Getting financing for your small business isn’t a matter of “if” but “when.” Sooner or later, your business is going to need capital, whether it’s to make it through a slow period or to expand.
That’s why, even if you’re not looking to take out a loan right now, it’s smart to look ahead to stay on top of what’s available. For many small business owners, a bank loan is their first choice when it comes to finding a business lender.
And for good reason. Banks often offer small business loans with competitive interest rates and terms. Here we’ll help you identify some of the best bank loans for small businesses so you can find the right fit for your business.
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9 Best Banks for Small Business Loans + Bonus
Thousands of banks, including community banks, as well as credit unions across the U.S. make at least some type of small business loan. Most of the banks we list here serve small business owners nationally or, at least in multiple states. However, there may be a small, local bank (or credit unions) in your community that could be a perfect fit for your business, though not for a general list like this. Don’t be shy about seeking those out.
That said, the following banks are consistently recognized as top banks for small business lending.
- Live Oak Bank
- Wells Fargo
- Capital One
- Bank of America
- US Bank
- PNC Bank
- TD Bank
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1. Chase Bank
It shouldn’t surprise you to see Chase leading the pack. J.P. Morgan Chase Bank, N.A. has one of the more robust credit offerings for businesses of all sizes, including those who need working capital, equipment financing, or commercial real estate loans. If big borrowing is your goal, this SBA lender offers plenty of SBA-backed options, including SBA 7(a) loans, SBA Express loans and SBA 504 loans, which can connect you with a million or more for that new storefront or manufacturing plant.
Not ready to go big yet? That’s OK, too
Lump sum loans include term loans, draw loans, and advised loans with loan amounts starting as low as $5000, terms as long as 7 years and fixed monthly payments. The minimum payment during the draw period is just accrued interest plus 1% of the outstanding balance OR $100, whichever is greater.
Chase’s Business Line of Credit program is a great way to access capital as needed, which you can borrow against as you need it to grow your business. Lines of credit start at $10,000 – $500,000 and offer a 5-year revolving term, with potential to renew.
Best for small businesses looking for a wide variety of loan options.
2. Live Oak Bank
Never heard of Live Oak Bank? You’re not alone. This SBA-preferred lender is a completely online bank, with no physical branches to visit. What they do focus on, however, they do very well: primarily SBA 7(a) loans or 504 loans.
In FY 2023, Live Oak Bank was the top SBA 7(a) lender based on the total amount of funding approved. The average approval amount was nearly $1.5 million.
You won’t find a lot of extra business lending programs here, but with SBA preferred status, Live Oak Bank may get your SBA loan application approved quicker than most. They also handle other government small-business lending programs, such as agricultural loans through the USDA, and they make larger commercial loans as well.
Best for SBA loans.
3. Wells Fargo
One of the big names in business banking, Wells Fargo has been offering consumer and business financial loans for a long time. With a full range of options, including equipment financing, short and medium-term loans, working capital loans, lines of credit, healthcare practice financing, commercial loans and business credit cards, this big bank is perfect for someone who wants to choose from a wide variety of business financing.
Wells Fargo also participates in the SBA small business loans program. Extra perks can be found for existing customers; if you already use Wells Fargo for your personal checking account, business checking account, or savings account, it’s worth checking out.
Best for a wide range of loan options and perks for customers.
4. Capital One
Capital One is a familiar name when it comes to business credit cards with lots of choices for those looking for rewards credit cards, including options for those with fair or good credit.
If you’re looking for a more traditional loan option, however, this bank may help, too. It offers SBA loans (7a and 504), lines of credit and real estate loans up to $5 million, and trade credit in various amounts in almost every industry.
Other lending options, including equipment financing, lines of credit, can be just what you need to get to the next level of business. (One other solid perk of Capital One is that it offers a robust mobile app experience. It’s ideal for someone who is on the go and wants a bank that will be there.)
While startups may qualify for small business credit cards from Capital One, for lines of credit and business loans, 2 years time in business and a business checking account is required.
Best for established businesses looking for a robust online experience.
5. Bank of America
Bank of America has been a leader in personal finance products and offers small business loans as well. With SBA loans and traditional business loans, lines of credit, franchise financing, commercial real estate loans, and business credit cards, it’s been giving a variety of solutions to small businesses poised for growth.
Bank of America values its relationships with customers and is more likely to offer great rates if you have other bank account services with the company.
Best for perks and benefits for Bank of America customers.
