Best Business Loans of December 2022

Find funding that fits your business

Get the cash you need to expand your enterprise or start a new business from scratch from the best lenders in the business.

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Loan Type
Monthly Revenue
Time in Business
Credit Score
Updated in December 2022
Best Choice 2022
1
9.8
Editorial score
Apply online in 4-minutes
  • Time in Business: 12+ months
  • Monthly Revenue: $10K+
  • Minimum Credit Score: 640

Loan amount:

$10K - $6M

2
9.7
Editorial score
Fast & tailored offer for any business
  • Time in Business: 10+ months
  • Monthly Revenue: $8K+
  • Minimum Credit Score: none

Loan amount:

$5K - $20M

3
9.4
Editorial score
Get approved and earn $250*
  • Time in Business: 12+ months
  • Monthly Revenue: $3K+
  • Minimum Credit Score: 640

Loan amount:

$2K - $250K

4
8.9
Editorial score
Compare offers from multiple lenders
  • Time in Business: 6+ months
  • Monthly Revenue: $6K+
  • Minimum Credit Score: 580

Loan amount:

$5K - $5M

5
8.1
Editorial score
Lenders network competes for your business
  • Time in Business: 12+ months
  • Monthly Revenue: $14K+
  • Minimum Credit Score: 500

Loan amount:

$5K - $1M

*For prequalification

Are you looking to open a business account?

Explore the best online business checking account
9.8
Editorial score
Banking designed for your business
  • Visa Business Debit Card with cashback rewards
  • Checking account, taxes, accounting – all in one app
  • No account minimums, no account fees

Editor's Choice

Best Choice 2022
9.8
Editorial score
Apply online in 4-minutes
  • Time in Business: 12+ months
  • Monthly Revenue: $10K+
  • Minimum Credit Score: 640

Loan amount:

$10K - $6M

Is It Easy to Get a Business Loan?

Getting a business loan can be challenging, especially if you haven’t been open very long. Fortunately, services that provide quotes from multiple lenders make it easier to get funding for your company than ever before.

You can try these tips if it’s been tough for you to find an affordable business loan:

  • Build your personal credit score. You’ll need to show a strong history of paying bills on time. You can also boost your score by using no more than 30% of your available credit. In other words, if you have a personal credit card with a $5,000 limit, try not to carry a balance of more than $1,500 from month to month.
  • Make sure you can afford to repay a business loan by looking at cash flow. For this calculation, divide your operating income after expenses by the total debt you take on each year for your business. Ideally, you should aim for a cash flow ratio of more than 1, which means you make more money than you spent paying off debt. Most banks want to see at least 1.35 for business loan approval.
  • Develop a comprehensive business plan. If you can’t show a detailed document with full financial projections, lenders may question whether the company has a solid foundation.
  • Expand your search. If you’ve only looked at one or two types of loans, you may want to consider additional forms of business funding.

What Types of Business Loans Are Available?

The best business loan for your needs varies based on factors like the type of business, the amount you want to borrow, and why you need the money. Exploring multiple loan types increases your chances of a successful application.

Loans in each of the common categories below may be secured or unsecured. Secured loans are covered by collateral like equipment or a vehicle. If you don’t repay the loan, the bank can seize the property that secures the loan. Unsecured loans don’t require collateral, so they often have stricter approval guidelines.

SBA loans

Funding from the U.S. Small Business Association is a smart choice if you have average credit or below. Guaranteed government repayment means it’s easier for small businesses to qualify for funding through the SBA than through other channels.

The three main SBA loan types include:

  • Microloans of up to to $50,000 for equipment, supplies, inventory and/or working capital
  • 504 loans of up to $5 million for real estate, equipment, or upgrades that increase the value of property you already own
  • 7(a) loans of up to $5 million to buy another company, obtain working capital, or otherwise grow your business

SBA loans have an estimated APR of 3% to 13% and terms of up to 25 years. They’re often the most cost-effective way to get small business funding if you have bad credit, but approval can be slow.

Traditional Bank Loans

Term loans from traditional lenders like banks and credit unions usually have a fixed interest rate of around 9%, so it’s an affordable option if you can meet the relatively strict approval requirements. Most applicants need to provide collateral or a personal guarantee, and you’ll need a credit score of at least 680. Your monthly payments will stay the same for the life of the loan, typically about 10 years.

Business Line of Credit

This type of business loan is similar to a personal credit card. Your company has an open line of credit up to a certain amount. You can make purchases until you reach that limit, making monthly payments toward the principal each month along with interest. Business credit lines usually have interest rates ranging from 7% to 25%.

Accounts Receivable Loans

If you have outstanding invoices, you can get this type of secured business loan. Accounts receivable loans are good for businesses with bad credit since they use your company’s invoices as collateral. Designed to help you pay for short-term expenses and debts, these loans carry an interest rate of anywhere from 10% to 60%.

