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Wondering which banks are best for small business loans? These five institutions offer small business bank loans at reasonable rates.
Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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Jason VissersJason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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Erica SeppalaErica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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If you’re thinking about shopping for small business loans, the first source that may come to mind is a bank. Banks have deep pockets, offer checking and savings accounts, and often sport better rates than alternative lenders. The best banks for small business loans may be more accessible than you realize.
If your FICO score is under 600 or your business is new, unfortunately, you may not qualify for a bank loan. But if you have a solid credit score and steady revenue, low rates, long repayment terms, and a wide range of financial products are within reach. Read on to see the best banks for business loans.
The best banks for business loans offer competitive rates, a variety of loan products, and accessibility. Our list focuses on banking institutions that cover large portions of the country to ensure that there’s a good chance that you’ll find a few of them in or near your area.
Wells Fargo has seen some scandals in recent years
Why Wells Fargo Is Great For Easy Small Business Loans
Wells Fargo offers a good variety of financial products for small business owners. Plus, with over 5,600 branches in 36 states (plus D.C.), it shouldn't be too difficult to find a location near you.
Wells Fargo also offers an easy application process. While the process varies based on your chosen product, you can easily apply online for a loan or line of credit without even leaving your home or office. Not all big banks make applying for a loan this easy.
Wells Fargo Services
Through Wells Fargo, you can apply for the following:
Lines of credit up to $1 million
Small Business Association 7(a) loans up to $5 million
Commercial real estate loans, including the SBA 504 loan
Wells Fargo Interest Rates & Fees
Lines of credit: Rates range from prime + 1.75% to prime + 9.75%
SBA 7(a) loans: Interest rates not disclosed
Commercial real estate loans: Interest rates not disclosed
Wells Fargo Eligibility Requirements
Wells Fargo’s lines of credit generally require at least 2 years in business with established business credit. However, the company states that you may be eligible for a Wells Fargo Small Business Advantage LOC with less than two years in operation. Your credit line will be limited to $50K, though.
While exact requirements are not given for the company’s SBA loans, Wells Fargo does state that they are “appropriate” for businesses with a net worth below $15 million and an average net income under $5 million.
Additional requirements include a credit score of 680 and revenue of $1.50 in cash flow for every $1 borrowed.
Wells Fargo Repayment Terms
SBA 7(a) loans: 25 years for commercial real estate, up to 10 years for all other purposes
SBA 504 loans: 25 years for commercial real estate, up to 10 years for machinery or equipment
No other repayment terms are disclosed
Choose Wells Fargo If...
You want a line of credit from a bank with numerous locations throughout the US
You want an SBA loan from one of the country’s top SBA lenders
Slow application process (you must apply in person)
Why Chase Bank Is Great For Startup Loans
What sets Chase apart from other banks is its low rates -- purported to be some of the lowest in the industry -- and its wide selection of financial products for small business owners.
While Chase is one of the nation's largest banks, its loan application process is quite traditional -- you have to visit your local branch to apply for a small business loan. However, with over 4,700 branches in the lower 48 states, most business owners should be able to find a local branch to kickstart the loan application process.
Chase Bank Services
Chase has financing options for credit-worthy established businesses and startups. These include:
Lines of credit of up to $500,000
Long-term loans up to $500,000
Commercial real estate loans
SBA 7(a) loans, 504 loans, and Express loans
Chase Bank Interest Rates & Fees
Chase Bank does not disclose interest rates for its loan products.
Chase Bank Eligibility Requirements
Chase Bank does not disclose eligibility requirements for its loan products. The bank does state that most products are best suited for businesses that have been in operation for at least two years.
Chase Bank Repayment Terms
Term loans: 12 to 84 months
Lines of credit: Renewable 5-year revolving term
SBA loans: 3 to 25 years
Choose Chase Bank If...
You want an accessible business loan or line of credit from a bank with locations in 48 states
Borrowers will find that U.S. Bank offers competitive interest rates and very few extra fees. It's one of the largest banks offering quick fixed-rate loans. Additionally, U.S. Bank offers good customer support and has an overall positive reputation among its customers.
As with other bank loans, funding is reserved for the most credit-worthy borrowers. Additionally, U.S. Bank doesn't have quite as large a reach as others on this list. If you're on the East Coast, you'll need to find another lending option. However, if you're in one of U.S. Bank's service areas, consider giving them a try.
