Best Banks For Small Business Loans

Written by jenndoddSeptember 28, 2021
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What are the Best Banks for Small Business Loans?

Whether your small business is just getting started or you've been in operation for a while, getting a small business loan is something you might be considering.

Business loans can help you with everything from having enough money to make payroll to expanding your business.

Either way, you could really use some direction.

That's why we're here.

With the right advice, you could easily be well on your way to getting approved for your small business loan. So, let's get to it.

How to Apply for the Best Small Business Loans

To apply for your small business loan, first you have to have all your ducks in a row.

That means documentation; and lots of it.

There are several items you're going to need, including:

  • Your loan application.
  • Your personal background and resume.
  • Your business plan.
  • Your income tax returns for at least two years.
  • Any documentation you might have regarding past and current business loans.
  • At least 12 months of personal and business bank statements.
  • Any documentation that details the cost and value of property that will be used to secure your loan.
  • Information about how the loan will be used.
  • A debt schedule.
  • Legal documentation, such as your business license, lease, contracts and agreements and articles of incorporation.

Once you have these things, you're ready to apply for your small business loan.

What Types of Small Business Loans are Available?

There are lots of them.

  • Term loans - This is a lump sum that has a fixed term and an amount for repayment. You'll be repaying principle and interest.
  • Business lines of credit - This is similar to a credit card and it can be used for virtually anything. There's a maximum limit you can borrow and you're charged interest on the amount you use, not on the maximum limit.
  • Equipment loans - You might want to consider this one if you need to buy equipment for your business. It's a great way to cover the cost of something really expensive and then spread the payments out over time.
  • Invoice financing - This is sometimes referred to as invoice factoring. If you have a lot of unpaid invoices, you can "sell" them to the bank at a discount.
  • Merchant cash advances - This is a loan that is lended in a lump sum, based on your projected sales. These comes usually come at a higher cost than other loans.
  • Commercial real estate loans - You can use a commercial mortgage (term loan) to pay for or develop commercial property.
  • Franchise loans - If you're opening a franchise, this is a loan to consider. It can be used to cover anything from your marketing costs to your franchise fee.
  • SBA loan - Small Business Administration loans are guaranteed and executed by lenders that are approved by the SBA. There are several options, including the SBA 7(a) loan program and disaster loans.

Our List of the Best Banks for Small Business Loans

American Express

Getting a loan from American Express is easiest if you are looking for a short-term loan and you are already an Amex cardholder.

Loans Offered:

  • Direct Deposit Business Loan
  • Credit Card Debt Consolidation

Details:

  • The minimum amount you can borrow is $3,500.
  • The maximum amount you can borrow is $75,000.
  • The loan term will be between 6 and 36 months.
  • The APR will be between 6.98% and 19.97%.

Bank of America

In order to get a loan from Bank of America, you have to have been in business for at least 2 years, make $100,000 or more in annual revenue and have a 670 or higher credit card score.

Loans Offered:

  • Secured business loans
  • Unsecured business credit lines
  • Auto financing
  • Specialized financing for healthcare providers

Details:

  • The minimum amount available to borrow is $10,000.
  • The maximum amount available to borrow is $100,000.
  • The loan term will vary, based on the type of loan you have, as well as other factors.
  • APRs starting at 4.75%

BBVA Compass

BBVA Compass is the best option on this list if you are looking for a small business loan in the healthcare industry.

There are some caveats though.

Their terms aren't always clear, and they don't offer an online preapproval process option.

You may qualify if you have a good to excellent personal credit history, at least one year in business and you are based in a state they service.

Loans Offered:

  • A convenience credit line
  • A traditional credit line
  • Commercial real estate loans
  • SBA 7(a) loan
  • SBA 504 loans

Details:

  • You can borrow up to $100,000
  • The loan terms are up to 120 months long.
  • APR ranges between 5% and 12%.
  • Healthcare businesses may qualify for up to 0.25% off their APR.

Biz2Credit

Biz2Credit got its start in 2007 for the purpose of matching small businesses with funding based on their needs.

They work with all kinds of businesses, but specialize in working with small business owners.

Loans Offered:

  • Merchant cash advances
  • SBA loans
  • Business lines of credit
  • Real estate financing
  • Franchise loans
  • Business credit cards
  • Equipment financing
  • Working capital loans
  • Unsecured loans
  • Bad credit business loans
  • Disaster loans
  • Business acquisition loans

Details:

  • You must have a monthly revenue of at least $10,000.
  • Your maximum loan amount is $5 million.
  • Your personal credit score needs to be at least 580.