Merchant Cash Advance

If your business has bad credit but strong sales, you might want to consider a merchant cash advance. Rather than checking your credit rating, this loan lets you borrow a percentage of your future credit card transactions. However, you’ll need to pay a steep interest rate ranging from 40% to 150%.

Equipment and Construction Loans

Your company can use these secured loans specifically for equipment or real estate renovation. For an equipment loan, the equipment acts as collateral. In the case of a construction loan, the property itself counts as the collateral. Equipment and construction loans typically have interest rates around 4% to 40%.

Short-Term Loans

Short-term business financing could also work if you don’t have the best credit. These loans last about three years and top out at about $500,000, but you can borrow much less.

Online lenders usually offer short-term loans and you can even receive the funds within a few days if you qualify. While you might be eligible for an APR of around 8%, some lenders charge sky-high rates of up to 99%. You should also keep an eye out for expensive fees.

What Are the Most Important Requirements for Business Loans?

Lenders consider several factors for approval, but the most important requirements are:

  • A good credit score, generally defined as at least 690. However, some online lenders specialize in funding for business owners with bad credit.
  • Minimum revenue, often from $50,000 up to $250,000 or even higher depending on the lender. If your company doesn’t make that much yet, you could potentially get a microloan from the SBA or a business credit card.
  • Length of time in business. Most traditional banks require at least two years of operation before approval, but you can try for an online small business loan just one year after you open.

How Do I Apply for a Business Loan?

The application process varies for different types of business loans. In general, however, you’ll need to submit the following information to your lender:

  • A business plan that describes the purpose of your company and explains how you plan to use the money you borrow
  • Resumes for your executives
  • Certificates, licenses, and permits for your business
  • A history of the company’s cash flow and future revenue projections
  • Bank statements from both your personal and business accounts
  • Personal and business credit reports, or permission for the lender to run a report for you
  • Two to three years of business tax returns
  • Three to five years of revenue records
  • Current legal contracts, including partnership and franchise agreements
  • Current profit and loss statements

What Is an APR?

APR (annual percentage rate) is the total cost of your business loan each year. It combines all the payments, fees, and charges stated in your loan contract. While APR is important, it’s not the only thing that matters when selecting a business loan. By getting quotes from multiple lenders, you can compare APR alongside factors like lender reputation and repayment terms.

Kabbage Disclosure

* This offer is provided by Kabbage from American Express (“we”, “us” or “our”). Kabbage Funding™ loans are issued by American Express National Bank (AENB). To be eligible to earn the $250 associated with this offer, you must 1) apply and be approved for a Kabbage Funding line of credit between 11/21/2022 and 2/28/2023 at 11:59pm ET and 2) add and verify your designated business bank account (hereafter defined as “Funding primary account”) on or before 2/28/2023 at 11:59pm ET. AENB will deposit $250 into the Funding primary account you’ve successfully linked to Kabbage Funding within 30 calendar days from the date the account is verified. Limit one offer per new Kabbage Funding account. This offer (i) is not available to existing Kabbage Funding customers, (ii) is non-transferable, and (iii) cannot be combined with any other offer except as permitted by American Express. We reserve the right to modify or revoke this offer at any time. You may not receive the offer, if we determine in our sole discretion that your account is not in good standing, has a disconnected bank account, and/or you have engaged in abuse, misuse, fraudulent activity, or gaming in connection with the offer in any way or that you intend to do so. We may also cancel your Kabbage Funding account and other accounts you may have with us. The offer may be taxable income to you and may be reported on IRS Form 1099. You are responsible for any federal or state taxes resulting from the offer. Please consult your tax advisor if you have questions about the tax treatment of the offer. If you have any questions regarding this offer, please call 1-888-986-8263 Monday – Friday 8 A.M. to 9 P.M. EST.

If eligible, you can be approved in minutes for a line of credit from $2,000 to $250,000 when we are able to automatically obtain your business data and verify your bank account. If a manual review is required, it will take longer to provide you with a decision. Kabbage Funding™ offers access to a commercial line of credit between $2,000 to $250,000. Each draw on the line of credit will result in a separate installment loan. All loans are subject to credit approval and are secured by business assets. Every loan requires a personal guarantee. Monthly fees range from 2-9% for 6-month loans, 7.5-18% for 12-month loans, 15.75-27% for 18-month loans, and are subject to change for future loans drawn under the available line of credit. Not all customers will be eligible for the lowest fee. Not all loan term lengths are available to all customers. Eligibility is based on creditworthiness and other factors. Not all industries are eligible for Kabbage Funding. Pricing and line of credit decisions are based on the overall financial profile of you and your business, including history with American Express and other financial institutions, credit history, and other factors. Lines of credit are subject to periodic review and may change or be suspended, accompanied with or without an account closure. Late fees and return payment fees may be assessed. Loans are issued by American Express National Bank. Kabbage Funding™ is a trademark of American Express.