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The Top Small Business Loans of 2022

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Compare the Top Small Business Loans on Lantern's Marketplace

OnDeck
About the Lender

OnDeck offers Term Loans and Lines of Credit specifically tailored to meet your needs. Apply online or through a dedicated Loan Advisor in minutes and, if approved, you can receive funds in as little as 1 business day.
  • Fast & easy application process that takes less than 10 minutes to complete
  • Multiple flexible financing options with hassle-free repayments automatically withdrawn
  • OnDeck reports to credit bureaus so you build business credit with timely payments

Disclaimer

This does not constitute an actual commitment to lend or an offer to extend credit.

Funding Circle
About the Lender

As a global leader in business term loans, Funding Circle takes a holistic approach to finding the lowest rates and most favorable terms for your business financing needs. [Funding Circle is both a term loan provider and a small-and-medium business (SMB) lending marketplace.]
  • Flexibility (No pre-payment penalties and the ability to apply for additional financing after 6 on-time payments *sole props require 12 on-time payments)
  • Long term lengths (up to 7 years)
  • Funds deposited to your account in as little as 3 days
  • Fixed rates locked in for the duration of the loan
  • We report to Commercial Credit Bureaus
  • Monthly payment payback structure for all loans

Disclaimer

This does not constitute an actual commitment to lend or an offer to extend credit.

Seek Business Capital
About the Lender

Seek Business Capital specializes in providing funding for startups & early stage business owners
  • Get pre-approved within minutes
  • No hard credit pull
  • Funding range: $10,000- $250,000.
  • Seek Business Capital provides funding approvals exceeding $300 million per year

Disclaimer

Seek Business Capital provides no guarantees of funding based on funding proposals. All offers are subject to final bank approval.

Fundera
About the Lender

Fundera is a small business loan aggregator

Lendio
About the Lender

Lendio is among the best in the nation for their small business loan marketplace. After you fill out a single application, they simplify the entire lending process by bringing you hand-picked offers curated from a list of over 75 lenders. Their technology narrows down a list of options that meet your lending criteria and then you get to work with a dedicated funding manager to help you choose the best one for your business.
  • Free 15 minute application
  • Gain access to 75+ lenders
  • Work with a dedicated funding manager to help you through the process
  • Get funded in as little as 24 hours

Disclaimer

This does not constitute an actual commitment to lend or an offer to extend credit.

Biz2Credit
About the Lender

Biz2Credit provides flexible funding to match small businesses’ needs as they take on an ever-changing economic landscape. Ally online or with a Funding Specialist who can help your business choose the right funding. If approved, get funds in as little as 1 business day.
  •   Fast online application takes as little as 5 minutes to complete
  •   Rated "Best for Business Loan Options" by Forbes Advisor, Money.com, and CNBC
  •   Over 15,0000 5-star reviews from real business owners and over $7 billion funded so far

Disclaimer

This does not constitute an actual commitment or an offer to extend credit. Rates, amounts, and terms are subject to application, qualifications, and approval.

How does Lantern by SoFi work?

1

Search

Use our quick online search and refine your results to find the financial products and rates to meet your business needs.
2

Choose

Compare rates from top small business lenders who match your qualifications and needs as a borrower. Apply for a small business loan with your lender(s) of choice.
3

Get funded

Find out if you're approved as soon as that day, and receive funding in as little as 24 hours.

Small Business Loan Uses

Small business loans can be used for a wide variety of reasons. Whether you need to purchase equipment or expand to new locations, there are options available. Small business owners might consider a loan to:
  • Buy commercial real estate
  • Purchase or repair equipment
  • Cover working capital expenses
  • Buy inventory at a discount and/or in preparation for a busy season
  • Expand the business
There are loans designed for specific uses (e.g. equipment financing) and loans that may be used for a variety of business expenses (e.g. SBA 7(a) loans). Comparing the options can help you figure out what type of loan and what lender best suit your small business needs.

Compare Common Types of Small Business Loans

There are numerous loan options to support small businesses at every point in their journey. Some loans are geared toward supporting startups, while others help established companies continue to grow. Whatever your business goals, we can help you find the right financial solutions. Here are a few options you may want to consider, depending on your specific needs. For more information, head over to our complete guide on Different Types of Business Loans.