BlueVine

BlueVine has always been a great option if you're in need of a business checking account.

But they do a lot of things well, including small business loans.

They've been around since 2013, and you have to have been in business for three months, have a minimum monthly revenue of $10,000 and have a minimum personal FICO credit score of 530 to qualify.

Loans Offered:

  • Business lines of credit
  • Invoice factoring
  • Term loans

Details:

  • Their invoice factoring credit lines can be as large as $5 million.
  • Loan disbursement can happen in as little as 24 hours.
  • They offer flexible lines of credit for small to medium-sized businesses and the lines go up to $250,000.
  • They may require a general lien on your business assets and/or a personal guarantee for your loan.
  • They do not accept brand-new startups.

Capital One

In 2019, Capital One granted more than $20 million in SBA loans. But that's not all they do.

They're known for their consumer programs, of course, but they've also heavily invested in their small business lending program as well.

To qualify, you need to have been in business for 2 years and open a business checking account with them.

Loans Offered:

  • SBA loans
  • Business lines of credit
  • Equipment financing
  • Vehicle financing
  • Commercial real estate loans
  • Business installment loans

Details:

  • Small business bank loans begin at $10,000.
  • There is no specific amount of time for repaying a line of credit, and you can have it open for as long as you need it.
  • There are no financial statements required if your loan is less than $50,000.
  • Their loans are fully customizable, so you can be sure you're getting exactly what you need.

Chase Bank

Chase Bank offers many small business loans, but where they stand out is in their equipment financing.

You have to make an appointment to get information on their fees and the cost of loans.

They only work with businesses in 23 states.

Their loan requirements include having a Chase checking account for your business, having a business plan and visiting a Chase location in person to apply.

Loans Offered:

  • Equipment financing
  • Small business loans
  • Business lines of credit
  • SBA loans
  • Commerical real estate financing
  • Business credit cards
  • Trade financing

Details:

  • The minimum amount for small businesses to borrow is $5,000.
  • The maximum loan amount they offer is $500,000.
  • The loan term can range from 12 to 84 months.

Citibank

Citibank does not have as many loan products as other lenders do.

Some small business owners appreciate that simplicity, but it might mean that they don't have the type of loan you're looking for.

Loans Offered:

  • Small business credit cards
  • Term loans
  • Business lines of credit

Details:

  • Their term loans range from $5,000 to $3 million.
  • Interest rates are fixed and terms can last up to 7 years with a personal guarantee.
  • Term loans can also be used to finance equipment.
  • Their lines of credit range from $10,000 to $3 million
  • They come with variable interest rates and revolving terms and require a personal guarantee.

Funding Circle

Funding Circle is an online lender that helps to connect small business owners with investors.

They have helped 81,000 businesses all over the world and have gotten them more than $11.7 billion in funding.

To qualify, you have to have been in business for at least two years and have a minimum FICO score of 620. You do not need to have a certain amount of annual revenue.

Loans Offered:

Term loans

Details:

  • Term loans up to $500,000 are available.
  • Loans are available in every state except Nevada.
  • The minimum loan amount is $25,000.
  • They do not accept startups.
  • It takes 5-10 business days to access your money.

Huntington National Bank

Even though Huntington National Bank is based in Columbus, Ohio, they work with business owners in Illinois, Indiana, Pennsylvania, Michigan, Kentucky, Wisconsin and West Virginia too.

Where they stand out is in their SBA loans.

They approve more of them than most other banks.

Loans Offered:

  • SBA loans
  • Term loans
  • Lines of credit
  • Real estate loans
  • Specialty loans for vet and dental practices

Details:

  • They are the #1 SBA lender in their region.
  • They offer flexible term financing.

Live Oak Bank

Live Oak Bank was given the #1 spot on the SBA's list of top SBA loan lenders in the United States in 2020.

Interestingly enough, they used to only provide loans to veterinary practices, but today, they offer them to all types of businesses.

They still specialize in SBA loans, but they offer many other financing products too.

Loans Offered:

  • SBA loans
  • U.S. Department of Agriculture loans
  • Commercial loans
  • Small business loans
  • Lines of credit

Details:

  • This bank has no physical branches and operates 100% online.
  • Loans start at $150,000.
  • Every loan is tailored to meet the business owner's needs.
  • They can combine SBA loans with conventional loans and lines of credit to get you the financing you need.

