4 Best Low-Interest Loans for Your Small Business In 2023

SBA loans are an excellent option for businesses that need a loan with a long-term length and competitive rate. You may be surprised to hear that you don’t need to go through a bank to get one. SmartBiz can help guide you through the long, arduous process of securing an SBA loan.

With a SmartBiz working capital/debt refinancing loan, you can apply for $30,000 to $350,000. APRs are between 9.02% and 10.26%, with repayment terms of up to 10 years. Loan proceeds can be used to purchase inventory or equipment, launch a marketing campaign, pay operating expenses, or hire more employees. You can also use your funds to refinance high-interest business debt. You may receive funds as quickly as seven days after approval.

For business expansion, SmartBiz also offers SBA loans for commercial real estate. You can borrow from $500,000 up to $5 million with APRs of 6.62%-6.66%. Repayment terms are up to 25 years. Loan proceeds can be used to purchase commercial real estate or refinance your existing commercial mortgage. You can receive funding as quickly as 30 days after credit approval.

To qualify, you must be in business for at least two years. You must have a personal credit score of at least 650 and enough cash flow to cover your new loan payment. Your credit report must also be free of bankruptcies or foreclosures within the last three years, outstanding tax liens, and prior defaults on government loans.

For many business owners, peer-to-peer lending has opened up new opportunities to receive affordable loans. If you’re looking for competitive interest rates, one of the top choices is Funding Circle.

Through Funding Circle, you can borrow from $25,000 up to $500,000, with repayment terms between six and 60 months. Interest rates for the most creditworthy borrowers start at just 4.99%. Less creditworthy borrowers may qualify for rates up to 22.99%.

Funds from a Funding Circle loan can be used for any purpose. These loans are particularly popular with franchise owners.

To qualify, you must be in business for at least two years. Your personal credit score must be at least 620. Borrowers with higher scores will be eligible for the lowest interest rates. Most borrowers receive their funds within ten days of applying with this lender.

PayPal’s LoanBuilder is a service that allows you to “build” a business loan with the borrowing amount and terms that work for your business. LoanBuilder is available to borrowers with credit scores as low as 550. Borrowers with high credit can get approved for higher amounts with lower fees.

LoanBuilder is a bit different from some other lenders on this list because its loans do not have an annual interest rate. Instead, you’ll pay one fixed fee for borrowing. LoanBuilder loans are available in amounts from $5,000 to $500,000, and you can receive funds as soon as one business day after approval. There are no origination fees or hidden fees. Instead of interest, you’ll pay one fixed fee starting at just 2.9% of the borrowing amount. Less qualified borrowers may qualify for loans with fees up to 18.72%.

To qualify for a LoanBuilder loan, you must have been in business for at least nine months and a minimum annual revenue of $42,000. You must not have any open bankruptcies on your credit report, and your personal credit score should be at least 550, although the lowest fees are reserved for borrowers with good to excellent credit.

Accion is a nonprofit lender with low entry barriers for small businesses, particularly those falling into one of its specialty areas. Initially, the organization specialized in offering microloans and financial education to low-income communities across the globe. Since then, Accion has continued its mission to improve local communities by lending capital to startups and other businesses that may not qualify for other lending options.

To qualify, you’ll just need a credit score of 575 (550 in some places), enough cash flow to be able to repay your loan, and be up to date on your bills.

Accion offers loans from as small as $300 to as high as $250,000. APRs range from 7% to 34%, which takes into account a 3% to 5% origination fee.