How Do Small Business Loans Work?

Small business loans can typically only be used for business-related expenses. Like other types of loans, if you’re approved, the lender will provide you with a lump sum of money, which you’ll repay with interest over a predetermined amount of time. The type of loan you choose may determine what specific expenses you can address with the funds. For instance:
  • Business Line of Credit
    • May be used for any type of purchase
    • Often best for covering gaps in cash flow or emergency expenses
  • Commercial Real Estate Loan 
    • Funding to purchase, develop, or construct buildings or land for business use
  • Equipment Financing
    • Loans for any type of business-related equipment (e.g. computers, work vehicles, desks)
    • Equipment typically serves as collateral on the loan
  • Invoice Factoring and Financing
    • May help improve cash flow when waiting on payment from unpaid invoices
    • Functions as a cash advance
  • Microloan
    • Purchase allowances vary by lender
    • Generally used for smaller expenses
  • Term Loan 
    • May be used for any business purchase
    • Available in long-term and short-term options
Note: The above should be considered common practices. Different lenders may vary.If the loan type doesn't dictate what you may do with it, you should still consider your needs when choosing which loan to get.

How Do SBA Loans Work?

SBA loans are loans backed by the Small Business Administration; they're not loans from the SBA or government. The SBA works with lenders to help lower the lenders' risks while providing the best opportunities for small business owners. Because the risk for lenders is lower, SBA loans tend to have favorable interest rates and terms. However, this can also make them highly competitive. Types of SBA loans include:
  • 7(a) Loans
    • Can be used for nearly any business need, including but not limited to:
      • Working capital 
      • Equipment purchases
      • Commercial real estate
      • Renovating an existing building 
      • Establishing or acquiring a business
      • Refinancing existing business debt (under certain conditions)
    • Maximum amount of $5 million
    • Must do business in the US, have invested equity, and have used other financial resources, among other requirements
  • 504 Loans
    • Certified Development Companies (CDCs) work with the SBA to provide up to $5 million for growing businesses
    • Provides funding for things like:
      • Purchase or construction of existing or new facilities
      • Equipment and machinery  Modernizing land, streets, and parking lots
      • Renovating existing business facilities
    • CANNOT be used for:
      • Working capital or inventory 
      • Consolidating, repaying or refinancing debt 
      • Speculation or investment in rental real estate
    • Long-term, fixed-rate loans
    • Eligible businesses must be in the US, be worth less than $15 million, and have an average net income of less than $5 million
  • Microloans
    • Nonprofit, community based lenders work with the SBA to provide small businesses with funds to repair, renovate, or expand their operation
    • Worth up to $50,000, but average amount is $13,000
You can use the SBA’s Lender Match portal to get started on finding SBA-backed financing for your business.

Where Can I Get a Small Business Loan?

You can generally find small business loans at banks, credit unions, online lenders, and peer-to-peer (P2P) networks. Each type of lender has unique requirements, as does each specific lender.There is no one best place for small business loans. When applying for small business loans, consider each lender’s qualifications and potential offerings:
  • Banks
    • Refers to traditional brick-and-mortar banks (though they may also have online services
    • Could have more favorable terms and rates compared to online lenders, especially if you already have a relationship with the bank
    • Application process is often lengthy
    • May have more stringent eligibility requirements
  • Credit Union
    • Member-owned, non-profit entities that may have brick-and-mortar locations as well as online services
    • Often have competitive terms and rates
    • Frequently have flexible qualification requirements for members
    • More likely to be focused on helping the local community
  • Online Lender
    • Applications often reviewed quickly
    • Funds typically dispersed in a matter of days
    • Can easily compare lenders
    • May be more open to those with poor credit or a short history
    • Often have higher APRs than other options
  • P2P Network
    • Business owners are matched with investors on the P2P platform
    • Odds of qualifying may be higher compared to other types of lenders, even with bad credit
    • Fast application and quick time to funding
    • Could have transaction fees others don't
    • Platforms facilitate transfers and payments
Note: The above is general information. Different lenders may vary.Choose your lender based on your unique business needs. Don't hesitate to compare options before applying, and pre-qualify when you can.

