ZenBusiness reviews its own products and services and compares them to others in the industry.
Compare the best small business loans as reviewed by ZenBusiness, or start your dream business today.
Ready to form an LLC? Starts at $0 + state fees and only takes 5-10 mins
Last Updated: August 27, 2025
Small business loans are a valuable tool for new and small companies with big goals and aggressive growth plans. The old adage “you have to spend money to make money” definitely applies to business growth — without adequate funds, you can’t buy the tools, equipment, or even advertisements you need to be able to serve more customers well.
But what makes for a good small business loan? And where can you find a trustworthy company to get one? This guide can help. We’ll walk through a variety of loan options, including term loans, lines of credit, and other forms of financial lending. We’ll also walk through some ways you can evaluate whether you should consider funding.
Many entrepreneurs hesitate to put their businesses in debt for any reason, especially if they’re recently formed startups or don’t have much business income yet. And that’s a very reasonable — and often wise — approach. After all, you can’t get sued for debts that you don’t have.
That said, not all debt is bad. A smart loan approach can help your business grow if the loan is used correctly.
Let’s consider some of the most common situations when entrepreneurs turn to small business loans to fund the next step in their company’s life cycle.
Of course, these are just a few of the reasons you might decide to seek a business loan. With this in mind, let’s talk through some of the best different lending options.
There are a variety of financing options available for small businesses. Knowing how the common financing options work before you seek credit approval can help you determine which choice will be the best fit.
Term loans are probably what most people first think of when they hear the term “business loan.” A term loan happens when you borrow a lump sum of money and pay it back on a set schedule (usually monthly payments, but you’ll agree on the specific terms with your lender). Term loans often have a fixed interest rate, and some have penalties or fees if you pay off your balance early.
A line of credit is a more flexible financing option: you get approved to borrow up to a certain amount, and you can draw on the funds as needed. For example, you might get approved to borrow up to $25,000 on your line of credit. In one instance, you might borrow $7,000 for a project, diminishing your available credit to $18,000 until you repay the balance. Later, you might borrow just $500 for a quick expense. In each scenario, you’d only pay interest on the money you borrowed (not the full available credit limit). You can borrow, pay back, and borrow again as needed. It’s not dissimilar to a credit card, but you can usually have a higher threshold for your available credit with a line of credit.
If your business frequently involves invoices, invoice factoring can help you get quicker access to the money you’re owed. With invoice factoring, your business sells its unpaid invoices to a factoring company, and in return, the lender company gives you cash for that invoice (usually a percentage of the amount due). It’s as if the lender buys your outstanding invoice at a discount in return for you getting those funds earlier.
A slight variation of this option is called invoice financing, where a lender gives you a cash advance on your outstanding invoices. You pay back the advance with interest (ideally when the invoice has been paid).
SBA loans are a type of loan we’ve included in this guide, so we won’t go into tons of detail here; in short, an SBA loan is a loan that’s partially backed by the Small Business Administration. You still work with a traditional lender participating in the SBA loan program, but since the SBA is backing your loan, the lender can give you more desirable financing terms than the typical loan.
Microloans are just what they sound like: small loans (usually taken out by small businesses). Often, these loans give financing of $50,000 or less, and they have shorter repayment terms than the typical loan. Not all banks and lenders offer microloans, but those that do often charge higher interest rates to ensure that they make money off the loan.
Merchant cash advances, sometimes called revenue-based financing, aren’t a traditional business loan. Yes, your business receives a lump sum of money to use for business growth. But instead of paying the lender back with monthly payments and interest, the lender takes a percentage of the money you make on sales. For example, you might borrow $10,000, and for the coming months, the lender might take 10% of the money you make from sales each month until the amount is paid off. Since your sales may fluctuate monthly, your repayment schedule will likely be more fluid than other financing types.
This list is by no means exhaustive, but it’s worth knowing the main differences so you can pick the best financing approach for your business. With these ideas in mind, let’s explore some of the best business loan options.
BlueVine was originally founded in 2013, and since their inception, they’ve helped fund over $16 billion in working capital for businesses. BlueVine currently offers a business line of credit as their primary in-house lending option. Small business owners can also get term loans through BlueVine’s lending partners, but here, we’ll focus on the line of credit offering.
With a BlueVine line of credit, you can apply for credit lines as high as $250,000. Interest rates start at 7.8% for top-qualifying borrowers. A credit line also comes with a complimentary BlueVine business checking account, which gives you instant access to approved draws. You can also link other bank accounts, if you prefer.
Since BlueVine’s line of credit requires you to be an LLC or corporation that has existed for at least twelve months with $10,000 in monthly revenue, they’re best suited for reasonably established companies.
OnDeck offers both a line of credit and a term loan offering, and with either choice, it’s possible to have access to your funds on the same day as you apply. Credit lines can give you funding access almost instantly, but even a term loan can be accessible quickly. With a credit line, you can get between $6,000 and $100,000 in funding. Term loans can get you between $5,000 and $250,000 in funding.
To qualify for OnDeck’s financing, you need to have been in business for at least one year. You also have to have at least $100,000 in revenue, a business checking account, and a personal credit score of at least 625.
One major perk to OnDeck is its strong history of customer reviews on sites like Trustpilot. Most customers report a smooth application and funding process with good customer support. It’s not surprising that the brand has financed over $15 billion across more than 150,000 businesses since 2006.
The biggest drawback to OnDeck is the high interest rates. While some businesses with very strong creditworthiness can get more favorable terms, the average interest rate for a line of credit is 57.1% APR. Term loans have an even higher average APR of 57.9%.
