By Daniel Lewis,
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Back in the day, banks were the only source of loans for small businesses, and they do have reasonable rates. Still, it was tiresome to apply for one and stressful to wait for the approval.

However, now it is much easier for a small business to get a loan. I’m talking about online lenders, and it is why I’ve opted to find the best small business loans that you can get from these services. Here I’ve chosen several of the best business loans you get in 2021.

Editor’s Last Update: Acquiring a loan is not a simple task, especially with the state of the economy at this time. So, before you apply, please take a closer look at the online SMB lenders I’ve outlined here and carefully consider the payment structure, the interest rate, and the loan terms lengths, as these are key deciding factors. I’ll also need to note that the SBA PPP loans ended on May 31st, 2021.

The 5 Best Picks for Small Business Services at a Glance

#1 – LoanBuilderis a subsidiary of PayPal, the world-famous online payment processor. It’s a direct lender service, and it is designed to be competitive and even undercut so many of the existing online loan services.

#2- SmartBiz  –  is an online loan service facilitator, and as such, it does not provide the actual loans. Instead, this service makes the funding possible by providing expert help and guidance and matching with the right lender according to your needs.

#3 – OnDeck  is an online loan provider and enjoys a good reputation for providing reasonable rates and sums of up to $500K. OnDeck provides business lines of credit and term loans, but it has more stringent qualifying criteria.

#4 – Kabbage  – is an online loan provider, but it only provides a business line of credit and not term loans. The good thing with Kabbage is that it has very loose credit requirements and has a straightforward online application and dashboard where you can track and monitor your spending.

#5 – Lending Club  – is not a direct loan lender, but it is a lending marketplace. It is considered a P2P (peer-to-peer) lending marketplace as it connects lenders and borrowers. Still, there are specific criteria for application, and Lending Club only provides term loans.

Get a better idea of the offered features of each online loan service; I’ve made the following comparison table where you can see the main features of each lender:

LoanBuilder Short-term loan only $5,000 – $500,000 6.49% $42,000 9 months
SmartBiz Long-term loan $30,000 – $5,000,000 4.75% $100,000 2 years
OnDeck Long-term loan, business line of credit $5,000 – $500,000 10.99% $100,000 3 years
Kabbage Business line of credit $1,000 – $250,000 2.5% $50,000 12 months (for less than $100K)

36 months (for more than $100K)

Lending Club Long-term loan $5,000 – $500,000 4.99% $50,000 12 months

Best Small Business Loans (Updated 2021)

LoanBuilder – Easy-to-qualify Terms, Short-Term Loans With Low Rates

LoanBuilderLoanBuilder is a part of PayPal’s services, and it enjoys a well-known online reputation. This is a direct lender, so there are fewer hoops to jump through when applying for a loan here, which is why they charge a lower fee and interest rates.

The service has lower credit score requirements and lenient requirements for qualification. The primary service of LoanBuilder is a short-term loan that comes with predetermined rates. LoanBuilder’s borrowers don’t need to pay an origination fee, and the amount one can borrow is between $5K and $500K. Since the loans by LoanBuilder are short-term loans, the repayment is between 3 and 12 months, with weekly payments.

Some essential criteria apply to be eligible for a LoanBuilder loan, like $42,000 annual income, a credit score of over 550, UCC 1 filing, and the business should be operational for at least nine months. If you get approved for a LoanBuilder loan, you’ll get your funds the next business day. In simplified words, LoanBuilder provides fast, easy, flexible loans for small businesses.

Why We Recommend
LoanBuilder is an excellent option for new and emerging businesses looking to build their business and need a short-term financial infusion. I would recommend the LoanBuilder service for people looking for a short-term loan with transparent fees and no hidden charges. Another thing why LoanBuilder is a great option is because there is no fee deducted from the loan proceeds, and there is a single fixed dee paid over the life of the loan, and there is only a $20 returned item fee.
Best for
LoanBuilder’s services are for businesses looking for a quick and easy loan or for businesses who are just starting and need an extra influx of cash quickly. It is also suitable for business owners who want a transparent pricing model and have low annual income.
  • Low borrower qualifications
  • Seamless application process
  • Low credit score requirement
  • No extra or hidden fees
  • The money is transferred within 24 hours
  • No long-term option, loans need repayment within 12 months
  • Not suitable for businesses needing long-term financing
Loan Type Short-term loans
Loan Amount $5,000 – $500,000
Min Credit Score 550
Min Annual income $42,000
Min Time in Business 9 months
Interest Rate 6-19%

Read the full LoanBuilder review

SmartBiz – Get an SBA (7)(a) Loan With Ease


SmartBiz is an online lending service providing SBA loans. The services of SmartBiz are tailored to fit the needs of established businesses, as the application criteria are relatively stringent. However, this service has made every effort to make the application process as streamlined as possible and facilitate each application step.

