Best small business loans in October 2023

Credibly: Best for working capital

Overview: Established in 2010, Credibly is a direct lender of working capital loans and cash advances to small businesses needing fast funding. It also partners with other lenders to offer business lines of credit, long-term loans, equipment financing, SBA loans and invoice factoring.

Why Credibly is the best for working capital: Business owners can choose from a working capital loan specifically, which offers between $25,000 and $400,000. Or they could go with a merchant cash advance for more accessible loan amounts starting from $5,000 to $400,000. Credibly offers a quick application and funding process, approving loans within 24 hours. 

Borrowers that repay early may qualify for a 20 percent discount on the remaining factor rate charged.

Who Credibly is good for: Small business owners could get approved with a personal credit score as low as 550. There’s also no need to provide a personal guarantee, backing the loan with personal assets. But since Credibly requires at least $300,000 in annual revenue, it best fits businesses with challenged credit but healthy revenue. Its website says it accepts a three-month average revenue of $15,000 per month, though a spokesperson stated a higher revenue requirement of $25,000 per month.

Funding Circle: Best for short-term loans

Overview: Funding Circle helps small businesses find conventional business loans online without the hassle of long documentation and processing times. It’s helped 135,000 small businesses receive term loans and lines of credit, usually funding within 48 hours. 

Why Funding Circle is best for online term loans: Funding Circle’s term loans provide slightly longer repayment options than most online lenders — up to seven years. Its interest rates mirror what brick-and-mortar banks usually offer, starting at 7.90 percent simple interest. But you will pay a high origination fee between 4.49 percent and 8.49 percent to start your loan, and you’ll need to secure the loan with collateral.

Who Funding Circle is best for: Funding Circle works well for established, low-revenue businesses with fair credit. It accepts businesses with a minimal $50,000 per year in revenue and two years in business. But you’ll need a fair personal credit score of at least 660 to be accepted by this lender.

National Funding: Best for early payoff discounts

Overview: National Funding was founded in 1999 and states it has worked with hundreds of industries and communities. National Funding business loans include working capital loans, short-term business loans, equipment financing and leasing. 

Why National Funding is the best for early payoff discounts: National Funding’s working capital loans offer a 7 percent discount on loan fees if you repay within 100 days of taking out the loan. Its loan ranges from $10,000 to $400,000 with repayment terms from four to 18 months. It also doesn’t require collateral, according to its website. These features make its working capital loan accessible for covering small, short-term expenses. 

Who National Funding is best for: Any business ready to get and pay off a loan in less than four months will benefit the most from National Funding’s working capital loan. You can also get funding within 24 hours, helping you finance your next project quickly.

Fundbox: Best for startups

Overview: Founded in 2013, Fundbox provides working capital loans for small businesses in the form of unsecured lines of credit. Its credit limits range from $1,000 to $150,000, an attainable starting point for startups covering low-cost expenses yet not as high a limit as most lenders. The company doesn’t use traditional interest rates, instead relying on an amortized weekly fee. 

Why Fundbox is the best for startups: While startups may struggle with accessing working capital, Fundbox simplifies the process. Apply online to see if you’re approved within three minutes. As long as you have at least six months in business and $100,000 in annual revenue, you should be good to go. Fundbox is also transparent about its fees. Use its online calculator to input your loan amount and chosen repayment term to see your total borrowing costs. 

Who Fundbox is best for: Fundbox works best for new businesses needing short-term infusions of cash to maintain a healthy flow of capital. But your repayment term choices are 12 and 24 weeks. Other online lenders can go up to 24 months or longer.

American Express® Business Line of Credit: Best for line of credit

Overview: American Express® Business Line of Credit offers credit from $2,000 to $250,000. The minimum draw amount is $500 for three- and six-month loan terms if your balance is greater than $500 or $100 for three- and six-month loan terms if your balance is less than or equal to $500. For 12- and 18-month loan terms, the minimum draw amount is $10,000. A fee is charged instead of interest each month there’s an outstanding balance; it ranges from 3.00% to 9.00% on six-month terms, 6.00% to 18.00% on 12-month terms and 9.00% to 27.00% on 18-month terms.

Why Business Blueprint is the best for lines of credit: Business Blueprint takes the hassle out of securing the cash you need with its seamless online application process and doesn't require extensive business experience and hefty revenue to access a line of credit.

Who Business Blueprint is good for: This loan may suit smaller and young businesses that need access to a generous cash flow as they grow their operations.

* All businesses are unique and are subject to approval and review.

Bank of America Business Advantage term loan: Best for the bank experience

Where to get a small business loan

Don’t limit your options — investigate loans from multiple lenders to get the best rates.

Banks and credit unions

Banks and credit unions typically offer a variety of products, from lines of credit to SBA loans. Requirements tend to be strict, however, and approval can sometimes take months. However, these institutions can offer a face-to-face experience. And bank employees should be skilled at helping you navigate the application process.

Online lenders and fintech

Nonprofits

Community Development Financial Institutions (CDFI)

A business loan from a Community Development Financial Institution (CDFI) offers unique advantages. These institutions are dedicated to supporting underserved communities and promoting economic development, so loans often have more flexible underwriting criteria tailored to meet the needs of small businesses that may face challenges accessing traditional financing. 

Minority Depository Institutions (MDI)

Minority Depository Institutions are financial institutions focused on serving minority communities. Like CDFIs, the goal of MDIs is to provide access to capital and financial services and promote economic development in underserved communities. 

SBA lenders

Banks, credit unions and alternative lenders offer term loans backed by the Small Business Administration (SBA). A business can benefit from an SBA loan due to its favorable terms, lower interest rates, longer repayment periods and flexible eligibility criteria. It provides access to capital for various purposes, such as starting a business, expanding operations, purchasing equipment or refinancing debt and supporting business growth and stability.

How to manage a business loan

Getting approved is just the beginning of your business loan journey. Now you need to follow through with repayments which requires effective planning and money management. While you can work in many strategies, one important strategy is to stay close to your business budget. Update your spending and projected revenue frequently so you can make tweaks to accommodate loan payments as your income fluctuates. Consider setting up automatic payments so you don’t miss a loan payment by accident. 

And keep in touch with your lender about your loan status. If you don’t think you can make a payment, communicate that as soon as possible so your lender can work with you on a suitable repayment plan. All in all, be committed to adjusting your business or revenue strategy to fit in loan payments and pay off the entire loan. 

Small business loan news

The foundation of how small business loans work and what’s offered tend to stay the same. But the economy and government regulations can impact interest rates and loan approvals. Here’s what you need to know about getting a business loan in the current market:

Historically high Fed rates create a tight lending environment

The Federal Reserve has been raising lending rates to try to slow inflation since the COVID-19 pandemic into the present. Rates went up in 2022 at a rate not seen since 2001. In 2023, the Fed has raised the Federal Funds rate a total of 11 times, landing at the current 5.5 percent. 

The federal funds rate reflects how much it costs for banks to lend money. It also influences benchmark interest rates like the Wall Street Journal prime rate. Many lenders base their interest rates on the prime rate, so other loan rates often increase when it increases. That includes business loan rates.

SBA rule changes seek to expand small business financing

In other news, the SBA's rule changes took effect in May 2023 with goals of growing the number of SBA lenders, helping businesses qualify for funding and better servicing small businesses and lenders by streamlining loan applications. To accomplish these goals, the SBA has created the Community Advantage SBLC license, which allows lenders to partner with the SBA and focus on getting businesses in underserved markets approved for funding. The SBA has also altered the credit criteria for loan qualification to only include three factors credit history or credit score, collateral and business earnings or cash flow, instead of the previous nine.