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Small Business Loan Reviews

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  • LoanBuilder: A PayPal Service Review

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    Pros Valid in all 50 states Transparent terms & fees No up-front fees Cons Inconsistent customer support Moderate interest rates Overview LoanBuilder is a small business loan service offered by PayPal. Originally a product of Swift Capital, a small business financer, LoanBuilder was folded into the PayPal brand when the payments company acquired Swift in […]

  • Lendio Review

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    Pros Relaxed credit score requirements 2-7 days time to funding Cons Opaque terms and fees Relatively slower time to funding compare to many alternative lenders Overview Lendio is a business financing platform that matches customers to funders. While Lendio does not originate loans directly, its network of over 75 business funders — including big names […]

  • OnDeck Review

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    Pros Relaxed borrower qualifications Relaxed credit score requirements Competitive terms and fees Short application process Excellent customer support Prepayment discounts Cons Potentially high factor rates Opaque advertising Overview OnDeck is a hugely prolific online small business lender. Founded back in 2007, OnDeck became one of the first lenders to rely primarily on technology to make their […]

  • StreetShares Review

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    Pros Relaxed borrower qualifications Competitive terms and fees Easy application process Typical time to funding: 2 – 7 days No prepayment penalties Excellent customer service Cons Unsuited for large businesses Overview StreetShares is an online lender that offers business installment loans, lines of credit and, most recently, contract financing (a service similar to invoice factoring). This loan service was […]

  • Fundation Review

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    Pros Competitive terms and fees Few additional fees Typical time to funding: 2 – 7 days No prepayment penalty Excellent customer support Cons Stringent borrower qualifications Lengthy application process Unsuited for startups Overview Fundation is a business lender that offers installment loans and lines of credit to qualified borrowers. The company was founded in 2011 and has […]

  • IOU Financial Review

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    Pros Suited for small business Relaxed credit score requirements Transparent terms and fees Cons High origination fee Some additional fees Overview IOU Financial is a short-term lender serving small, profitable businesses. The Georgia-based company has provided nearly $500 million worth of funding to businesses throughout the country since 2008. As a short-term lender, IOU’s processes […]

  • SmartBiz Review

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    Pros Suited for small and large businesses Excellent terms and fees Excellent customer support No prepayment penalty Cons Some additional fees Somewhat lengthy application process Overview Founded in 2009, SmartBiz is a service that has streamlined and simplified the world of SBA lending. SmartBiz does not directly issue loans—instead, they use technology to match eligible […]

  • Fundera Review

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    Pros Excellent public reputation Transparent terms and fees Cons High factor and interest rates Some additional fees Overview Founded in 2013, Fundera is a business funding matchmaker. Much like a loan broker, this company does not originate loans; instead, they match you up with other business funders you may be qualified for. Fundera is very selective about […]

  • Breakout Capital Review

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    Pros Suited for small businesses Relaxed borrower qualifications Competitive terms and fees Excellent customer support Cons Potentially high factor rates Overview Launched by former investment banker Carl Fairbank in 2015, Breakout Capital is a business funder that offers short-term business financing solutions to eligible merchants. Often, companies in the short-term funding space have a reputation for […]

  • BlueVine Review

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    BlueVine, an online lending service, was founded in 2013 after the founder watched his father, a physical therapist, struggle with inconsistent cash flow due to slow payouts by insurance companies. It shouldn't come as a surprise, then, that the company offers a number of services intended to help merchants overcome cash flow problems.

What is a Business Loan?

A business loan is a way for merchants to secure funds without giving up equity or control of their company. Business loans are a type of debt financing, meaning the merchant takes on debt they must repay in exchange for access to immediate funds.

There are many types of business loans available, from traditional installment loans to invoice financing and business lines of credit. Some types work better than others depending upon the business’s history, financial situation, and assets.

Types of Small Business Loans

Below are descriptions of the most common business loan terms and types you may find during your search for a loan. Which is best for your business?