U.S. Bank Services
U.S. Bank stands out above its competitors as a small business-friendly bank. U.S. Bank offers numerous financial products suitable for businesses of all sizes, including:
Quick fixed-rate loans up to $250,000
Term loans up to $1 million
Commercial real estate loans up to $10 million
Business lines of credit
SBA 7(a) and 504 loans
U.S. Bank Interest Rates & Fees
Quick loans: No origination fee, but rates are not disclosed
No other fees or rates disclosed
U.S. Bank Eligibility Requirements
Businesses must be in operation for at least 2 years to qualify for funding. U.S. Bank does not disclose other eligibility requirements for its loan products.
U.S. Bank Repayment Terms
Quick loans: Terms up to 84 months
Commercial real estate loans: Terms of 5, 10, and 15 years and amortization up to 25 years
No other repayment terms disclosed
Choose U.S. Bank If...
You want a quick, fixed-rate loan from a large bank with a good public reputation
You want to choose from a wide range of business loan products
Bank Of America frequently ranks high on the SBA's most active lenders list and was also a prolific distributor of PPP loans during the COVID-19 pandemic.
There are over 3,700 Bank Of America branches in 39 states, making it easy and convenient to apply for funding.
Bank Of America Services
Bank of America is an SBA Preferred Lender and offers low-interest SBA loans to its customers, along with other loan types. All told, BofA offers the following:
Term loans
Lines of credit
Commercial auto loans
Equipment loans
Commercial real estate loans
SBA 7(a) loans
SBA 504 loans
Bank Of America Interest Rates & Fees
Lines of credit: Rates “as low as 9%” for unsecured LOCs (8.5% for secured lines of credit); $150 annual fee for secured LOCs (waived the first year)
Term loans: Rates “as low as 7.5%” (7% for secured loans), $150 origination fee if approved
Commercial real estate loans: Rates “as low as 6.25%”
Equipment loans: Rates “as low as 7%”
Bank Of America Eligibility Requirements
Term loans and unsecured LoCs: 2 years in business under current ownership, $100k+ in annual revenue, and “typically” a personal FICO score of 700+
Secured LoCs: 6 months in business under current ownership and $50k+ in annual revenue
Commercial real estate loans: 2 years in business under current ownership and $250k+ in annual revenue
Bank Of America Repayment Terms
Term loans: 12 to 60 months
Commercial real estate loans: Up to 10 years (with balloon payment), up to 15 years (with full amortization)
Choose Bank Of America If...
You want an SBA loan from an SBA Preferred Lender
You want to choose from Bank Of America’s broad range of business loan products
While smaller than the other banks on this list, TD Bank nonetheless provides loan options with competitive interest rates for businesses of all sizes. TD Bank has 1,100+ branches in 15 states (plus D.C.) that are primarily located on the East Coast.
In addition to its wide breadth of financial products, TD Bank sports excellent customer service. If you're in the eastern US and are looking for an alternative to the Big Four banks, look no further than TD Bank.
TD Bank Services
TD Bank offers business financing as follows:
Business term loans up to $1 million
Lines of credit up to $500,000
SBA 7(a) and 504 loans
Commercial mortgages
TD Bank Interest Rates & Fees
TD Bank doesn’t disclose interest rate ranges but does state that there are no origination fees for business loans under $100,000.
TD Bank Eligibility Requirements
TD Bank doesn’t disclose eligibility requirements on its site.
Loans under $250k can be applied for online. Loans over that amount must be applied for in person.
TD Bank Repayment Terms
Business term loans: 3 to 5 years amortization
No other repayment terms disclosed
Choose TD Bank If...
You want a business loan from a sizable bank, but not one of the Big Four banks
You’re on the East Coast and you want a business loan with a competitive interest rate
Business Loan & Funding Products Review Methodology
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
Weighted Rating Breakdown
Rates & Fees 20%
Services 20%
Eligibility Requirements 20%
Application 15%
Sales & Advertising Transparency 10%
Customer Service 10%
User Reviews 5%
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
As traditional lending institutions, banks usually offer a full spectrum of financial prospects to their customers. None of these are inherently “better” than any other, but they each come with their own sets of qualifications and terms that may make one product the superior choice for a specific business.
Term Loans
Term loans provide the borrower with a lump sum of money. You’ll then pay the amount you borrowed, called a principal, back over a timeframe called a term, plus interest. Banks usually deal in long and medium-term loans with terms longer than one year. Banks are less likely to deal with short-term loans. Our guide to short-term loans goes into further detail as to how they work.
Most banks offer both types, so make sure you know the difference between secured vs unsecured loans. Secured loans are backed by collateral, typically an asset or a cash deposit. As a result, they usually have lower rates and higher borrowing limits than comparable unsecured loans.