The interest rates of the loans provided by SmartBiz are very low (4.75% – 7%) compared to other online lenders, as these are mainly SBA (7)(a) loans. The loans by SmartBiz are primarily large loans ranging from $30K up to $5M. SmartBiz offers only long-term loans, with repayment terms from 10 to 25 years. If approved, you will receive the funds from 7 to 14 business days.

The essential application criteria that apply are a minimal annual income of $100K and a minimum credit score of 640. The other stipulation is for the company to be in business for at least two years. SmartBiz has made the entire process simple, and as a general rule, about 90% of all qualifying applicants get approved for a loan.

Why We Recommend

I recommend SmartBiz as a viable loan service because it offers easy access to SBA loans, SBA Commercial Real Estate Loans, and standard bank term loans. Also, the rates offered for all the types of loans by SmartBiz are very affordable, especially when compared to other online loan providers. Also, the online platform significantly lowers the application time, which usually takes months via a traditional bank, and it takes a week with SmartBiz.

Best for

SmartBiz is a perfect option for businesses in good financial standing that need low-interest loans with longer repayment terms. It is also an excellent option for all businesses looking to get an SBA (7)(a) loan or SBA (7)(a) Commercial Real Estate loan with low-interest rates. However, the qualifying criteria are strict, and not all businesses are eligible to apply.

  • Very competitive rates
  • Fast SBA loan approval when compared to traditional bank
  • Flexible fee structure
  • Automated application process
  • Experienced and knowledgeable support staff
  • High minimum qualifying requirements
  • Requires business lien and personal guarantee
Loan Type Long-term loans, SBA (7)(a)
Loan Amount $30,000 – $5,000,000
Min Credit Score 640
Min Annual income $100,000
Min Time in Business 2 years
Interest Rate 4.75%
News and Updates [July 12th, 2021]

As the PPP (Paycheck Protection Program) ended on May 31st, 2021, SmartBiz is prepared to help the partnering banks process the PPP loan forgiveness applications for all the small businesses they funded.

Read the full SmartBiz review 

OnDeck – Pioneering Online Lender, Streamlined Application


OnDeck is a very well-known name in online lending, as it has been around for so long and has helped plenty of businesses globally. As this service is one of the pioneers of online lending, it remains among the favorite and top-rated services of its kind.

The services provided by OnDeck are term loans and business lines of credit. The official OnDeck website is excellent in its design and strongly emphasizes excellent user experience and customer satisfaction. The OnDeck term loan ranges from $5k to $250K and has repayment terms of up to 24 months. Their business line of credit loans ranges from $6K up to $100K, and the repayment terms are 12 months.

The eligibility criteria are similar to other online money lenders, and to apply, the necessary time in business is three years. Also, the credit score needs to be 600, the annual revenue needs to be over $100K, and the business needs to have a business checking account. Here I need to note that several restricted industries are not eligible to apply for a loan, and OnDeck does not lend funds to businesses in Nevada, North Dakota, and South Dakota.

Why We Recommend

I would recommend OnDeck as a tremendous online loan service for businesses looking for a quick, no-hassle loan. I like their online application forms, as they streamline the application process. Their US-based customer service agents and loan advisors are knowledgeable and friendly, and you can talk to them and get their expert advice.

Best for

OnDeck is a great option for established businesses looking to get a term loan or business line of credit with relatively short repayment time. The service is apt for established businesses with significant yearly revenue and businesses that have been operational for longer than three years.