OnDeck

OnDeck is an online-only lender for small businesses.

They are typically utilized for short-term loans and have helped more than 100,000 small businesses get the financing they need.

In order to qualify, you need to have a FICO score of at least 600, been operating for at least one year and have a minimal annual revenue of $100,000.

Loans Offered:

  • Term loans
  • Lines of credit

Details:

  • Term loans go up to $500,000.
  • Lines of credit go up to $100,000.
  • Loan terms range from 3 months to 3 years.
  • Loans have both fixed and variable APRs.
  • Lines of credit have no origination fees.

PNC

If you've been in business for a while, you might want to consider PNC for your small business loan.

In order to qualify, you have to have been in business for at least three years.

This is longer than the requirements at other banks.

Loans Offered:

  • Term loans
  • Business lines of credit
  • SBA loans
  • Auto loans
  • Commercial real estate loans

Details:

  • Unsecured term loans range from $100,001 to $3 million, have a fixed interest rate and a term of up to 5 years.
  • For secured loans, rates can be fixed or variable and terms can last up to 7 years.
  • For lines of credit, their secured options range from $100,001 to $3 million and unsecured options range from $20,000 to $100,000.
  • Both have revolving terms and variable interest rates.
  • They are a preferred SBA lender, but interestingly enough, they don't do as many of these loans.

Rapid Finance

Rapid Finance is a great way to get a business loan, and they have a lot of options available too.

To qualify, you have to have at least $5,000 in monthly revenue and have been in business for 3-6 months.

We really like them because they have quick approval and loan disbursement within 24 hours.

Loans Offered:

  • Lines of credit
  • Merchant cash advances
  • SBA bridge loans
  • Asset-based loans
  • Commercial real estate loans

Details:

  • Loans range from $5,000 to $1 million.
  • Your credit score may not matter because they approve people with all kinds of credit scores.
  • Instead of APR, they offer loans that have a monthly fee.

Regions Bank

If your business is just getting started, Regions might be the right bank for you.

They have low annual revenue requirements and you don't have to have been in business very long in order to qualify for a loan.

If you're in need of an SBA loan, this is a great option, but only if you already have a relationship with them.

Loans Offered:

  • Term loans
  • Lines of credit
  • SBA loans

Details:

  • They're an SBA preferred lender.
  • They work with non-profit and religious organizations all the time.
  • They offer both secured and unsecured loans.
  • Loans between $15,000 and $1 million are available.
  • Loan terms are between 12 and 60 months.
  • You need a minimum credit score of 600 to qualify.

SunTrust

SunTrust is now operating under the name Truist.

They offer some of the largest business loans available, and their max loan is $10 million.

You must have been in business for at least two years and have a satisfactory credit history.

Loans Offered:

  • Business credit card
  • Term loans
  • SBA loans
  • Lines of credit

Details:

  • Personalized funding is available.
  • They offer fixed and variable rates.
  • Loan amounts range from $10,000 to $10 million.
  • APR ranges from 4.54% to 8.25%.
  • Loan terms range from 36-60 months.

TD Bank

If you're a small business owner in Washington DC or one of 15 other states, you may want to consider TD Bank.

They do not disclose much information until you actually apply for your loan.

So they are not clear about how many years you need to be in business, what your minimum credit score should be or what your minimal revenue is required to be for approval.

Loans Offered:

  • Term loans
  • U.S. Department of Agriculture loans
  • Lines of credit
  • Commercial mortgages
  • SBA Express loans
  • SBA 7(a) loans
  • SBA 504 loans

Details:

  • Lines of credit range from $25,000 to $500,000.
  • Term loans range from $10,000 to $1 million, but this does not include SBA loans.
  • Your terms will vary based on the type of loan you get.
  • Loan approvals can occur in as little as 48 hours.

U.S. Bank

While U.S. Bank has less brick and mortar locations than other, similar banks, they also have some great loan products.

If you're a startup with collateral, this is definitely one to consider.

You may be able to qualify for an SBA loan through them if you've been in business less than a year.

Loans Offered:

  • SBA loans
  • Term loans
  • Business lines of credit
  • Equipment loans
  • Commercial real estate loans

Details:

  • Their secured term loans can be as high as $1 million with fixed rates.
  • They have a Quick Loan that is available for fast approval and it has a maximum of $250,000.
  • Their lines of credit go up to $1 million and have an interest only payment option available.
  • Equipment loans can go as high as $500,000.
  • They have many commercial real estate loan options with flexible repayment terms and amortizations up to 25 years.

