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Getting a small business loan is critical when your business needs help when it comes to buy an existing business, funding inventory or getting the working capital you need to maintain your business.
This article will highlight the top small business loan providers and explain everything you need before applying.
National Business Capital is among the top financing companies, helping customers like you get the financing you need to grow your business. They have a network of 75+ lenders to help you get the best rates.
A small business loan can be the lifeblood of success for a new startup. The needs of each small business owner may differ between needing equipment to streamline their processes, paying a vendor to keep their business up and running, or recovering from the pandemic.
Choosing the best small business loan for your brand can be a daunting task. For some, the ins and outs of the loan don’t matter as much as getting the loan and supporting payroll or giving the business the support it needs to grow.
You must understand your options and have the information you need to choose the best loan for your business. This guide will give you the information you need to make a clear decision on the best small business loan providers.
The Best Small Business Loan Providers for 2023
Comparison of the Best Small Business Loans
Fundera allows you to discover the financial options you never knew you had and make your best business decisions yet.
National Business Capital provides term loans, SBA loans, business lines of credit & other options for any need!
OnDeck is your go-to for small business loans. Short term loans up to $25,0000 and lines of credit up to $100,000.
Since 1999, National Funding has provided more than $3+ billion in capital to over 50,000 businesses nationwide.
Lendio is the free, easy way to see all your loan options and find the best rate. They make small business loans simple.
Detailed Reviews of Business Loan Providers
This section will support summarize the top small business loan providers and will provide the pros and cons of each company to help you find the best company for your overall business needs.
1. Fundera - Best Overall
We chose to add Fundera to our list of the best small business loan providers because they are an excellent option for achieving a loan through the small business administration (SBA).
Research also shows that Fundera is one of the best loan providers for female entrepreneurs, especially those who cannot qualify with the bank to obtain working capital for their small businesses.
2. National Business Capital - Most Lenders
We chose National Business Capital as one of the best small business loan providers because it has the most lenders.
They have more than seventy-five lenders in the marketplace, which gives you a higher chance of finding the best loan for your business with the best rate, best term, and as close to the amount you want.
3. OnDeck - Best for Short-term Loans
We chose OnDeck as one of the best small business loan providers because they offer loans up to $250,000 that can be funded as soon as the same business day. They also provide funding for newer businesses with mediocre credit scores.
4. National Funding - Best for Equipment Financing
We chose to add National Funding as a lender for the best small business loans because they offer the best equipment financing even for borrowers with a low credit score.
They also provide leasing and merchant cash advances.
5. Lendio - Best Marketplace
We chose Lendio as one of the best small business loan lenders because you can compare lenders within your application. Once your loan is approved and you receive your funds, they offer you assistance to help you track your loan details and manage your bookkeeping.
What is a Business Loan?
Let’s start by first talking about what a small business loan is. A small business loan is a loan provided by a bank that gives you the financing you need to support the objective of your business.
It is one of the best ways to ignite expansion in your business. Mini small business owners use business loans as a solution to get access to extra capital without losing equity or putting their existing capital at stake.
The best small business loans allow entrepreneurs to get their businesses off the ground and remain in complete control of their products and services.
We know how vital it is for business owners to have the space to grow and increase their brand awareness and equity.
How Do Business Loans Work?
There are five main aspects of a business loan. The first is the down payment. A down payment is money that the business owner must pay towards the loan, representing a small percentage of the entire balance.
It can be compared to a down payment on a car where you have to pay down at least $2,000 to secure the loan.
Another critical aspect of a small business loan is the terms. It is essential to understand the
terms of your loan so that you have things in place that will protect you if you’re unable to pay the loan. Know who you need to contact if you have any problems or questions.
It is also essential to understand the fees associated with the loan. For example, a delinquent payment could result in a fee. While you may get them waived, it is just as important to understand what they are.
There are also personal guarantees that the business owner must abide by with some lenders. Basically, these agreements guarantee that the borrower is 100 percent responsible for paying back the loan.
As the borrower with a personal guarantee, you are responsible for communicating the loan and paying on the agreed day every month, week, or day it's due.
Working capital is a term that every small business owner should become familiar with. Working capital is the funding that you can use to fund your everyday expenditures.
For example, the funds you need to pay the business's utility bills are considered everyday operational needs. The company will need electricity to function and, in some cases, to keep the products fresh and safe.
Working capital is also something that you need to ensure that you’re able to pay your vendors and keep your stock to service customers. And most importantly, working capital is what pays your employees.
Working capital helps manage your payroll and keep your business operating smoothly.
Many small businesses will need a startup loan for working capital. It is the gateway for business success, getting a great start in the industry, and creating a reputation for your business.
How to Choose the Best Loan?
A small business loan is an excellent resource for small businesses looking to expand and recover from the pandemic.
The best small business loan providers work with borrowers to help them get the funds they need. The biggest reward is effective communication that provides transparency and understanding.
They also work to ensure they are making the process of getting you the capital you need to expand or save your business easy.
The best small business loan lenders are Fundera, National Business Capital, OnDeck, National Funding, and Lendio. These are all great lenders to look into to see which option is
best for your business. They offer startup loans, business lines of credit,
and leasing options for equipment.
The best way to choose the best small business loan for your business is first to identify your business's needs. Identify the amount of capital that you need and what type of lending options you need as well.
This will give you a great start and a better understanding of which lenders you should seek out. Also, pay attention to interest rates.
If you are a female borrower, check out Fundera, as it shows that they turn to approve more loans for female entrepreneurs. They let you pre-qualify without affecting your credit score.
- If you are looking for a fixed-term loan payment, then check out National Business Capital.
- If you’re looking to establish a line of credit for your business, check out OnDeck.
- If you need financing for equipment or leasing options, check out National Funding.
- Lastly, if you are looking for immediate funds, check out Lendio.
All of these lenders are great partners that can collaborate with you to help you achieve long-term business success.
Small Business Loan FAQ’s
The SBA is a marketplace for small business loans and startup loans. It does not lend money directly to small business owners. It works with lenders to get small business owners the money they need for their business.
The SBA serves as a middleman and liaison to set policies and procedures to better manage and control its lending partners and micro-lending institutions. The SBA works with lenders by helping them gain easy access to the capital they need.
A small business loan can be used to help a business startup and expand. It can also be used for payroll and to pay vendors to ensure that they have enough stock to continue running their business smoothly.
Small business loans can also be used to help business owners pay down their debt and manage monthly utility bills and repairs.
What you need to get a small business loan will depend on the needs of the business and the type of loan that you choose to get. Eligibility requirements will depend on the lender that you choose to borrow from.
Be sure to read about eligibility requirements for each lender. Look into the detailed information about the loan product they offer to ensure they are the best small business loan provider for your business long-term.
The credit score that your business will need to approve for a small business loan will depend on the bank that you choose to service your loan with. Many banks prefer that you have a least a 700-credit score to qualify.
However, there are a few lenders that only require you to have a 500-credit score. Other lenders only require you to have between a 580 and 650 credit score to get funding with them.
Fundera allows you to discover the financial options you never knew you had and make your best business decisions yet. It's easy, free, and won't affect your credit.