  • A fast and easy application process
  • Quick funding time
  • Lower borrower qualifications
  • Clear funding terms and conditions
  • Helps build business credit
  • Not all states and businesses are supported
  • High-interest rates
Loan Type Term loans, business line of credit
Loan Amount $5,000 – $500,000
Min Credit Score 600
Min Annual income $100,000
Min Time in Business 3 years
Interest Rate 10.99%

Read the full OnDeck review

Kabbage – Great Option For a Business Line of Credit

KabbageKabbage is an online lending platform that primarily deals with loans for small businesses with low or no credit history. The Kabbage service established its business in 2011 and became an international online lender in 2013. The only service provided by Kabbage is a business line of credit, and it ranges from $1K up to $150K.

The application process is automated and streamlined, and if approved, the funds are transferred within 10 minutes of approval. The eligibility criteria are relatively low, as there is no minimum credit score, though 540 would be recommended. Also, for businesses applying for a loan of less than $100K, the minimum annual revenue is $50K, and the minimum time in business is 12 months. For the businesses applying for more than $100K loan, the minimum time in business is 36 months.

The Kabbage application process is very streamlined, as it is fully automated, and all you need to do is create an account with them, link your bank accounts to see if you qualify, and add the desired amount and the repayment terms. However, this may seem convenient, but you pay for the service with the higher interest rates.

Why We Recommend

Kabbage is a very well-known name in online lending, and it only provides a business line of credit loans. I would recommend this service for its streamlined application process, fast approval times, and even faster funding.

Best for

The Kabbage services are best suited for small businesses looking for a fast business line of credit loan and have poor or no credit score. Also, it is a good option for business owners who are like a hassle-free application process where everything is in one place.

  • A streamlined, automated application process
  • Low qualifying requirements
  • Fast approval and fast funding
  • No credit score necessary
  • No hidden, application, or origination fees
  • High-interest rates
  • Requires a personal guarantee
Loan Type Business line of credit
Loan Amount $1,000 – $250,000
Min Credit Score N/A, 550 preferred
Min Annual income $50,000
Min Time in Business 12 months
Interest Rate 2.5%

Read the full Kabbage review

Lending Club – Peer-to-peer Lender, Good Option For New Businesses

Lending Club

Lending Club rounds up the top five online lending services. Unlike the other entries on our list, Lending Club is a lending marketplace known as a peer-to-peer lending service. The official website can be confusing at first, as there is a separate entry for borrowers and investors. Still, with careful browsing, you can manage the website and get access to the online application forms. The loans are actually provided by the Lending Club partner Accion Opportunity Fund.

The loan offered by Lending Club is a term loan with a repayment time of one to five years. The loan you can borrow ranges from $5K up to $500K. The interest rates are fixed, so the monthly repayment schedule is fixed, which I find can benefit some businesses. Another thing is their lack of prepayment penalties, and you can pay off the entire loan early without any issues, as long as you pay the entire amount (interest included).

The eligibility criteria are not stringent, so you need an annual income of $50K, no recent bankruptcies, and your business needs to be operational for at least 12 months. The credit score required is “Fair,” which usually means a score of 600 or higher.

Why We Recommend

I would recommend Lending Club as a financing option for micro-business owners or sole proprietorships that need a micro-loan. The other recommendation is their personal loans that can be used for business purposes.

Best for

Since the Lending Club made significant changes in 2019, it is best suited for personal loans and very small businesses, sole proprietorships, and freelancers.

  • Relatively low qualifying requirements
  • Competitive interest rates and fixed monthly payments
  • Quick access to the funds once approved
  • Repayment date change
  • Automatic credit reporting
  • Only term loans available
  • After application, you get redirected to partnering services
Lending Club
Loan Type Long-term loan
Loan Amount $5,000 – $500,000
Min Credit Score 580 preferred
Min Annual income $50,000
Min Time in Business 12 months
Interest Rate 4.99%

Read the full Lending Club review

How We Rate Small Business Loans Lenders

To get the best small business loan services for you, I’ve outlined the selection criteria I’ve used:

  • Transparency of terms and conditions
  • Interest rates
  • Qualifying requirements
  • Type of loan
  • Application process
  • Customer service

How Can You Choose the Best Small Business Loans For Your Business – Best Tips

As the online lending services aim to attract more clients, they’ll do anything to lure you in with the promise of excellent terms and flexible rates. However, I’ve prepared some tips on how you can evaluate the best SMB loan for your business according to your income. Here are the main things you should consider:

