Best Small Business Loans for 2020

Get information on the best types of loans for small business, and the best lenders you should consider. Includes interest rates, max loan amounts, and more.

Updated on January 21st, 2020

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Updated 20th of January 2020

Reviewed loan amounts offered and added a pros and cons list.

Small business loans are used to purchase equipment, inventory, real estate or to start a business. Small business lending includes bank loans, credit cards, venture capital, SBA-backed loans, microloans, and crowdfunding.

Our Pick


Fast, easy small business loans. Apply in 10 minutes and access your funds today.

Apply Now

Up to $250k credit line.

Qualify in 10 minutes.

Pick 6, 12, or 18 month terms.

Why We Chose Kabbage:

Kabbage is a highly recommended provider of small business loans with more than 130,000 customers across the country. They provide quick and easy access to funds via an automated lending platform.

The type of loan they offer is Line of Credit, with a maximum loan amount of $250,000. They have reasonable interest rates too, ranging from 1.5% - 10%, and a payment term of 6 or 12 months.

Kabbage borrowers laud the company's easy online application and lack of pre-payment penalties, making it a great option for either working capital or day to day expenses.

Things to Consider When Evaluating Small Business Loans:

  1. Determine your risk level. Your debt-to-equity ratio will tell you whether you use debt to finance your business more than equity. A high debt value indicates that you're using too much borrowed money in order to sustain your business, and will also limit your ability to obtain more debt.
  2. Compare loan providers to get the best deal. Look at their annual percentage interest rate, total borrowing cost, and repayment terms when making your decision.
  3. Some lenders will charge you extra costs like application fees, while others will not. Be wary of any hidden fees.

Best Small Business Lenders:





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Loans up to $250,000

A highly recommended lender with reasonable interest rates and payment terms.

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Loans up to $500,000

A reliable lender with a simple and efficient application process.

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Loans up to $250,000

An excellent lender with low borrowing rates and good customer service.

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Funding Circle

Loans up to $500,000

A good lending option with fixed monthly payments and no pre-payment penalties.

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The Loan Exchange

Loans up to $250,000

A reliable lender that accepts low credit scores and offers a variety of loan types.

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Bank of America

Loans up to $250,000

A great lending option with reasonable rates. Requires an upfront fee.

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Capital One

Loans up to $500,000

An excellent lender that offers a variety of line of credit loan options.

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Loans up to $500,000

Provides fast access to funds and competitive rates.

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Loans up to $100,000

An excellent lender that accepts low credit scores and provides cash flow assistance too.

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JP Morgan Chase

Loans up to $500,000

A reliable lender that only provides loans to Chase customers.

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Loans up to $500,000

A peer-to-peer option that has no pre-payment penalties and offers fast access to funds.

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US Bank

Loans up to $1,000,000

A good lender that offers low interest rates and flexible loan repayment terms.

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Wells Fargo

Loans up to $500,000

A trusted lender that offers reasonable interest rates. Requires a healthy credit score.

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Loans up to $500,000

A good option that has an easy application process and provides fast access to funds.

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The Business Backer

Loans up to $200,000

Offers fasts funding with good repayment terms and no prepayment penalties.

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Updated 2020/01/20

Types of Small Business Loans:

Loan Type

Interest Range

Max Loan

Invoice Financing

8 - 30%


Short-Term Loan

9 - 40%


SBA Loan

4 - 6.75%


Small Business Startup Loan

4.88 - 5.15%


Business Line of Credit

7 - 25%


Equipment Financing

8 - 30%


Merchant Cash Advance

1.2 - 2.0 (factor)


Personal Loan for Business

5.99 - 36%


Term Loan

7 - 30%


Pros and Cons:


  • Access to large amounts of funding.
  • Retain full business ownership.
  • Small business loans generally offer better rates than alternative sources of funding, like credit cards.
  • Interest paid on business loans is typically tax-deductible.


  • Loan qualification requirements can be very strict.
  • Small business lenders often require collateral to secure the loan.
  • If you have a low credit score the interest rates can be quite high.
  • The application and review process can be lengthy and require detailed financial and business information.


How do you qualify for a small business loan?

To qualify for a small business loan you'll need good credit scores, both business and personal. You may also need assets to use as collateral and may need to show business cash flow and revenue.

What credit score is needed for a small business loan?

640+ is widely considered to be the minimum, but assets, revenues, cash flow, time in business and other factors can influence this.

Where can I get a loan to start a small business?

It depends on what you're after. There are many types of small business loans, including loans to cover equipment purchase, loans to help start a business, loans for buying commercial real estate, invoice financing and more. Decide what type of loan you need, and you'll be able to narrow your list of what lenders to consider.

Who are some small business loan lenders to consider?

Are Small Business Loans Hard To Get

Are small business loans hard to get?

It can be difficult to get a small business loan if your company has been in business for less than two years, has no significant revenue, has no collateral, or has bad or no credit. However, there are lenders like Accion that specialize in loans to businesses that don't meet these standards.

What are alternative business loans?

Alternative business loans include a business line of credit (similar to a credit card), loans from private lenders, invoice factoring - which allows you to borrow money in the amount that you expect to receive from a client in advance - and peer-to-peer lending. These are also known as non-traditional small business loans.

What companies specialize in alternative business lending?

What Do You Need To Apply For A Small Business Loan

What do you need to apply for a small business loan?

  • A detailed business plan.
  • Financial statements.
  • Business credit report.
  • Income tax returns.
  • Accounts receivable and accounts payable.
  • Collateral document.
  • Business licenses and registrations.
  • Articles of incorporation.
  • Copies of third-party contracts.
  • Franchise agreements.
  • Commercial leases.

Are business loans for small business available to startups?

It depends on what stage you're in. Typically a startup is in the very early stages of a business, often before there are revenues or collateral. You may qualify for specialized small loans for small business, but otherwise, you'll be looking for investment funding or alternative business loans.

What kind of small business financing loan should I apply for to buy work vehicles?

You'll probably want to apply for equipment loans, or a business auto loan like the ones Bank of America offers.

Is there anyone who makes loans to small business if I've been rejected by banks?

Try some of the alternative financial tech small business loan companies if you need a loan for small business and are having trouble with banks. These include Funding Circle, Kabbage, Lending Club, Accion, and others. They use new tools, such as crowdfunding, to make loans available to companies that might otherwise have trouble.

How can I get funding fast?

  • Short-term loan.
  • An express bank loan.
  • An Installment loan from an alternative lender.
  • A business credit card.
  • Use invoice factoring.

How can I get a business loan with no money?

You can use an unsecured business loan. With an unsecured start-up loan, your new business can get the money it needs without having to put down any collateral or use a cosigner. This is usually given to individuals with good credit history and rating.