5 Best Small-Business Loans & SBA Lenders of 2020 – Latest News

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Millions of small-business owners rely on suboptimal sources of financing — or no financing at all. This deficit threatens their profitability, expansion plans, and in some cases their enterprises’ very existence.

According to statistics collected by the Small Business Administration (SBA), many businesses don’t even realize they’re eligible for small-business loans. Some 45% don’t know they have a business credit score separate from their owners’ personal credit scores. More than 70% don’t know where to find business credit score information and more than 80% wouldn’t know how to interpret it if they did.

As a result, many small-business borrowers rely on some combination of small-business credit cards, personal credit cards, and personal lenders offering unsecured or secured loans. SBA-collected data reveals that nearly half (46%) of small businesses rely on personal credit cards for working capital, equipment financing, and other short-term credit needs.

Many of these borrowers don’t actually need to mix their business and personal finances — a practice that can expose business owners to increased personal liability, among other downsides. Instead, they can turn to a hearty crop of small-business lenders offering secured and unsecured business loans, SBA loans, business lines of credit, and specialized business credit products like merchant cash advance loans, equipment financing loans, and invoice factoring (invoice financing) loans.

Best Small-Business Loans

Whether you’re evaluating your company’s financing options for the first time or looking for a new lender or type of loan to help grow or diversify your business, keep this list of business lenders close at hand. All offer competitively priced commercial financing products for smaller enterprises, including solopreneurs and microbusinesses.

Bear in mind that the lending offers — rates, terms, and loan amounts — you receive from these providers may vary based on your business or personal credit score, assets, annual revenue, time in business, and other factors.

1. BlueVine

Invoice Financing Lines Up to $5 Million

BlueVine is a pioneering online lender that offers two permanent business lending products: business lines of credit and invoice factoring lines.

BlueVine’s business lines of credit are available to businesses with at least $40,000 in monthly revenue and two years of operational history. The minimum eligible owner FICO score is 600, but a higher score likely qualifies you for a lower interest rate and higher funding amount. The application process is super easy: Just provide some basic information about your business, submit your application, and use your online dashboard to request funds, which typically arrive within hours.

BlueVine’s invoice factoring loans use borrowers’ accounts receivable — customer invoices issued but not yet paid — to secure revolving credit lines as large as $5 million. Depending on borrower creditworthiness and BlueVine’s determination of the likelihood of repayment, borrowers receive anywhere from 85% to 90% of the invoice value upfront and the rest when the customer pays. BlueVine typically approves or denies invoice factoring requests within 24 hours.

BlueVine’s underwriting standards for invoice factoring lines are quite lenient, making them appropriate for businesses with low annual revenues or bad credit. The minimum owner credit score (FICO) is 530, the minimum monthly revenue is $10,000, and the minimum time in business is just three months. The catch: This product is available only to “B2B” companies — businesses that sell to other businesses — not business-to-consumer (B2C) companies.

As a Paycheck Protection Program lender, BlueVine originated PPP loans and assisted borrowers with PPP loan forgiveness applications in 2020. If Congress reauthorizes the PPP program in the future, BlueVine may resume this offering.

  • Products: Business lines of credit, invoice factoring lines.
  • Loan Amounts: Business lines of credit up to $250,000; invoice factoring lines up to $5 million.
  • Terms: Business line of credit draws must be repaid on six- or 12-month schedules (monthly payments). Invoice factoring lines’ repayment schedules depend on invoice due dates.

Learn More

2. OnDeck

Flexible Business Term Loans and Lines of Credit

OnDeck was one of the first online lenders to make business term loans and business lines of credit available to startups and growing businesses with relatively low annual revenues. Today, it remains a top financing choice for enterprises of all sizes.

OnDeck offers two permanent business credit products: business term loans and business lines of credit. OnDeck also offered PPP loans and may do so again if Congress reauthorizes the program.

With a repayment term no longer than 18 months, OnDeck’s term product qualifies as a short-term loan. Loan amounts start at just $5,000, and funding typically arrives on the same business day after approval. The prepayment option is unusually generous too: Approved borrowers can pay their loans off early, in full, and have all outstanding interest waived. This is more generous than the typical “no prepayment penalties” offer.

OnDeck’s business lines of credit have 12-month repayment terms that reset after each withdrawal, one consolidated weekly repayment regardless of how many draws remain outstanding, and no prepayment penalties. Funding is near-instantaneous, even during weekends and evenings. For both permanent products, OnDeck has relatively lenient underwriting requirements: minimum credit score of 600 (FICO), at least one year in business, and at least $100,000 in annual revenues.

  • Products: Business term loans, business lines of credit.
  • Loan Amounts: Term loans range from $5,000 to $250,000; lines of credit range from $6,000 to $100,000.
  • Terms: Lines of credit repayment terms last as long as 12 months; business loan repayment terms last up to 18 months.

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3. Fundbox

Short-Term Financing Solutions for Growing Businesses

Fundbox offers a single permanent business funding option: short-term business lines of credit as large as $150,000. Fundbox participated in the PPP loan program and may do so again if the program is reauthorized.

Fundbox has reasonable qualification requirements for prospective borrowers: an active business bank account, operational history of at least six months, U.S. business registration, and at least $100,000 in annual revenue — although Fundbox advises that the median borrower pulls down more like $300,000 per year. Applicants stand a better chance of approval if they’re willing to share two to three months of business bank transactions or bookkeeping history.

Fundbox’s key differentiators include rapid funding — near-instantaneous draws after initial approval — and transparent pricing with no prepayment penalties. Just be aware that Fundbox is very much a short-term borrowing solution — the maximum draw term is 24 weeks (less than six months).

  • Products: Business lines of credit.
  • Loan Amounts: Up to $150,000.
  • Terms: Repayment terms last 12 to 24 weeks.

Learn More

4. Accion

Nonprofit Business Lender Offering Microloans to Underserved Communities

Accion is a nonprofit business lender more notable for the types of enterprises it caters to than the types of loans it makes.

Accion’s borrowers, broadly speaking, are businesses that have historically been neglected or underserved by traditional sources of capital: those owned by women, people of color, veterans, and disabled individuals, among other groups underrepresented in the broader business community. These businesses tend to be smaller, service-oriented — with restaurants, salons, and similar businesses featured prominently in Accion’s promotional materials — and capital- and credit-poor, including businesses whose loan applications have been denied elsewhere.

Accion’s core loan product is a business term loan available nationwide. Funding amounts start as low as $300, making Accion one of the few business funding options for bona fide microentrepreneurs and side hustlers seeking microloans. Unlike many lenders, Accion doesn’t require borrowers to have any operational or credit history — all that’s required for a startup business loan is a 12-month cash flow projection or business plan.

Accion also offers SBA Community Advantage Loans for established and startup businesses with fewer than 100 employees.

  • Products: Business term loans, SBA Community Advantage Loans
  • Loan Amounts: Business term loan amounts range up to $1 million; SBA Community Advantage Loan amounts top out at $250,000.
  • Terms: Terms vary based on borrower location, creditworthiness, revenue, and other factors.

Learn More

5. Lendr

Rapid Nontraditional Financing Solutions for B2B and B2C Businesses Without Good Credit

Lendr offers two nontraditional types of business financing: invoice factoring loans and merchant cash advance loans. Its key selling points are rapid approval and funding — as little as two hours — and relatively high borrowing limits, up to $1 million for invoice factoring loans and $500,000 for merchant cash advance loans. Because both of its loan products are secured by future revenues, Lendr is ideal for businesses and owners with not-so-good credit

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