6. U.S. Bank
U.S. Bank offers business bank accounts, credit cards, loans and lines of credit, payments and more. It consistently ranks as a top SBA lender. For FY 2023, it originated nearly 2000 SBA 7(a) loans with an average loan amount of $177,916.
U.S. Bank Business Essentials® lending options provide customizable funding options and an easy online application process. Options include:
- Quick loans up to $250,000 with online application (fixed rate)
- Business term loans up to $1 million secured by collateral
- Commercial real estate loans
- SBA loans up to $12,375,000
- Equipment financing up to $1 million
Best for SBA loans and faster loan approvals for non-SBA loans up to $250,000.
7. PNC Bank
PNC Bank’s small business services include checking accounts, credit cards, merchant services, loans and lines of credit and more. It operates in 27 states and the District of Columbia. In FY 2023 it originated 565 SBA 7(a) loans with an average loan amount of $260,942.
PNC offers detailed guidelines on its website explaining what it looks for in personal credit, business credit history, years in business (generally 3+), financial trends, business debt service coverage, liabilities, net worth and collateral. It’s a good idea to review those before applying.
PNC Bank offers a variety of small business loans, including:
- Unsecured loans ($20,000 – $100,000) with 2-5 year terms
- Secured small business loans ($101,000+) with 2-7 year terms
- Small business commercial real estate loans ($100,001+) with 5-15 year terms and 25 year amortization
- Secured vehicle financing ($10,000-$250,000) with terms of 2-6 years
Best for well-established businesses.
8. Huntington National Bank
Huntington offers a variety of commercial loans and business banking products. You can apply for a loan of up to $350,000 online or contact a relationship banker to discuss other loan options. According to SBA data, in FY 2023, Huntington National Bank originated 6202 SBA 7(a) loans with an average loan amount of $179,372. The bank generated more 7(a) loans than any other bank in terms of numbers of approvals.
However, Huntington is a regional bank, not a national bank. Huntington operates more than 1,000 branches in 11 states, with certain businesses operating in extended geographies.
- Business term and real estate loans
- Business line of credit
- SBA-guaranteed loans
- Dental and vet practice loans
Best for smaller SBA loans and specialized financing.
9. TD Bank
TD Bank is a regional bank located on the East Coast of the US with branches in 15 states and the District of Columbia. It offers a variety of small business services, including loans and lines of credit, a business credit card, small business savings accounts, healthcare practice solutions, and more. TD Bank is a Preferred SBA Lender and it ranks #2 in the number of SBA 7(a) loans approved in FY 2023.
Businesses looking for a small business loan from TD Bank can consider:
- Lines of credit
- SBA guaranteed loans
- Commercial real estate loans
Most business owners can apply for loans for $250,000 or less online. Loan applications for more than $250,000 must be brought into a branch.
Best for businesses on the east coast looking for smaller loans and SBA loans.
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Evolving Landscape of Business Financing in 2023
Small business lending continues to grow post pandemic, but it is stymied by a number of challenges, including rising interest rates and inflation. It’s also difficult for analysts to track various types of small business financing. The Consumer Financial Protection Bureau (CFPB) is leading an effort to collect data for more diverse types of small business financing.
We know from the Fed’s 2023 Small Business Credit Survey (non-employer firms) that credit availability is a challenge for 23% to 39% of business owners, with startup entrepreneurs reporting greater challenges getting the credit they need.
If you’re a business owner looking for financing, you may want to at least consider a loan from a traditional financial institution. The best small business bank loans often offer competitive rates and good terms with predictable payment schedules. Not all business owners will qualify, but for those that do, a bank loan can provide a vital source of financing.
Types of Business Loans That Banks Offer
Many of the top banks got on our “best of” list because of the variety of funding options they offer. It’s a benefit to business owners to be able to walk into a bank branch, sit down, and spell out their needs in person—and have confidence they will get just the right lending product.
Looking at the long list of loans, lines of credit, and financing options can be overwhelming, however. We advise getting to know a bit about all the different financing banks are likely to offer; it will make the search process much less stressful.
A business term loan is probably the most straightforward loan option. Term loans offer a specific amount of money with a specific time frame to repay the funds. A a monthly payment schedule that’s consistent throughout the term of the loan is common.
Within this category, in addition to long-term loans like mortgages are what banks call medium-term and short-term loans. As the names suggest, each will give you a different amount of time to repay the loan.
