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Best banks for small business loans in June 2024

May 08, 2024
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Small business loans offered by national and regional banks come with attractive terms, generous loan amounts and competitive interest rates. From long-term loans and lines of credit to SBA loans and special programs for business owners in underserved communities, banks provide eligible borrowers the funding to help their businesses thrive.

It's no wonder that banks had the highest percent of approved applicants that were satisfied with their experiences, according to the Federal Reserve's 2022 Small Business Credit Survey. The survey found that 77 percent of approved applicants at small banks were satisfied with their experience, while 62 percent at large banks were satisfied. 

Check out our top picks for the best banks for small business loans. We'll show you why they stand out from the pack, what it takes to qualify for a loan from these lenders and where to turn if you can't. 

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Best for credit building

4.3

Loan amount
Starting at $25k
Term: 6 - 18 months
Interest rate
Starting at 8.25%
Fastest funding
1 business day

Best for lines of credit

4.2

Loan amount
$10k- $150K
Interest rate
10.00- 18.00%
Fastest funding
Not disclosed

Best for fast approvals

4.1

Loan amount
$100k- $3M
Term: 24 - 60 months
Interest rate
Starting at prime + 0.51%
Fastest funding
Not disclosed

Bankrate 2024 Awards Winner: Best lender for SBA loans

4.1

Loan amount
Up to $5m
Interest rate
Not disclosed
Fastest funding
Not disclosed
Read our reviewArrow Right

on Bankrate

Best for early payoff discount

4.4

Loan amount
$10k- $500K
Term: 4 - 18 months
Interest rate
Varies
Fastest funding
1 business day
Apply nowArrow Right

on partner site

Best for East Coast bank

3.5

Loan amount
$10k- $5.5M
Term: 24 - 300 months
Interest rate
Starting at prime + 0.74%
Fastest funding
21 business days

Best for SBA loans

3.0

Loan amount
$115k- $15M
Interest rate
Not disclosed
Fastest funding
Not disclosed
Read our reviewArrow Right

on Bankrate

Compare the best banks for small business loans in June 2024

If one of the lenders above seems like it might be a good fit for your financing needs, use the table below to take a deeper look. We’ve made it easy to compare loan terms, amounts and availability for banks offering small business loans. 

LENDER BEST FOR LOAN AMOUNT AVAILABILITY
Credit building from $25,000 All states and Washington, D.C.
Lines of credit $10,000 to $150,000 All states and Washington, D.C.
Fast approvals $10,000 to $3 million 28 states and Washington, D.C.
Midwest bank Up to $5 million 11 states
East Coast bank $10,000 to $5.5 million 15 states and Washington, D.C.
SBA loans $115,000 to $15 million All states
Easy application Up to $10 million 26 states
Small loans $5,000 to $5 million 48 states and Washington, D.C.

A closer look at our top banks for small business loans

When you’re choosing a bank for small business lending, there are several important factors to keep in mind. Important variables include interest rates, fees, penalties and loan amounts. Since banks often have more stringent eligibility requirements, make sure you meet the minimums before applying.

Bank of America: Best for credit building

 

Overview: Bank of America is one of the largest originators of bank business loans. It offers several types of business loans, including term loans, lines of credit, equipment loans and SBA loans as a Preferred SBA Lender. With over 3,900 U.S. financial centers, it can efficiently serve more than 3 million small business owners. Bank of America’s Cash-Secured line of credit gives businesses under two years old a chance to build business credit with at least a $1,000 security deposit.   

Who it’s for: If you’re looking to build credit, you can access Bank of America’s cash-secured credit line as long as you have been in business for at least six months and have an annual revenue of $50,000. It works well if you want to establish a lending relationship there but don’t qualify for its other business loans.

Wells Fargo: Best for lines of credit

Overview: Wells Fargo is the fourth largest bank in the U.S., supporting over 4,700 locations. It focuses on business lines of credit but also offers SBA 7(a) and 504 loans. The lender has three different choices for business lines of credit: unsecured, secured and SBA-guaranteed lines. It has long loan terms, and borrowers can get a Mastercard issued with unsecured or SBA-backed credit lines for direct access without going online. You’ll also be enrolled in Wells Fargo’s reward program. 

Who it’s for: Wells Fargo’s lines of credit are specially designed for different small businesses. The SBA-backed line has smaller maximum loan amounts compared to other business lines of credit offered by banks but welcomes startups. Its unsecured credit line is good for established small businesses. The secured line caters to high-revenue businesses bringing in at least $2 million annually.

PNC Bank: Best for fast approval

Overview: PNC Bank has over 2,500 branches across 28 states and Washington, D.C. It offers a wide variety of secured and unsecured business financing options, such as term loans, lines of credit, SBA loans, business vehicle loans and commercial real estate loans. Funding is available in just one to five business days for its unsecured term loan and unsecured line of credit. PNC is also part of the SBA Preferred Lender Program, which often allows them to expedite the approval process for SBA loans.

Who it’s good for: PNC Bank works best for business owners comfortable applying in person. The bank doesn’t offer an online application process. It’s also best if you want low loans for the fastest approvals. Its unsecured loans provide a maximum loan of $100,000.

Huntington National Bank: Best for Midwest bank

Overview: Huntington National Bank offers lines of credit, equipment loans and asset-based financing. The bank has over 1,000 locations and services conventional loans in 11 states. It also provides SBA loans nationwide as a Preferred SBA Lender and has been the top SBA lender nationally for the past five years by number of loans approved. The bank stands at the top among lenders for SBA loans both in its region and the nation. It launched an initiative to approve small loans to disadvantaged businesses with zero origination or SBA fees. 

Who it’s for: Business owners in eligible states who want to work with a local bank may appreciate the options available at Huntington. If you’re a current Huntington Bank customer, you can apply online for conventional business loans up to $350,000. 

TD Bank: Best for East Coast bank

Overview: TD Bank operates in 15 East Coast states and Washington, D.C., focusing on business term loans, lines of credit and SBA loans. As a Preferred SBA Lender, it’s one of the largest originators of SBA loans. It offers the chance to get approved for a loan in one to three days, provided that your funding needs or financial outlook are straightforward. TD Bank also provides an ample range of business loans, including lines of credit with low starting interest rates and three different SBA loans.

Who it’s for: TD Bank states it considers all business loan applicants, no matter their time in business. This makes it a solid option for startup businesses as well as established businesses. You can also speed up the application process by applying online for term loans under $250,000. Because of where it operates, it’s only a viable option for people who do business on the East Coast. 

Live Oak Bank: Best for SBA loans

Overview: In 2023, Live Oak Bank was the top originator of SBA 7(a) loans by dollar amount, approving nearly $1.9 billion in SBA loans. This online-only bank employs experts who have extensive experience helping small business owners access government-backed loans and other funding opportunities. It offers SBA 7(a) loans, 504 and Express loans as well as several USDA rural development loans. Its 7(a) loans start at $150,000 and go up to $5 million, $15 million for 504 loans. Live Oak Bank is a Preferred SBA Lender, expediting the SBA approval process by up to three to four weeks.

Who it’s for: Live Oak Bank works if you’re looking for an SBA or USDA rural development loan from a fintech bank. Business owners will need fair personal credit scores of at least 650, which beats many other banks that require personal scores of 670 or higher. Since the bank operates fully online, it’s not ideal for people who want in-person assistance with their loans.

U.S. Bank: Best for easy application

Overview: With over 3,000 branches scattered across Western America, U.S. Bank serves small business owners seeking flexible funding. It provides business loans such as lines of credit, term loans, equipment loans, commercial real estate loans and SBA loans. You can apply for Quick Loans, a term loan offered up to $250,000, or the Cash Flow Manager line of credit from your computer or phone. If you’re a current U.S. Bank customer, some parts of the application are even prefilled for you. For other business loans, you can opt to speak to a loan specialist through a virtual appointment, in-person appointment or phone call.  

Who it’s for: Established businesses in an eligible state that want to explore U.S. Bank’s business products. Younger businesses may find value from the Quick Loans, which are available to startups with at least six months of generating revenue.

Chase Bank: Best for small loans

Overview: Chase Bank holds the second-largest business loan portfolio in the U.S. The lender features an assortment of funding options for small businesses, including business credit cards, SBA loans and business lines of credit. Chase offers small business bank loans in sizes as little as $5,000 with no early repayment penalties for term loans under $250,000. Both its term loans and lines of credit go up to $500,000, lower than other lenders may offer.       

Who it’s good for: Chase is ideal for business owners who want the traditional in-person banking experience. You’ll need to go in person to discuss your options with a loan representative. While Chase doesn’t disclose its requirements, it’s likely that you’ll need an established experience and revenue to qualify.

What is a bank business loan?

A bank business loan is any type of financing a business owner receives from a traditional bank like Bank of America or Wells Fargo. In 2022, five top U.S. banks held between $200 and $700 billion in total business funding, according to data from American Banker. These loans often come with attractive terms, generous loan amounts and competitive interest rates. Qualifying for a small business loan with a bank is often challenging for startups and businesses without strong financial backgrounds. So, you’ll need to do some research to find the best option for you.

How does a bank business loan work?

Business owners apply for the loan through a bank. If the application is approved, the bank lends a certain amount of money to the small business, which business owners then repay over the term in addition to fees and interest. 

Lenders may require a business owner to provide an asset or assets which will act as collateral to secure the loan. When you provide business collateral, you may receive lower rates or longer repayment terms.

Most business loans also require business owners to provide a personal guarantee. If you fail to pay back your loan, a personal guarantee gives the lender the right to come after your personal assets. Even if your business is established as a limited liability company (LLC), a lender has the right to hold you personally liable if you default on a business loan.

Unlike personal loans or other lending options, funds have to be applied to business operations. Some loan types may even stipulate which part of the business, such as equipment financing, which goes exclusively towards the equipment listed on the loan.  

Requirements for a bank business loan

Banks often have strict eligibility requirements, which may include:

  • Minimum annual revenue between $100,000 to $300,000
  • Personal credit score of 670 and above 
  • Personal financial history
  • Minimum time in business of two years
  • Industry, particularly stable markets

You’ll also need to provide information about your business as well as personal and business documents. Some commonly required documents include: 

The bank may also look at which industry you operate in. Certain industries may be riskier to lend to and may affect if you are approved for the loan.   

Types of small business bank loans

There are several types of business bank loans, but these loans tend to have more stringent requirements. But if you’re a member of a credit union, you may find it easier to qualify based on the strength of your relationship with the financial institution. Or you can try applying with an online lender, as their offerings are generally more accessible to a broader range of borrowers. Here’s a closer look at the different bank business loan options available.

Term loan

The most common type of bank business loan, a term loan, lets you borrow a lump sum to cover business expenses. Term loans are accessible through most banks and credit unions, and loan amounts range from $5,000 to the millions. Still, you’ll likely have to generate a sizable amount of revenue and provide a personal guarantee to qualify for funding. Furthermore, you can expect higher borrowing costs if you’re starting out in your business. 

Line of credit 

A business line of credit (LOC) is similar to a business credit card, providing a pool of cash you can use for short-term borrowing costs. Lines of credit from banks have long repayment periods, though this could prove costly if you don’t pay your balance off quickly. Bank LOCs also tend to have annual fees, though some lenders may waive that fee for the first year. 

SBA loan

Backed by the Small Business Administration, SBA loans are loan products featuring competitive rates and generous loan terms to meet the needs of small business owners. The most common types of SBA loans offered by banks are the SBA 7(a) loans and 504 loans. They’re accessible through SBA-approved lenders you can locate through the SBA Lender Match Tool. 

SBA loans from banks have a few downsides. Eligibility requirements can be tough, and traditional banks may not offer SBA microloans or Community Advantage loans, which have more relaxed eligibility requirements. SBA loans also come with an application process that’s challenging to navigate. Plus, it could be several months before the loan proceeds are disbursed to you. 

Commercial real estate loan

You can use a commercial real estate loan to purchase or lease a physical space for your company. Some lenders offer up to $5 million in funding with extended repayment periods and competitive interest rates. However, qualifying may be difficult if you’re starting out or your revenue is on the lower end. Plus, you can expect a lengthy application process.

Equipment financing

If your company needs pricey equipment to keep operations moving smoothly, this funding option may be ideal. Equipment loans are secured by the equipment purchased and often come with attractive interest rates. The loan term you’ll get is based on the amount you borrow and the useful life of the equipment.

Pros and cons of bank business loans

To help you make a decision that works for your business, here’s a look at the pros and cons of business bank loans.
 
 

Pros:

  • Generous loans and interest rates. Banks often offer loan amounts into the millions and low interest rates, such as 6 percent to 7 percent.
  • Longer terms. Many banks offer repayment terms between five and seven years or longer, while online lenders might stick with short terms.
  • Affordable. Terms, rates and loan amounts tend to be more favorable than online lenders.
  • Flexible purposes. Most bank business loans let you use the funds for a variety of purposes. 
  • Borrower incentives. While rewards aren’t common for business loans, banks are more likely to offer rewards programs or incentives than other types of lenders.

Cons:

  • Strict requirements. Eligibility requirements tend to be strict, pushing out some small businesses from qualifying, like startups. Most borrowers need good-to-excellent credit.
  • Heavy documentation. Paperwork requirements can be extensive.
  • Slow to fund. The timing for approvals and access to funds can take days or weeks — longer than online lenders that often approve loans within 24 hours.

How to get a business loan from a bank

There are several steps to applying for a loan at a bank. The more you research and prepare, the easier the process may be.  

1. Check your business and personal credit scores

The bank will likely check your business credit score and the personal credit scores of all business owners when processing your application. You should know your credit scores ahead of time as well as the minimum requirements of the bank so you’re not hit with any surprises. If your score is low, you can increase it by paying off existing debt and making on-time payments. 

2. Calculate how much loan you can afford

One of the first questions a bank will ask you is how much you intend to borrow. Taking out more debt than you can afford may decrease your chance of loan approval and, if you are approved, increase your chance of defaulting. Figure out how much you can afford to pay each month in loan installments and use that to inform how much you ask for. 

3. Choose a loan type

There are several types of business loans available, including term loans, lines of credit, SBA loans and merchant cash advances. While term loans are popular, a line of credit may be more appealing to businesses that need ongoing financial support. 

4. Compare banks

Compare terms and fees associated with loans from at least three banks. Some banks may allow you to prequalify, which will increase your chances of approval. Once you have a bank selected, you’re ready to submit an application for approval. If you don’t meet the criteria for bank loans, consider online loans or grants.

5. Collect your documents

Your application process will be smoother if you have your documentation ready to go. Information a bank may ask for includes balance sheets, tax returns, a business plan, bank statements, accounts receivable and business registration.

Who should get a bank business loan?

Borrowers who are more established may want to seek out small business bank loans. Since traditional banks have more stringent requirements, a business that has been operating for two years, a track record of fairly high annual revenue and a more established credit score may want to consider the bank route.  

Banks aren’t a good place to look if you are just starting a business or have bad credit. It’s always a good idea to check with a bank to see if they will work with high-risk borrowers. But startup business owners and borrowers with fair or bad credit or lower revenue should be prepared to look into online lenders, which have a track record of providing funds when traditional banks won’t. Businesses in high-risk industries might also have a harder time getting a bank loan. High-risk industries might include construction, alcohol, medical services, transportation or insurance. 

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Bankrate Insight

Not all lenders or loans are in your best interest. Here are some red flags to watch out for while looking for loans.

  • Vague fees and unclear loan terms 
  • Repayment periods that are too short or different than what you expected
  • Lender does not provide straightforward answers to your questions
  • Rates, terms, and borrowing amounts are far out of line with other lenders

How long does it take to receive a small business bank loan?

Getting a small business loan from a bank can take anywhere from a few days to a few weeks. Much of the approval time depends on the underwriting process, in which the lender evaluates your business’s application and finances to see if it’s creditworthy. If you have strong business finances and credit history, lenders will approve you quickly. But a short credit history or up-and-down revenue growth could take lenders longer to evaluate. 

The documentation required will also factor into the funding speed. For example, if you use business assets to secure the loan, approvals may take longer if the lender needs an appraisal. Do your best to have all the documentation on hand to speed up the process. 

The type of business loan also has an effect on how long it takes to receive funds. An SBA loan requires the lender to go through underwriting as well as get approval from the Small Business Administration. SBA loans can take 30 to 90 days to go through the approval process from end to end. 

Meanwhile, an alternative lending option, like a merchant cash advance, may take only a few days as it’s based primarily on future sales. The financing company can easily see your revenue history and your projected future sales and make a decision.

Alternatives to bank business loans

You can find a variety of alternatives to bank loans if it turns out that a business loan is not right for you.

 

Frequently asked questions about bank business loans

How we chose the best banks for small business loans

Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
22
loan features weighed
Rates
770+
data points collected
To choose the best banks for small business loans, we ensured all loans featured are broadly available across the United States. We then considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, whether the loans are secured or unsecured, minimum annual revenue and fees.
 
Additionally, we use a 22-point scale to evaluate lenders in five key areas: Accessibility, affordability, transparency, customer service and flexibility. Based on the results, lenders are given a rating between 1 and 5:
 
  • 4.5 or higher: Outstanding
  • 4 to 4.5: Excellent
  • 3.5 to 4: Good
  • 3.5 and under: Average