If you’re looking for the best small business loans available for your business, you’ve come to the right place. We reviewed the best SBA bank loan services for small businesses that qualify. We also reviewed a wide range of other loan types from alternative lenders for all of the small businesses that don’t qualify for an SBA bank loan.
Best Small Business Loans Summary Table
|Bad Credit Risk Short-Term Loans|
You can qualify with a personal credit score of 500+
|1-2 days||9-99%||Visit Site|
|Unsecured Small Business Loans|
You can get a loan without securing it against your business
|1-3 days||30-70%||Visit Site|
You can unlock funds from outstanding invoices early
|1-3 days||16-77%||Visit Site|
|Small Business Equipment Financing|
You can get a loan specifically to finance business equipment
|1-5 days||6-24%||Visit Site|
|Government Contract Financing|
You can unlock funds from government invoices early
|1-5 days||9-40%||Visit Site|
|Small Business Loans for Good Credit Risk|
You can get a competitive SBA bank loan
|14-21 days||6-8.25%||Visit Site|
|Rollover Startup Loans|
You can unlock funds from you 401k savings plan. This costs $5k to setup then $100 / month
|30 days||0% ||Visit Site|
|* The APR will depend on how each online lender perceives the risk involved.|
Considering the Best Alternatives to Bank Loans
If you want the best small business loan at the lowest cost, you need to qualify for an SBA bank loan. SBA loans are guaranteed by the government and have an APR of 8.25% or less. The APR represents the cost of borrowing, the higher the interest rate, the higher the cost of borrowing. To qualify for an SBA bank loan, you need a personal credit score of 680+ and to have been trading as a business for at least two years.
If you do not qualify for an SBA bank loan (most startups and small businesses don’t) you still have a wide range of alternative lending options available to you. Like a short-term loan, a line of credit facility or an equipment loan, all of which we cover below. One of the advantages of these alternatives is that they take days rather than months to get approved.
There’s also another less well known alternative, which is called a ROBS (Rollover for Business Startups). A ROBS is a great option for people with an career behind them. It will allow you to withdraw funds from your retirement plan to invest in your business venture at no cost of money. This is because you are borrowing from your own savings. You can learn more about ROBS by talking to an experienced ROBS consultant, we recommend you reach out to Guidant.
OnDeck: Best Small Business Loan (Bad Credit)
You can qualify for a short-term OnDeck loan with a personal credit score of 500+. You also have to have been trading as a business for more than one year with annual revenue of $100k+. Then you can take out a loan for anything from 3 to 36 months. One upside of OnDeck is that processing your loan, is fast. For most people it takes minutes and you have access to funds the next working day. It’s also a big plus that OnDeck has a Trust Pilot customer rating of 9.6.
- OnDeck have one of the highest approval rates
- If you have an urgent need, approval online takes only one or two days
- Less paperwork is required than with most other lenders
- If you are a bad credit risk, this will be reflected in your APR
- A personal guarantee and a lien over you business assets is required
QuarterSpot: Best Unsecured Small Business Loan
Quarterspot have designed a small business loan for business owners with poor credit (550+), who are also unable to secure their loan on their business. Loans are short-term for up to 18 months and the APR is in the range of 30-70%. Obviously the APR reflects the increased risk to the lender. Quarterspot assess your ability to pay the loan back by primarily analysing your recent bank transactions, which makes it easier to qualify if you have a solid business.
- It’s relatively easy to qualify for a loan that is not secured on your business
- Quarterspot primarily assesses your bank transactions to make a decision
- You can save interest by paying your loan back early
- If you are a bad credit risk, this will be reflected in your APR
- You have to provide a personal guarantee
Currency: Best Small Business Equipment Financing
Taking out a loan specifically to buy the business equipment, tools and systems you require can help to reduce the cost of the loan. Currency are known to offer competitive rates when compared with other equipment financing options. To qualify you need a personal credit rating of 585+ and your business only needs to have been trading for six months.
- Fast turnaround for approval, usually this only takes minutes online
- A personal guarantee may not be required
- Competitive rates
- No benefit from paying your loan back early
- You have to provide a lien over your business assets
Street Shares: Best for Government Contract Financing
This alternative lender recently introduced a much needed new type of loan for small businesses who work on government contracts. Street Shares will loan you 80 to 90% of the government contract value once it has been formally signed. After you have been paid, StreetShares will pay over the balance of the contract value less their loan and admin costs. The cost is an APR in the range of 12 to 25%.
- It’s easy to qualify whether you are the lead contractor or a sub-contractor
- Most startups and early stage small businesses can qualify
- You can save interest by paying the loan back early
- If you are considered a bad credit risk, this will be reflected in your APR
- You pay your loan via automated weekly payments taken straight from your bank account
Guidant: Best Rollover for Startup Loan
An alternative way to raise a business loan, is to explore ROBS or Rollover Business Startup financing.
A ROBS uses money from your 401k or IRA to invest in your business. It’s not a loan because your saving plan becomes a shareholder in your business. Because it’s not a loan, you do not pay any interest. However it does cost around $5k to setup and $100 a month to maintain. When your business starts to make a profit, your savings plan will be a shareholder that benefits from dividends. To explore this further, we recommend you reach out to Guidant and speak to an ROBS consultant.
- You’re not borrowing money so there’s no APR and no monthly repayments to make
- You can pursue other loan options at the same time to make up the total you require
- Investing in your own business may provide a better ROI than your savings plan
- You are taking money from your retirement savings plan, which could leave you short if your business plans fail
- Their is a one of cost of around $5k to setup a ROBs and thereafter you’ll pay around $100 per month to have it maintained
Smartbiz: Best SBA Loan Provider (Good Credit)
SmartBiz provides a faster and less time consuming way to get an SBA (Small Business Administration) loan than applying direct to a traditional bank. If you qualify, you can get an SBA 7(a) bank loan to expand or refinance your business with an APR ranging from 8.27% to 9.57%. However, To qualify for an SBA bank loan, you will need a personal credit score of 680+ and to have been trading as a business for at least two years.
- Smartbiz’s online application process makes it easier to apply and get approved within 2-3 weeks rather than 2-3 months when applying direct to a traditional bank
- If you qualify, the cost of money (APR) is lower
- Smartbiz matches you with a bank that best suite your needs
- You have to have a personal credit score of 700+
- Your business must have a good trading record for more than two years
The Juice Press
This article has covered the best small business loans available for your business. We covered SBA bank loans for small businesses that qualify with a good personal credit score. We also covered a wide range of alternative lenders for the majority of small businesses that don’t qualify for bank loans.
There’s also another less well known alternative, which is a ROBS (Rollover for Business Startups). A ROBS is a great option for people who want to invest in their business from their 401k savings plan. You can learn more about ROBS by talking to an experienced ROBS consultant, we recommend you reach out to Guidant.