Wells Fargo

Wells Fargo may be last on our list, but they're one of the best-known banks in the country.

They specialize in working with small business owners, but you need to be a current customer with a year of banking history in order to apply.

You also need to have a credit score of at least 670.

Loans Offered:

  • Term loans
  • Equipment loans
  • SBA loans
  • Unsecured and secured business lines of credit
  • Prime line of credit

Details:

  • Loans range from $10,000 to $100,000.
  • Loan terms are between 12-60 months.
  • APR ranges from 6.25% to 22.99%.
  • Some loans may require automatic repayments.

Want an Easy Way to Compare Business Loans? Try SmartBiz

It could take you a long time to comb through all your financing options.

But if you need a small business bank loan, you might want to start with SmartBiz.

SmartBiz is not a bank; they're service that works with banks to help small business owners find traditional bank loans.

Here's what you need to know:

  • SmartBiz lets you compare SBA loans and regular bank loans.
  • They can help you get a quicker turnaround if you're applying for an SBA loan.
  • They have a simple online application.
  • Your loan amount may range from $30,000 to $5 million.
  • APR ranges from 4.75% to 7%.
  • You have to have a minimum credit score of 650.
  • Your loan term can be 10-25 years long.
  • You have to have been in business for 2 or more years, be a U.S. citizen or permanent resident, have $50,000 or more in annual revenue and have had no outstanding tax liens, bankruptcies or foreclosures within the last 3 years.

How to Get a Small Business Loan

What are some things that make it more likely for you to qualify for small business loans? We're glad you asked.

Here are some tips that will help:

  • You'll do better with an existing bank relationship.
  • You should have a good personal credit score - most banks require it.
  • You should have enough revenue coming in on a monthly or yearly basis.
  • You should have been in business for a long enough period of time.
  • You may or may not need to have collateral that you're willing to put up to guarantee the loan.

Small Business Loans - Frequently Asked Questions

Are There Alternatives to Bank Business Loans?

Most small business owners go to larger banks to get their business loans. But that doesn't mean you need to follow suit.

There are many alternatives for getting a small business loan - even unsecured business loans - you just need to know where to look.

Try the following:

  • Community banks
  • Credit unions
  • Online lenders
  • Microlenders

All of the above could be a great option for you if you're in need of a bank loan for your business.

Who Can Apply for a Small Business Loan?

You can. As long as you're a business owner.

You just need to show the lender that your business is well-worth the risk. To get started:

  • Figure out how much money your business needs.
  • Make sure your credit score is in tip-top shape.
  • Make sure you have a strong business plan.

Can You Get a Small Business Loan if You Have Bad Credit?

In short, yes. But you're going to have limited options.

You're also probably going to pay higher interest rates than you would if your credit score was good, very good or excellent.

Lenders who offer small business loans to people with not-so-great credit are going to look more closely at your business plan to make sure everything is in order.

They're also going to check your revenue records very carefully, and you may not be able to borrow as much money as other businesses.

How do You Choose the Best Small Business Loan?

When choosing from the best banks for small business loans, there are a couple of things you'll want to consider:

  • Know what the eligibility requirements are. This will let you know your chances of being approved. Take a close look at the required minimum credit score, the required minimum years in business and how much revenue is required.
  • Figure out what type of loan you need and look for it. Your business financing needs to meet your needs.
  • Keep the costs in mind because you'll want to factor those into consideration. You'll definitely want to choose a lender that has the lowest costs.
  • Finally, make sure they have good customer service. That way, you'll know that if you need help, you'll be able to get it without a lot of hassle.

How do You Qualify for Small Business Bank Loans?

Every bank has their own specifications for qualifying.

But if you're denied, you're not without options.

You could always take out a personal loan, learn more about your local resources for small business owners or even get a business credit card.

Another option is to apply for a small business grant.

That can be a great way to get funding for your business without having to go into debt because you wouldn't have to pay it back.

Before We Go, Some Words Of Advice About the Best Banks for Small Business Loans

If you're having trouble securing small business financing, we recommend getting a mentor.

A mentor is someone who has been in your shoes and they can help you in a lot of ways.

They can look over your business plan, connect you with other resources and more.

The good news is that for most business owners, the right financing is out there. We hope we've given you a useful tool to help you find it.

Written by 

jenndodd