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Small Business Loan Reviews

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  • Biz2Credit Review

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    Pros Suited for startups 2-7 days time to funding Cons Some additional fees Expensive terms & fees Overview Biz2Credit is a New York-based alternative lending platform that connects businesses to various forms of funding. Be aware that Biz2Credit does not originate its own financial products. Instead, they act as a matching service, ideally saving you […]

  • Capital One Business Loans Review

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    Pros Suited for small to large businesses Low interest rates Cons Not suited to new businesses Some additional fees Lends to a limited number of states Overview Capital One is a McLean, Virginia-based bank serving the Mid-Atlantic region and parts of the South. They’re perhaps best known for their credit cards and credit card marketing […]

  • PNC Bank Small Business Loans Review

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    Pros Suited for small to large businesses Low interest rates Cons Stringent borrower qualification Only operates in 19 states Overview PNC Bank is a nationally chartered American bank based out of Pittsburgh, PA. It has branches in 19 states and Washington, D.C. and is among the largest banks operating in the U.S. Established businesses with […]

  • Lending Club Personal Loans Review

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    Pros Suited for startups Competitive terms and fees Easy application process Cons Unsuited for large businesses Some additional fees Overview With over 10 years in business, Lending Club is the largest and oldest peer-to-peer (P2P) lender around. P2P lenders such as Lending Club seek to streamline and de-complicate lending by cutting banks out of the […]

  • National Business Capital Review

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    Pros Relaxed loan qualifications Suited for new businesses Suited for startups Suited for small businesses Cons Opaque fees Overview National Business Capital (NBC) is a lending advisory service based in Bohemia, NY that links small business applicants to one of its 75+ lending affiliates. Like many services of its kind, NBC is able to save […]

  • SeedInvest Review

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    Pros Good for startups with exponential growth potential Connects you to accredited investors Allows non-accredited investors to invest Cons Over-complicated pricing/fees Expensive Only ~1% of applicants are approved to campaign Overview With the attention that crowdfunding has been getting lately, you probably associate crowdfunding with sites like Kickstarter, GoFundMe, and Patreon — services by which […]

  • Cashbloom Review

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    Pros Relaxed credit score requirements 2-7 days time to funding Cons Opaque terms and fees High factor rates Overview Cashbloom is a California-based alternative business funder offering short-term working capital in the form of loans and merchant cash advances. Cashbloom operates in both the U.S. and Canada, though not all their products will be available […]

  • Direct Capital Equipment Financing Review

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    Highlights Short-term business loans Equipment leasing Franchise funding 24-hour funding Overview Direct Capital is a New Hampshire-based online funder serving small businesses. The company offers three categories of financing: working capital, equipment financing, and franchise financing. This review will focus on Direct Capital’s equipment financing products. Read our review of Direct Capital’s working capital products for […]

  • Citibank Business Loans Review

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    Pros Suited for small to large businesses Low interest rates Few additional fees Cons Stringent borrower qualification Opaque terms and fees Poor public reputation Overview Citigroup is a New York City-based financial services corporation and one of the nation’s largest banking institutions. Citibank is its consumer division. Citibank provides several lending products to small businesses, […]

  • LendingTree Business Loans Review

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    LendingTree, based in Charlotte, NC, is an online platform connecting individuals and businesses to a wide range of financial products through their lending partners. LendingTree does not originate their own loans. Instead they charge their partners for use of their service. LendingTree’s partners include familiar names like OnDeck, Kabbage, Credibly, and Fora Financial.

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: