It’s no surprise that almost half of small businesses applied for a loan last year. Last year, 43% of small businesses filed with a small business lender, according to the Federal Reserve Small Business Credit Survey.
A small business loan is obtained by submitting an application to a commercial lender, usually your bank or other lending institution, along with the necessary documents and a business plan.
A business loan can help solve cash flow issues, capitalize on expansion opportunities, and even increase the value of a business. Planning a loan in advance and knowing the documents your lender will need when you apply is essential. Payroll, new equipment, and almost anything that helps a business grow is covered by small business loans.
We’ve picked the Best Small Business Loans of 2021 for this list because they offer affordable rates, fair repayment terms, and fees for qualified borrowers:
BlueVine is a financial technology company, not a bank, that provides small businesses with business auditing, business loans, and invoice factoring services. Their cost-effective invoice factoring solution allows cash-strapped businesses to increase their credit limits by giving 85-90% of the money up front.
BlueVine invoice factoring offers up to $ 5 million with a weekly interest rate of 0.25%. Minimum requirements include a FICO score of 530, three months in the business or more, monthly income of $ 10,000, and a B2B (business to business) business.
- Quick approvals
- To qualify you must have a minimum FICO score of 530
- For loans originating in 2020, a PPP loan forgiveness request is now available
2. On the bridge
OnDeck term loans are distinguished by their advantages of rapid financing, loyalty and early repayment. If you are already doing business with this lender, they will waive any persistent interest rates and even the origination cost if you take out a new business loan.
OnDeck’s prepayment benefits allow borrowers to fully repay their loan while eliminating remaining interest without incurring additional expenses. OnDeck, on the other hand, takes a general lien on all the assets of a business and requires borrowers to sign a personal guarantee, which states that the lender can take on the borrower’s personal assets if the loan does not is not reimbursed.
- $ 100,000 lines of credit and $ 250,000 small business loans are available
- In minutes, you can apply for a loan online and have it approved.
- A minimum credit score is required
3. Fund of funds
Fundbox is an AI-driven small business lending platform that offers lines of credit and short-term loans. According to the company, you can get a credit decision in as little as three minutes, making it one of the fastest ways to get accepted for a small business loan with an online lender today.
Borrowers can connect their business accounts to Insights Advantage software to obtain cash flow estimates, examine balances, and simulate business situations by entering possible transactions. To be eligible for a line of credit, the business must have used a relevant business bank account for at least three months before applying.
- Lines of credit up to $ 150,000 are available
- There is no minimum credit score or income criteria
- There is no consequence for payment in advance
4. Fundraising circle
For qualified applicants, Funding Circle offers small business loans with fixed interest rates starting at 4.3% per annum, which is always lower than other short term small business lenders. Within an hour of submitting your online application, you will be contacted by a loan advisor who will help you determine the best option for your business.
Funding Circle loans have fixed monthly payments, and if you prepay your loan early, you will not be charged a prepayment penalty. A lien on your business assets is also required, as well as a personal guarantee from the principal business owners.
- Loans of up to $ 684,000 are available
- Online application with disbursement in three working days or less
- There is no minimum income requirement
5. National funding
National Funding offers a variety of loan choices, including financing for small businesses with low credit. Borrowers must have a personal credit score of 500 for a direct loan (one of the lowest minimum scores among this type of lender) and 475 for renewals to qualify for a loan with national funding.
National funding assesses the company’s annual income, bank account and years of activity when granting approval. You can apply online and have your loan approved on the same day, with funds available in as little as 24 hours.
- With no upfront fees, you can borrow up to $ 500,000
- Early payment discounts
- Loans are available for 6 to 15 months
When choosing the business loan tool to use, you need to do sufficient research. Be sure of your state’s requirements as well as the type of loan your business requires.