Last Updated: October 2024

Best Business Loans July 2024

Connecting you to top-rated business lenders for fast access to capital no matter your success stage.

How to Qualify for a Business Loan

  1. Check credit scores
    • A personal credit of 675 or higher can qualify you for the best rates
    • Lenders may go as low as 500
  2. Review business history
    • Six months to two years of business is typically the minimum before you can qualify
    • Preparing real estate, equipment, or inventory as collateral can help your chances of approval
  3. Collect business transactions
    • The typical revenue requirement is $100,000 to $300,000 per year
    • 3+ months' worth of business checking account statements may be required
  4. Compare lenders
    • Improve your chances of securing a low rate by requesting quotes from multiple lenders

Types of Business Loans

Term Loans

Perfect for large, one-time expenses like purchasing equipment or expansion. They come with fixed interest rates and set repayment terms.

SBA Loans

Backed by the Small Business Administration, these loans offer lower interest rates and longer repayment terms, making them ideal for small businesses seeking affordable financing.

Business Lines of Credit

A flexible funding option for ongoing expenses. You only pay interest on what you borrow, which is great for managing cash flow and unexpected costs.

Invoice Financing

Get an advance on outstanding invoices. This provides quick access to funds without waiting for customer payments, useful for businesses with longer payment cycles.

Merchant Cash Advances

Receive a lump-sum payment in exchange for a percentage of future sales. Fast approval and funding make this ideal for businesses with consistent credit card sales.

Business Lender Interest Rates, Terms, and Loan Amounts

Interest Rates

Interest rates vary widely depending on the type of loan and the lender. Generally, SBA loans offer the lowest rates, while merchant cash advances tend to have higher rates. Always compare rates to find the most cost-effective option.

Loan Terms

Loan terms can range from a few months to several years. Term loans and SBA loans typically offer longer repayment periods, while lines of credit and merchant cash advances have shorter terms. Choose a term that aligns with your financial planning and repayment ability.

Loan Amounts

The amount you can borrow depends on the loan type and your business's financial health. Term loans and SBA loans usually offer larger amounts, while lines of credit and invoice financing might be more modest. Assess your business needs to determine the appropriate loan amount.

Choosing the Right Loan

  1. Assess your needs
    • Determine the amount needed and the purpose. Consider your repayment ability and timeline
  2. Compare interest rates and terms
    • Look for the lowest interest rates and favorable terms to save money in the long run
  3. Check eligibility requirements
    • Ensure you meet the lender’s criteria, including credit score and business history
  4. Read reviews
    • Learn from other businesses’ experiences to choose a reputable lender

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Frequently Asked Questions (FAQ)

The length of time you have to pay back a business loan, known as the loan term or repayment term, can vary widely depending on the type of loan, the lender's policies, and the terms you negotiate. A shorter term may result in higher monthly payments but less overall interest paid, while a longer term may offer lower monthly payments but potentially higher overall interest costs.
The total interest paid on a personal loan can vary significantly based on the interest rate and loan term. A higher interest rate or longer loan term will generally result in more interest paid over the life of the loan. Therefore, when considering a business loan, it's essential to shop around for the best interest rate and carefully evaluate the impact of the loan's terms on the total cost of borrowing.
Whether your credit score is good enough for a business loan depends on a few factors, including the lender's requirements, the type of loan you're applying for, and your specific credit score. Generally, the higher your credit score, the more likely you are to qualify for a business loan and secure favorable terms, such as a lower interest rate.