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If you’re starting or expanding your business, getting a small business loan is essential. However, it can be overwhelming to figure out where you should apply and what type of loan is the best fit for your small business—not to mention that you should shop around to get the best offers. To help you out, we’ve researched over 30 different lenders and loan products and compiled a list of some of the best small business loans currently available.
Featured Best Small Business Loans
Best Equipment Loans
Investing in long-term equipment and machinery is vital for your business, so we’ve listed some of the best options available for small business owners looking to finance equipment.
SBA 7(a) and 504 Loans
Provided you have good credit, SBA 7(a) and 504 loans offer some of the most competitive rates and terms in the market, making them a fantastic choice for purchasing equipment or machinery. Interest rates on 7(a) loans are capped at 6% to 9%, and 504 loans currently have interest rates around 4% to 5%, which is well below the market average on similar general purpose and equipment loans. With loan amounts up to several million, these loans can be used to purchase any expensive or long-term equipment you might need for your business. While you’ll need a good credit score to apply for either loan, the 504 loan can also be used for startups and new businesses.
One downside to getting an SBA loan is the funding time and application process. Many SBA loans require a lot of paperwork and documentation to apply, and you’ll need to get in touch with a bank in your area that makes these types of loans. Since the application is intensive, it will usually take one to a few weeks to receive a decision from the SBA, and then several more days to weeks to receive funding.
Best for: Borrowers with strong credit profiles and financially established businesses. Startups are eligible to apply to the 504 loan program.
- 4% – 9% interest rates
- Loans up to several million
- Terms up to 25 years
- Funds in several weeks
- Strict eligibility requirements
Currency is a great option for an equipment loan if you can’t qualify for an SBA or bank loan due to your credit score or if you need to borrow more than $5 million. This lender specializes in equipment financing with loan amounts up to $15 million, so it’s an especially good choice for expensive equipment or machinery purchases. You can apply for term loans, lines of credit and cash advances through this lender. If you’re applying for a term loan, the only requirements are either a minimum credit score of 475 for short-term loans or $100,000 in annual revenue for long-term loans, making either a favorable solution if your credit score is not great.
One thing we like about Currency is that the lender also partners with eBay, allowing buyers to apply for financing directly through eBay’s website. This makes Currency very convenient if you frequently use eBay to buy equipment for your business. Through this platform, you can receive a loan decision within a few minutes, and if approved, you’ll be put in touch with a Currency loan specialist to finalize your funding options. The funding can be directly applied to your eBay purchase.
Best for: Borrowers who need to finance eBay equipment purchases, and borrowers with great credit profiles can qualify for very low rates. Also good for borrowers who need up to $15 million.
- 3% – 35% APRs
- Loan up to $15 million
- Loan terms up to 6 years
- Funds in as fast as 1 day
- Lenient eligibility requirements
Best Working Capital Loans
Working capital loans can be used for inventory, accounts payable and wages. Below, we list some of the best options for working capital loans and lines of credit for small businesses.
Bank Line of Credit and SBA CAPLines
If you need financing for working capital, bank and SBA lines of credit are among the best available, with line amounts up to several million dollars and great rates — but you’ll generally need a good credit score and a financially sound, established business to qualify. The SBA CAPLines program offers lines of credit up to $5 million, which is higher than you’d find at almost any alternative lender, and it has low interest rates between 6% to 9% (and depending on the bank where you apply, these rates could be even lower). CAPLines can be used for contracting work, seasonal inventory, construction and any other working capital needs.
Banks and credit unions can offer similar lines of credit with higher credit limits, but these may be harder to qualify for than the SBA program. If you already have a working relationship with a bank or credit union in your area, you should speak with them first about getting a working capital loan or line of credit. Many local banks and credit unions are eager to work with businesses in the community and may be more likely to overlook any flaws in your application. They can also offer lines of credit and loans up to several million dollars. At the end of of the day, you would be hard-pressed to find better options outside of bank and SBA working capital loans.
Best for: Creditworthy borrowers with established businesses who need access to significant capital, up to several million dollars.
- Competitive APRs
- Line amounts up to several million
- Terms up to several years
- Funds in several weeks
- Stricter eligibility requirements