  • Loan Type – always select the type of loan that best fits your needs. Don’t consider only the short-term needs, as you can often get carried away and end up unnecessarily saddled with loan repayment for a long time.
  • Total Loan Amount – consider only lenders that offer the amounts that you need. For example, if you need a smaller amount, make sure it is within the lender’s range.
  • Precise Requirements – it is always preferable to know all the requirements before you apply for a loan, as you would not want to waste time preparing to apply for a loan and get rejected due to a misunderstood requirement.
  • Rates – the lower, the better. Rarely do online lenders match the bank rates, but the other terms are much better, that it often makes sense to get a loan from an online lender.
  • Speed of approval/funding – the idea behind going to an online lender is to get a loan fast, so look for lenders that offer fast funding that suits your needs.
  • Repayment terms – know the repayment terms beforehand, as some lenders ask for weekly or daily repayments, so you need to prepare your bank account to handle such requests.
  • Penalties – as always, read the fine print, as all the crucial things that can cause a problem later are found here. Check the penalties for late repayments or early repayments.

In my opinion, one of the most important aspects is the monthly (or weekly) amount you’ll need to put aside to pay back your loan. Since your ability to repay the loan depends directly on the revenue you make, you need to consider all the possible options before committing to a loan of any type.

How To Get a Small Business Loan

You can find a detailed article on the Finimpact blog explaining all the vital aspects you should know to get a small business loan. Before you apply for a small business loan, here are some essential things you should note:

  • What do you need the money for – knowing this will help you determine which type of loan to apply for
  • What is your credit score – different lenders require different credit scores
  • What is your time in business – many lenders have this requirement, and it is anywhere between three months and three years
  • What is your annual revenue – to be eligible for a loan, you’ll need to have a minimum annual revenue, most often between $50K and $100K

After considering all the options, you need to gather all the required documents and apply for a loan. However, it would be best to be careful, as the statistics are not great for small business loan approvals. Traditional banks are the most common options to get a loan, but stats show that about one in every six applications gets rejected, so it makes more sense to apply for a loan with alternative lenders.

How Does an SMB Loan Work?

An SMB or small-to-medium business loan works just like any other loan; the main difference is that the requirements, terms, and conditions are customized to fit small businesses. As with other loans, with a small business loan, you get a sum of capital that you can use to pay for equipment, get a lease on a new property, stock your inventory, or invest in new machinery, depending on your business. Depending on the loan terms, you need to pay a certain interest rate and other accompanying fees to use the funds.

Types of Small Business Loans

Several types of loans are adequate for small business financing: SBA loans, term loans, business line of credit, and invoice-based financing.

  • SBA loans – the SBA loan is a small business loan offered by a bank or online lender but is partly guaranteed by the government. The most common ones are SBA (7)(a) loans, 504 loans, and microloans.
  • Term loans – the term loan is a lump sum of cash you borrow upfront and repay with interest over a set period with fixed, equal payments. The repayment terms vary:
    • Short-term loans – require weekly repayment; usually have higher interest rate; the repayment period is short, between 6 and 12 months.
    • Medium-term loans – require weekly or monthly repayments; the repayment period is between one and five years.
    • Long-term loans – require monthly repayments; have lower interest and a long repayment period of 10 years and more
  • Business line of credit – the business line of credit is a flexible type of loan, where you get a certain sum approved, but you only withdraw what you need and pay interest on the amounts you borrow. Think of it as a credit card for your business, so note that the APR is higher
  • Invoice-based financing – this is a type of loan where a factoring company takes over your unpaid invoices and gives you the cash equivalent (their fee is withdrawn from the total amount of the invoices) and later collects the amounts from your customers. This is short-term financing that can be suitable for managing cash flow.

There are, of course, other types of business loans, so you should do your homework and always read the fine print before you apply for one.

Loan Lender with The Lowest Interest Rates

I’ve gathered the loan with the lowest interest rates from the five listed small business loans:

  1. Kabbage – for term loans 2.5%- 71%; for a business line of credit 8% – 80%
  2. SmartBiz – 4.75% – 7%
  3. Lending Club – 4.99% – 24.9%
  4. Loan Builder – 6.49% – 19.31%
  5. OnDeck – for term loans 11.89%; for a business line of credit 10.99%

What Can You Do If You’re Denied a Small Business Loan?

