.

FundBox.com – If you need to fund smaller invoices of $500-5,000 per invoice, FundBox.com may be for you.

As long as you pay these guys off quickly, your interest is very minimal.

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