Lines Of Credit
Where term loans grant you a lump sum, lines of credit instead give you the ability to borrow money up to your credit limit for a specified amount of time. Most are revolving lines of credit, meaning that you can reuse credit after you have paid it off.
Whereas term loans are used for working capital, expansions, and equipment, lines of credit are more often used for miscellaneous expenses or to smooth out a company’s cash flow. They can also provide a bit of security for unexpected expenses. Like term loans, lines of credit may be secured or unsecured.
Equipment Financing
Equipment loans are a type of secured term loan that is specifically for buying equipment for your company. They follow, more or less, the same rules as term loans, but the asset that you’re purchasing is used as security for the loan.
The SBA doesn’t originate loans, but it does provide a guarantee on loans offered through other institutions (such as banks), allowing businesses that wouldn’t otherwise qualify for financing to access capital at competitive rates and terms. Just be prepared for a longer application process.
How To Qualify For The Best Bank Loans For Business
There’s a reason the alternative lending market exists, and it’s because getting a bank loan can be quite challenging these days. If you want to maximize your chances of being approved, here are some things you can do.
Watch & Repair Your Credit
Traditional lenders care about traditional markers of trustworthiness, and that, unfortunately, means you’re going to need good credit. If your credit isn’t in the high 600s or better, most banks will be hesitant to take a risk on you.
If you don’t look like a fantastic borrower on paper, you can still build a relationship with your prospective bank by being a customer. Not only can this give you room to negotiate, but it will also make it easier to apply when you’re ready.
Additionally, some banks will only lend to customers who have accounts with them, regardless of how good your credit is.
Watch Your Cash Flow
It should be obvious, but banks don’t want to lend to customers who are financially unable to pay back their loans. Formulae vary from bank to bank — for example, Wells Fargo likes to see $1.50 in revenue for every $1 you borrow — but you’ll want to make sure you have some margin for error for making your payments.
Most banks will want to see that you’ve been able to keep a business afloat for a while. That means having been in business for two to three years, minimum. If you need help before that, you may want to look at alternative business lenders.
Prepare Your Documentation
If you’re applying to a bank where you also have business accounts, you’ll save some labor here. However, you’ll still need to be ready to produce a host of documents (doubly so if you’re applying for an SBA loan). These are things such as tax returns, proof of business registration, personal identification, financial statements, collateral (if applicable), information on any other loans you might have, and your business plan.
Alternatives To Small Business Bank Loans: Online Lenders & Nonprofits
Have banks rejected you? Did you read the above section and are now worried you probably won’t qualify for a small business bank loan? Do you need money faster than most banks can deliver it? Are you just starting and need a cash infusion?
You’re not alone. In fact, there’s a large market for people like you.
How Online Lenders & Nonprofits Are Different From Banks
Since the Great Recession tightened lending standards a decade ago, an alternative online market has grown that’s focused on getting money to businesses with poorer qualifications. Banks themselves, or investors with an appetite for risk, usually finance these companies. They also tend to have much easier and quicker applications, making them appealing to businesses that need money immediately.
Of course, this comes with a trade-off. While the seedier alternative lenders tend to fail over time, you still want to enter the alternative market with caution. Even honest and transparent lenders will (probably) have higher rates than a bank would offer you. Your credit score will be less of a factor here, but still, the better your credit score is, the better the rates you can expect.
The other option is to look at programs offered by nonprofits. Of particular interest will be the loans provided by Community Development Financial Institutions (CDFIs). These may be banks, credit unions, loan funds, or even venture capitalists certified by the CDFI Fund.
CDFIs are often open to new businesses — even most online lenders shy away from businesses that haven’t been around for at least six months — and usually have good interest rates, though not as good as those of banks. Just be prepared for a lengthy application process as you try to match your needs with those of existing programs.
Where To Find Online Lenders & Nonprofits
Online lenders are very easy to find. In fact, it’s almost impossible not to stumble across them if you do business at all online. However, finding the ones you want to work with will probably take a little research.
Nonprofits are a different ballgame. Most operate on a local rather than national level, so you may have to do some research to find the ones in your area. The easiest way to do this is to use the CDFI locator on the Opportunity Finance Network or CDFI Fund websites.
Final Thoughts On The Best Banks For Business Loans
The banks listed in this article are, according to what we’ve found, the best banks for small business loans. Of course, banks also offer business bank accounts, which can be crucial to managing your business finances.
Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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