Bank Loans

Banks loans are, simply, business loans originated by a bank. Banks may offer many types of business financing, including installment loans, lines of credit, and equipment loans. These institutions can normally offer the best rates and fees, but also have a reputation for low acceptance rates and very long application processes.

Bank loans are alternately referred to as traditional financing or traditional business loans.

Business Expansion Loans

These are loans used to purchase and open additional business locations. Most business expansion loans are installment loans, but some businesses may use lines of credit if they do not know exactly how much the project will cost.

Equipment Loans

These are loans used to purchase equipment. Normally, the lender will loan about 80% of the cost of the equipment, and the merchant is responsible for paying the remaining 20%. Equipment loans are an alternative to leasing or purchasing equipment outright.

Installment Loans

Also commonly called term loans, installment loans are loans repaid in fixed, regular installments over a set period of time. The repayment period for business installment loans is normally between one and 10 years, though some lenders will allow for shorter or longer terms.

Installment loans may also be called short-term loans (loans with repayment terms under two years), medium-term loans (repayment terms between two and five years), or long-term loans (repayment terms of six years or more).

Invoice Financing

A catch-all term that includes (among other non-loan financing products) loans that are backed by unpaid invoices. If you have cash flow problems caused by unpaid invoices, invoice financing may be for you.

Lines of Credit

Loans that grant you a credit facility from which you can draw any time without the need for application. These loans are convenient for businesses that have occasional cash flow problems, those that often have to deal with unexpected expenses, or any other businesses that need financing but don’t want to go through an application process each time. For our full list of line of credit reviews, head over here.

Online Loans

Also called marketplace loans or alternative loans, online loans are originated by a variety of non-bank lenders that utilize technology to make fast and easy lending decisions. Individual online lenders may offer products including installment loans, lines of credit, short-term loans, or other loan types, but are similar in that most can offer funding within two weeks or less.

SBA (Small Business Association) Loans

While SBA loans are usually originated by banks, the application process is handled by the Small Business Association itself. The SBA also guarantees a portion of the amount borrowed, which means these loans are often easier to get and require less collateral than standard bank loans.

Short-Term Loans

Unlike most loans, in which the fee is calculated by an interest rate, short-term loans carry a fee that is calculated once based on the original borrowing amount. As you would expect, short-term loans carry short term lengths; normally they are intended to be repaid in under two years, but some lenders allow term lengths up to three.

Head over here for a list of all our reviews of short-term loans (and their non-loan counterpart, merchant cash advances).

Startup Loans

Quite simply, these are loans used to finance startups. As startups are very risky, there are very few lenders that will finance this type of business. However, entrepreneurs may be able to get a loan through certain nonprofits or by utilizing their personal creditworthiness to get a personal loan for business.

Working Capital Loans

These loans are used to cover business operating costs while business funds are tied up elsewhere.

Are You Eligible For a Loan?

Eligibility for a loan is contingent upon a number of different factors; lenders cannot make the final decision about whether or not you’re eligible, and what rates they can give you, until they have performed the full underwriting and verification process. However, lenders can look at a few business factors to determine whether you have a good chance of getting a loan from their company.

Here are four big factors lenders will look for when deciding if your business is eligible for a loan:

  • Time in business: Lenders want to be able to see that your business has successfully been operating for some time.
  • Personal credit score: You must have a track record of making payments in a timely manner.
  • Business revenue: Your business has to be making enough money to meet the incremental payments. Many lenders will not let you borrow more than 15% – 18% of your total business revenue.
  • Collateral: In the event that you can no longer pay, some lenders want collateral so they will be able to recoup the lost money. While plenty of lenders do not require collateral (or don’t require specific collateral) businesses that can put up collateral will find the search for a business loan much easier.

Each lender has different requirements regarding each of these categories; the stronger your case, the more lenders you will have access to. However, most businesses will have access to some form of business loan.

Each of our reviews list the borrower qualifications for individual lenders, so don’t spend your time considering lenders you aren’t yet qualified for!

For more information on the business loan process, take a look at our Small Business Loans 101 series:

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