Who Can Apply for a Small Business Loan?

If you own a small business, chances are you can apply for a small business loan. However, loan requirements vary by type of loan and individual lender.You're most likely, though not guaranteed, to be approved for a loan if:
  • You have good business and personal credit scores.
  • You have a strong business plan.
  • Your company is well-established.
  • Your revenue history is acceptable.
  • You have a low debt-to-income (DTI) ratio.
Lender requirements vary across the board, and there are options for small business owners who may not have the strongest credit profile. For example, you may consider offering up collateral as a means to reduce risk for the lender. If you default on the loan, the lender takes what you’ve provided as collateral. Equipment financing is a type of collateral-based business loan.Another option is to apply for loans that have less risk for the lender because they have shorter terms. Business owners with low credit may consider a short-term business loan or line of credit to finance a purchase or fill in gaps in cash flow or inventory. If you’re finding it hard to qualify because you own a brand new business, don’t fret. There are business loans made specifically for startups. Because startups can present higher risk to lenders, interest rates can be higher than other forms of financing. 

Steps to Apply for a Small Business Loan?

Small business loan application processes may differ by lender and loan type. However, you can expect a few common steps when applying for business loans:
  1. Determine your business need(s), calculate the costs, and prioritize.
  2. Choose the type of loan that most aligns with your needs and qualifications. 
  3. Decide which type of lender(s) you'd like to use. Some possible choices include:
  4. Evaluate your business and personal credit history against the minimum requirements of the lenders you're considering to determine what you'll qualify for. 
  5. Prepare relevant documentation like bank statements, legal documents, business expenses, and tax returns. 
  6. Compare small business lenders.  
  7. Apply with the lender(s) that suit your business needs and qualifications.

Can You Get a Small-Business Loan With Bad Credit?

You may be able to get a small business loan with bad credit if you can provide collateral and/or are willing to take less favorable rates and terms. Eligibility varies by lender, though online lenders and credit unions may be more able to work with you.If you have bad credit or don't meet other standard requirements, you may consider looking for alternative funding while you establish your business and build your credit. Other routes could include crowdfunding, small business grants, and venture capital.

How Do I Choose the Best Small Business Loan for My Needs?

There are many things to consider when choosing the right small business loan for you. Determining factors may include, but aren't limited to:
  • How much funding you need: Small business lenders have different maximum loan amounts they’re willing to lend to borrowers. 
  • Why you need it: Is it an emergency expense that requires a quick application and time-to-funding? Or is it a larger expense that requires more time to compare rates and lenders?
  • The type of loan you want: Different business loans are crafted for different business uses. Think about what best aligns with your qualifications and the reason you need funding.
  • Whether you meet requirements: Try to be realistic with yourself about the strength of your credit and business history. Focus your attention on the types of loans and lenders that can offer you the best rates for your qualifications.
  • How much of a monthly loan payment you can afford: Running a business is expensive. You’ll want to make sure you find a loan with rates and terms that allow you to make the monthly payments without cutting too deep into your business’ cash flow.
If you have a history with a lender that offers multiple types of loans, they may be your best option when comparing small business loans. You could also consider working with a financial advisor before applying.

Can I Get Free Money for My Business?

Free money for business owners typically comes in the form of small business grants. Grants are awarded by private companies, community organizations, charitable groups, and more.Small business grant requirements vary by grantor and may include:
  • A strong business plan
  • Being in a particular industry
  • Being a for-profit (or non-profit) company
  • Showing a commitment to the grantor's mission
  • Being of a particular background (e.g. minorities, veterans, women)
While some small business grants are easy to apply for, some can require extremely lengthy applications—a dozen pages or more. For the latter, it may be worth hiring a grant writer to save you time and ensure the requirements are all met.

Additional resources

The Top Small Business Loans of 2022: FAQ

What credit score do I need to get a small business loan?
What are the interest rates for small business loans?
What's the average term for a small business loan?