Starting a small business requires a considerable amount of capital, which can be challenging to arrange without a loan. However, finding the right lender can be a daunting task for business owners who are new to the world of finance. Don’t worry! In this article, we have compiled a list of top small business loan lenders that you can consider for financing your business.
Introduction
Welcome to our article about top small business loan lenders in 2021. We understand how challenging it can be to find the right loan for your business. That’s why we have compiled this list to save you time and help you make a well-informed decision.
In this article, we will cover the best small business loan lenders, their offerings, loan requirements, and how to apply for a loan. We will also answer common questions about small business loans to ensure that you are well-informed about the loan process.
At the end of the article, we will provide you with a table that contains all the essential information about the top small business loan lenders. So, without further ado, let’s dive in!
What is a Small Business Loan?
A small business loan is a type of financial aid offered to entrepreneurs to help them start, grow, or expand their business. The loan can be used to purchase inventory, equipment, or real estate, or to cover operational expenses such as payroll and rent.
Small business loans are provided by banks, credit unions, and other financial institutions. The terms and conditions of the loan vary from lender to lender, and it is essential to choose a loan that suits your business needs.
What Are the Benefits of a Small Business Loan?
Small business loans offer numerous benefits to entrepreneurs, including:
- Access to capital: Small business loans provide entrepreneurs with the capital they need to start or grow their business.
- Lower interest rates: Small business loans typically have lower interest rates than credit cards or other high-interest loans.
- Flexible repayment terms: Many small business loans offer flexible repayment terms, making it easier for entrepreneurs to repay the loan.
- Build business credit: Making on-time payments on a small business loan can help entrepreneurs build their business credit, making it easier to obtain financing in the future.
Top Small Business Loan Lenders
Here are some of the top small business loan lenders that you can consider:
Loan Provider |
Loan Type |
Loan Amount |
Loan Term |
Interest Rates |
|---|---|---|---|---|
1. Kabbage |
Line of Credit |
Up to $250,000 |
6 or 12 months |
24% to 99% |
2. BlueVine |
Invoice Factoring, Line of Credit |
Up to $5 million |
6 to 12 months |
0.25% to 1.35% per week |
3. Funding Circle |
Term Loans |
Up to $500,000 |
6 months to 5 years |
4.99% to 22.99% |
4. OnDeck |
Term Loans, Line of Credit |
Up to $500,000 |
3 months to 3 years |
9.99% to 99.99% |
1. Kabbage
Kabbage is an online lender that provides small business loans through a line of credit. They offer loans up to $250,000, and the loan term is 6 or 12 months. Kabbage charges a monthly fee of 1.5% to 10% of the loan amount, and interest rates range from 24% to 99%. The application process is entirely online, and approval can take as little as 10 minutes.
Pros:
- Flexible loan terms
- Quick application process
- No minimum credit score required
Cons:
- High-interest rates
- Monthly fees
2. BlueVine
BlueVine is a lender that offers invoice factoring and lines of credit to small businesses. They provide loans up to $5 million, and the loan term is 6 to 12 months. BlueVine charges a weekly fee of 0.25% to 1.35% of the loan amount, and interest rates range from 15% to 68%. The application process is entirely online, and approval can take as little as 24 hours.
Pros:
- No prepayment penalties
- No minimum credit score required
- Quick application process
Cons:
- High-interest rates
- Weekly fees can add up quickly
3. Funding Circle
Funding Circle is a peer-to-peer lender that offers term loans to small businesses. They provide loans up to $500,000, and the loan term is 6 months to 5 years. Funding Circle charges an origination fee of 3.49% to 7.99% of the loan amount, and interest rates range from 4.99% to 22.99%. The application process is entirely online, and approval can take as little as 24 hours.
Pros:
- No prepayment penalties
- No minimum credit score required
- Lower interest rates compared to other lenders
Cons:
- Origination fees can be high
- Loan qualification criteria can be strict
4. OnDeck
OnDeck is a lender that offers term loans and lines of credit to small businesses. They provide loans up to $500,000, and the loan term is 3 months to 3 years. OnDeck charges an origination fee of 2.5% to 4% of the loan amount, and interest rates range from 9.99% to 99.99%. The application process is entirely online, and approval can take as little as 24 hours.
Pros:
- No prepayment penalties
- Quick application process
- Lower interest rates compared to other lenders
Cons:
- Origination fees can be high
- Higher interest rates for shorter loan terms
Frequently Asked Questions
1. How Do I Qualify for a Small Business Loan?
The eligibility criteria for a small business loan vary from lender to lender. However, most lenders will consider factors such as your credit score, revenue, and time in business when evaluating your loan application.
2. How Much Can I Borrow?
The loan amount you can borrow depends on the lender and your business’s financial health. Most lenders offer loans up to $500,000, but some lenders offer larger loans up to $5 million.
3. What Are the Repayment Terms for a Small Business Loan?
The repayment terms for a small business loan vary from lender to lender. However, most lenders offer loan terms ranging from 6 months to 5 years.
4. How Long Does it Take to Get Approved for a Small Business Loan?
The time it takes to get approved for a small business loan varies from lender to lender. Some lenders provide approval within 24 hours, while others may take several weeks.
5. Do I Need Collateral to Get a Small Business Loan?
Some lenders require collateral to secure the loan. However, not all lenders require collateral, and some lenders offer unsecured loans.
6. What Are the Interest Rates for Small Business Loans?
The interest rates for small business loans vary from lender to lender. However, most lenders offer interest rates ranging from 4% to 99%.
7. Can I Get a Small Business Loan with Bad Credit?
It is possible to get a small business loan with bad credit, but it may be challenging. Some lenders offer loans to borrowers with bad credit, but the interest rates may be higher, and the loan terms may be less favorable.
8. What Are the Fees for Small Business Loans?
The fees for small business loans vary from lender to lender. Some lenders charge origination fees, application fees, prepayment penalties, or other fees. It is essential to read the loan agreement carefully to understand the fees associated with the loan.
9. What is the Difference Between a Term Loan and a Line of Credit?
A term loan is a lump sum of money that is repaid over a set period, while a line of credit is a revolving loan that can be used and repaid repeatedly.
10. Can I Use a Small Business Loan for Personal Expenses?
No, a small business loan should only be used for business-related expenses.
11. What Happens if I Can’t Repay the Loan?
If you cannot repay the loan, the lender may take legal action to recover the amount owed. It is essential to read the loan agreement carefully and understand the consequences of defaulting on the loan.
12. Can I Apply for Multiple Small Business Loans?
Yes, you can apply for multiple small business loans. However, it is essential to manage your debt responsibly and avoid taking on more debt than you can handle.
13. Can I Get a Small Business Loan if I Am a Startup?
Yes, some lenders offer loans to startups. However, the loan qualification criteria may be stricter, and the interest rates may be higher.
Conclusion
Choosing the right small business loan lender is crucial for the success of your business. In this article, we have provided you with a list of top small business loan lenders, along with their offerings, loan requirements, and how to apply for a loan.
We hope this article has been helpful in your search for the best small business loan lender. Remember to read the loan agreement carefully before signing up for a loan and only borrow what you can afford to repay.
If you have any questions or need further assistance in finding the right loan for your business, feel free to reach out to us. We are always here to help!
Closing Disclaimer
The information provided in this article is for educational purposes only and should not be construed as financial advice. Please consult with a financial advisor or lender to determine the best financial solution for your business needs.