With shorter-term loans, you need to make sure you understand the true dollar cost of the loan, which is not well-represented by APR for loans with a term under 12 months. A good rule of thumb to remember is that the shorter the term, the higher the periodic payment will likely be, but the less accrued interest you’ll likely pay.
Business lines of credit
A business line of credit is traditionally a preferred financing option for many small businesses. Rather than getting a lump sum, you can access the credit line as you need it, repay what you’ve borrowed, and access it again. What’s more, you only pay interest on the part of the credit line you use.
A business line of credit may be a good way to augment occasional cash flow challenges. It has the flexibility of a credit card that you can borrow against whenever you need it. Stay below your established credit limit, make on-time monthly payments, and you are also likely to benefit from increases in your business credit scores.
You may pay anywhere from 7 to 36% for this type of financing. Just like credit cards, your rate and terms may depend in part on your business credit profile, the financial health of your business, personal credit scores (in some cases), the size of the credit line, and other factors.
The SBA isn’t really a lender (except for SBA Disaster Loans) but works with SBA-approved lenders. Loans backed by the Small Business Administration vary in length, amount, rate, and intended purpose. The most common SBA loans include the following:
- SBA 7(a) Loan. Consider this for working capital (this is the most flexible SBA loan program). This general-purpose business loan comes in amounts up to $5 million with low rates and origination fees.
- SBA 504 Loan. This type of loan can be a great option for purchasing real estate or buying other fixed assets. It can also be used for refinancing certain debt. Like other SBA-guaranteed loans, you’ll need collateral and a personal guarantee for this, as well as excellent credit. If approved, your rates will be considerably low.
- SBA Microloans. Not every business needs to borrow millions. That’s where these smaller microloans come in. With a loan amount cap of $50,000, these loans are for startups or businesses that need smaller amounts of capital. These loans are often made by nonprofit providers and carry low interest rates.
- SBA Express Loans. Like the 7(a) program but need your money fast? You may qualify for an express loan, which promises a quicker decision on a completed application. (Funding still takes time, though.)
Most SBA loans have a lengthy application and approval process that require financial statements including cash flow statements, copies of tax returns, and more. A business plan or projections showing how the loan will be repaid may be required.
They aren’t ideal for anyone needing money in a few days—or even weeks. Expect to spend up to a month or more demonstrating your ability to repay and going through the loan application process. Still, they can be well worth it since the interest rate you pay will likely be one of the lowest of all your loan options.
Also known as equipment financing, loans or equipment leases can help your business acquire new machinery, manufacturing tools, tech equipment, or even commercial restaurant stoves and fridges.
The rates on these loans are going to depend on your credit profile, often ranging from 8 to 30%, but offer longer repayment terms than some short-term loans. These loans are considered secure since the equipment being financed is also the collateral for the loan.
Commercial real estate loans
If you have a mortgage for your home, you already know basically how these work. Business real estate loans are considered long-term financing because they typically include longer repayment terms to help with the higher costs of purchasing real estate. Expect to get lower rates for commercial property purchases, but prepare to need plenty of cash on hand for a down payment. Banks like to see a willingness to invest upfront in the form of a 10-20% down payment.
If you find yourself unable to get a more traditional long-term commercial real estate loan that many banks offer, going through the SBA’s 504 loan program can be an excellent option. The SBA may guarantee loans to businesses that haven’t been able to get funding elsewhere but demonstrate a strong annual revenues and whose owners have good or excellent credit scores.
Traditional Banks vs. Online Lenders
When it comes to getting cash for your business, it may seem that online lenders or other alternative lenders and their simplified loan applications and shorter approval times are too good to be true. In fact, they can be a suitable option for funding, especially if you need a decision in days—or minutes.
Instead of weeks or months to get approved for a traditional bank loan, online business financing often takes a day or two, making this faster access to capital worth any additional cost. Be sure you understand the repayment terms of a loan before you sign on the dotted line, no matter where you apply. Some types of financing require daily or weekly payments, and paying off the financial early may not save you money depending on how it is structured.
Alternatives to Bank Loans for Small Businesses
If you need bad credit business loans or if you’re looking for the best banks for small business startup loans, you’re going to find your search takes more time and effort, especially if you hope to land a bank loan. Eligibility requirements for banks are often fairly strict.
Businesses that don’t meet typical bank criteria will often need to consider alternative business funding options. If you have bad credit, or your business is not generating much revenue, qualifying for many types of small business funding will be tough. You may need to consider more creative options like crowdfunding or loans from friends and family.