In the unfortunate case of having your loan application denied, there are several things you can do:

  • Carefully read and analyze the explanation letter – the reason(s) for rejection is clearly stated in there
  • Improve your credit score
  • Have a checking account
  • Be clear why you need the loan in your next application
  • Get more customers and expand your business – lenders look favorably on businesses with plenty of customers

Alternative Loan Lenders

Apart from these five online loan services, I’ve also singled out several others with good loan services and options. If you don’t like the offering of the loan providers above, then you should check out BlueVine, Fundbox, and Funding Circle. I’ve found that these also provide good options when you require a term loan or a business line of credit. You can find more information on these and others, as I’m constantly looking for the best options for helping you get the financing your business needs.


It would be best if you always aimed to find the best loan for your business. Depending on the business you are in and the current financial state, sometimes it is better to get a term loan, while in other cases, it is better to get a business line of credit. There are plenty of online lenders that offer incredible small business loan opportunities: you just need to find the one best suited to your needs and abilities. I’ve compiled the best online lenders according to the category they excel in:

FAQs – Popular Questions About Small Business Loans

How Do I Qualify for an SMB Loan?

Qualifying for an SMB loan is simple: you should check the minimum qualifying requirements before you apply. These usually include a minimum credit score, the length of business activity, and minimum annual income.

For online loans, these are a credit score of 550 or over, 12 months in business, and $50K in annual revenue. After you prequalify, the lenders will do a soft credit check, and then you’ll need to supply all the relevant business information and see the available options for you.

Are You Personally Liable for an SBA Loan?

Depending on the type of loan and the online lender you borrow from. In some cases, like a larger term loan, you will need to add a personal guarantee as collateral. However, there is no need for a personal guarantee in the case of loans on lower amounts.

What Credit Score Is Needed for a Small Business Loan?

Depending on the lender, the credit score varies, and it ranges from 550 up to 640.

How Your Credit Score is Calculated?

The US has two main credit scoring systems – FICO and VantageScore. There are various subcategories when it comes to calculating the credit score, but there are several main factors affecting your credit score you need to note:

  • Your payment history – the most critical factor
  • The total amount of outstanding debt
  • Credit utilization ratio
  • Number of credit accounts you own
  • Different types of credit you own
  • Total age of your accounts

What Business Loans Are the Easiest to Be Approved For?

The most accessible loan to get approved for is a small business line of credit. According to my research, at this time, Kabbage offers minimum requirements and approval within minutes of application.

Does Applying for a Business Loan Affect Your Personal Credit Score?

Depending on the type of business you have and how you apply for credit, in some cases, the application for a small business loan can affect your personal credit score. Still, in many cases, applying for a business loan does not affect your personal credit score.

Which Bank Is Best for Small Business Loans?

I could not separate one bank best for small business loans, so here are the top-three US banks that provide excellent terms for small businesses:

  • Wells Fargo
  • Bank Of America
  • JP Morgan Chase

What Are the Different Types of Small Business Loan Options?

Small businesses have several loan options like term loans, SBA (7)(a) loans, business line of credit loans, and invoice-based financing. There are other types of loans as well, but with less favorable terms and conditions.

How Long Does It Take to Get a Small Business Loan?

Depending on the online lender and the amount you are looking to borrow, some take 10 minutes to apply for, and you get approval within 24 hours or less. But not all are that quick, so the most realistic expectation would be about 48 hours for the whole process. Unlike online lenders, traditional banks can take several weeks or months to process your loan application.

Online Lenders Vs. Traditional Banks: Which One Is Better for You?

Depending on your business and current financial state, it is better to apply for a loan to online lenders. While you can apply with traditional banks and do it in person, the online lender application process is streamlined and usually hassle-free. For more info on this, check out this article outlining the pros and cons of each option.

What Can You Do if You’re Denied a Small-Business Loan?

You can analyze the rejection letter, as it explains why your application was denied. Then, work on improving the low points, and wait the requisite 30 days (or more) to apply again.

Daniel Lewis
Daniel Lewis
Daniel Lewis is an MBA accredited investment professional who wants to assist small business owners to gain access to finance. After going through many channels for funding, Lewis has found that getting the first loan right is vitally important for future success.