Getting funding as a very small or new business can be frustrating; many lenders require you to be in business for a while, or they have high revenue requirements that your business hasn’t reached yet. That’s not the case with FundBox. With FundBox, the minimum requirements are much more attainable. If you’ve been in business for at least three months, have at least $30,000 in annual revenue, and have a company checking account, you can qualify for their line of credit.
FundBox doesn’t publish interest rates on its business funding landing page, but we dug into the Help Center resources to find that rates start at 4.66% for a 12-week payment plan and rise from there. Eligible businesses will also get up to $250,000 in funding, and they offer flexible terms for repayment, which you’ll confirm when you draw funds from your available credit. Funds should be available to you within two business days.
FundBox has a strong showing of customer reviews, with over 3,500 5-star reviews on Trustpilot alone. As of this writing, they’ve served over 500,000 businesses and provided more than $6 billion in capital.
Biz2Credit is unique because it offers financing products directly to clients through its lending companies, Itria Ventures LLC and Cross River Bank, and it has partnerships with other lenders to help match small business owners to funding options. If you use Biz2Credit directly, you’ll find that it primarily serves well-established businesses.
Biz2Credit offers a variety of funding options, including revenue-based financing, business term loans, a line of credit, and even commercial real estate loans. With a line of credit, you can get up to $500,000 in funding and repayment terms up to 12 months. A term loan could get you anywhere from $25,000 to $1 million (repaid across 12 to 36 months). Finally, revenue-based financing could get you up to $2 million or more in funding (but the average amount is $110,000).
Biz2Credit has excellent customer feedback (a 4.7/5 average across over 15,000 Trustpilot reviews), and they’ve served over 200,000 businesses since 2007.
The biggest drawback to Biz2Credit is that its platform favors well-established businesses. Most of their products require at least $250,000 in annual revenue and at least 12 to 18 months in business (varies depending on your funding choice).
It’s not unheard of for a business to have trouble getting a business loan with reasonable terms; after all, a lot of the good options we’ve listed here require you to have at least $100,000 or more in revenue. If that’s you, then a 7(a) loan from the Small Business Administration (SBA) may be a good option for your small business financing.
Technically speaking, the SBA doesn’t actually lend you the money with a 7(a) loan. However, the SBA has set up a network of lenders who participate in the 7(a) loan program; since the SBA provides loan guaranties, these lenders are able to set up favorable lending terms for these program loans, and they can’t exceed a certain interest rate.
Not everyone is eligible for this program. To qualify, you:
There’s an APR cap on SBA guaranteed loans in this program. Currently, the maximum APR amount (as of this writing) is 15.5% for loans less than $25,000. This rate is subject to change, but it’s often better than rates from other lenders.
Getting funding for your small business can feel like a daunting prospect, and that’s understandable — there’s a variety of options available, each with its own pros and cons. Hopefully, this guide has helped you uncover some great business loan options to explore.
Related Topics
Yes, a start-up LLC can get a loan, but the funding options may be more limited than for an established business. Many traditional lenders prefer companies with at least a year of operating history and consistent revenue, but some lenders — such as those offering microloans, certain lines of credit, or revenue-based financing — may be more open to working with new businesses. Startups can also explore lenders with lower time-in-business requirements. For example, FundBox works with businesses that have only been operating for a few months.
Credit score requirements vary depending on the lender and type of loan. Some lenders require a personal credit score of 625 or higher, while others may be more flexible if you have strong business revenue or collateral. For example, OnDeck requires a 625 minimum for their loans, while other financing options may not state a specific minimum (or have a higher one). Generally, the higher your credit score, the better your chances for approval and favorable loan terms.
SBA loans can be more time-consuming to get than some financing types because they have strict eligibility requirements. For example, for a 7(a) loan, you’ll need to meet the SBA’s definition of a small business, operate for profit in the U.S., and demonstrate the ability to repay the loan. You also have to demonstrate that you can’t get your desired funding with favorable terms from other non-government lenders. Meanwhile, SBA microloan eligibility terms are set by each individual lender.
Additionally, the SBA loan application process can also take longer because lenders must follow SBA guidelines. That said, the effort can be worth it since SBA loans often offer lower interest rates and better repayment terms.
The “easiest” SBA loan to get depends on your situation. That said, microloans and smaller 7(a) loans tend to have more attainable requirements than larger loans. SBA microloans, for example, can provide up to $50,000 and are often used by startups or smaller businesses. While you still need to meet eligibility standards, these loans can be more accessible to businesses without extensive revenue or long operating histories.
It’s possible to get a small business loan with bad credit, but your options will be more limited, and interest rates may be higher. Lenders that focus on revenue-based financing or invoice factoring may be more willing to work with lower credit scores if your business shows strong sales or steady income.
If you don’t have business revenue yet, it can be very challenging to get a small business loan. You could be eligible for an SBA microloan. Alternatively, you could consider getting a business credit card instead. These cards tend to have lower funding thresholds than a traditional term loan or a line of credit, but they can give you some funds to get up and running. Plus, these cards can help you build your business credit, which can help you get access to larger loans in the future.
The cards aimed at businesses without revenue or with low credit scores tend to have high APR rates, so it’s best not to keep a balance on these cards if you can help it. If your business doesn’t have a revenue history yet, keep in mind that your personal credit score will have a big impact on your eligibility.
Compare Products
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. Our writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
Ready to Start Your LLC?
Open Your Business Bank Account