Business credit cards
Business credit cards work like personal credit cards. One advantage of business cards over personal cards, however, is that your good repayment history will usually help you build your business credit profile.
Additionally, you can often get free cards for your employees, and their spending can help accumulate points and cash back rewards that you can later redeem for items for your business.
Finally, most small business credit cards are available to startups as long as the owner has good credit and sufficient income from all sources (not just the business.)
Expect to pay the same kind of higher rates that personal cards charge, anywhere from 10 to 28% though some business credit cards offer 0% intro APR financing for up to a year or longer.
FYI: the richer the rewards, the higher the annual fee tends to be. Shop around to get the best business credit card from your bank, and consider upgrading as your annual revenue grows.
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Merchant cash advance
New businesses may not qualify for traditional loans, but if yours can demonstrate steady sales revenue, you may qualify for merchant cash advances. These aren’t loans but instead are an advance on future sales. You’ll repay the advance daily or weekly from your debit and credit card sales.
Secured business loans
If you have bad credit and don’t qualify for unsecured business loans, you may see whether you can qualify for a secured business loan. In this case, you pledge collateral for the loan. This makes it less risky to the lender. If you are unable to pay the loan off, the lender can take that collateral (perhaps equipment or a vehicle) to help recoup losses.
How to Qualify for a Small Business Loan from a Bank
Once you narrow down the list of loan products that you’re interested in, you’ll want to eliminate any you don’t qualify for. Most traditional loans require you to be in business for at least two years and meet minimum credit score requirements.
(SBA loans don’t have minimum credit score requirements for most loans, but lenders often want to see FICO scores of 680 or higher).
Your business may also need to meet minimum revenue requirements. Lenders may look at annual revenue, as well as average monthly income for the past 3-6 months. Business bank statements will almost always be required, and many banks will also require copies of business tax returns and personal tax returns.
What You Need To Apply for a Small Business Loan from a Bank
Once you’ve decided which bank or alternative lender you want to apply with and know which type of loan you want, gather what you’ll need for the in-person or online application.
Traditional lenders such as banks often require more detailed financial statements, such as profit and loss statements, and copies of personal and business tax returns.
An online lender may need less documentation, but all lenders will need to verify the identity of the applicant(s) to meet requirements for anti-money laundering regulations.
You’ll need to provide details for your business bank account so funds can be deposited once you’re approved for a loan.
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Frequently Asked Questions: Best Banks for Small Business Loans
Do Banks Give Small Business Loans?
Many banks offer small business loans. Keep in mind, though, that each bank will have its own qualification requirements and ideal customer profile. Even if your business has strong qualifications, your industry, loan amount or type of loan may or may not be a fit. Still, because the terms are attractive it’s worth exploring these types of loans if you have the time.
What is the Easiest Bank to Get a Small Business Loan With?
Generally, the fastest and easiest loans to get are non-bank loans, including business cash advances/merchant cash advances, business credit cards, invoice factoring and financing, and lines of credit from online lenders.
The loan that’s easiest for you to get, though, will depend on the type of loan and your qualifications. Online lenders have more flexible qualifications than banks, for example, and often can review and approve applications very quickly. But you may pay more for that convenience.
Again, each bank will have its own requirements and preferences in terms of the small business loans it makes. If you have good credit, you have far more options and will likely get better loan terms. If your credit could use some work, consider taking some time to rebuild your credit by paying down debt and making on-time payments.
Where Is the Best Place To Go for a Business Loan?
Banks and SBA lenders often offer great terms on small business loans, but it can be challenging for many small business owners to qualify. As mentioned, most require 1—2 years in business, strong documented business income, and good to excellent credit scores. Collateral and personal guarantees may be required as well.
What Is the Best Source for Small Business Loans?
We may be biased, but we believe Nav is a great place to find small business loans and financing. View your top financial options from 160+ trusted loans and credit cards based on your business data. You’ll also get unique insights into your business credit and business financial health.
*DISCLAIMER: Nav Technologies, Inc. is a financial technology company and not a bank. Banking services provided by Blue Ridge Bank, N.A., and Thread Bank, Members FDIC. The Nav Visa® Business Debit Card is issued by Blue Ridge Bank, N.A., and the Nav Prime Charge Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa cards are accepted. Your funds are FDIC-insured up to $250,000 through Blue Ridge Bank, N.A., Member FDIC.
This article was originally written on April 6, 2023 and updated on January 17, 2024.
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