Best Business Loans 2018 — Expert Review

Best Business Loans 2018 — Expert Review

1 Comment

Advertiser & Editorial Disclosure

As a small business owner, every dollar you save on interest and fees paid for a small business loan is a dollar back into your business. That’s why it’s so important to make sure you’re getting the best deal that your business can qualify for and fulfills your business’s needs.

But with over 44 different financing options, the research involved in finding that best deal and how to get it could take days, if not weeks. That’s not easy, especially when you’ve got a business to run.

To save you time, we’ve put together a list of what we think are the best small business loans for business owners. Check out the list below and sign up for a free Nav account to find out what lending options you are likely to qualify for.

Best Loans For Businesses with Excellent Personal Credit and Solid Business Credit

Best Funding For Established Businesses With Good Credit

Best Funding for Young Businesses

Best Funding for Businesses With Poor Credit

Best Funding to Create an Emergency Fund

Best Loans For Businesses with Excellent Personal Credit and Solid Business Credit

SmartBiz SBA Loans

SBA Loan by SmartBiz

SmartBiz combines the benefits of a traditional SBA loan without the long and tedious application Learn More

SmartBiz is an SBA loan provider whose entire application process is online, making it much more flexible process for business owners than many other SBA loan providers. They offer SBA 7(a)  loans with interest rates starting at 6% (Prime Rate + 2.75% – 4.75%). These loans can be used for working capital, debt refinancing, or commercial real estate.

The total financing cost, or Annual Percentage Rate (APR), for these loans will include associated fees: referral fees, packaging and guarantee fees, and estimated closing costs. SmartBiz boasts that their APR ranges from 6.96% to 9.06%.

SmartBiz loans are available up to $350,000, or $5M if the purpose is to fund commercial real estate. If you need a larger loan for working capital or debt refinance, Celtic Bank is another great option that offers SBA 7(a) loans $350,000 – $5M.

Requirements to qualify:

  • FICO SBSS score of 160 or above (get your FICO SBSS score with a Nav Premium Plus account).
  • Must have 2+ years of tax returns filed for the business

The SBA has a few additional requirements, including:

  • Business must be a small business. The definition of “small business” will vary based on your industry.
  • Business location must be in the U.S., and some business must be done in the U.S.
  • Applicant must have reasonable invested equity. This means the applicant must own a significant portion of the business (>20%).
  • Must be able to demonstrate a need for the loan, and that the loan will be used for a reasonable purpose.
  • Must not be delinquent on any existing debt obligations to the U.S. government.

*The SBA does not officially require businesses to be 2 years in business to qualify for an SBA loan—check the top 100 SBA lenders to find other SBA loan providers that might be able to work with you.

Best Funding For Established Businesses With Good Credit

Funding Circle Term Loan

Intermediate-Term Loan by Funding Circle

Funding Circle provides a term loan at low rates with a fast and simple process, Learn More

Funding Circle sits at the top of our list as one of the only online lenders as a lender that has consistenly improved their loan offerings by lowering costs for the best borrowers and expanding what they can offer. Their loans range $25,000 – $500,000 with 1 – 5 year repayment terms. Funding Circle’s interest rates range from 5.49% – 22.79%. Their origination fees range from 0.99% – 4.99%. If you miss a payment, there is a missed payment fee charged at 10% of the total missed payment, and if your payment bounces, there is a  $35 insufficient funds fee.

Businesses can be funded in under two weeks. Funding Circle requires collateral on their loans in the form of a lien on your business assets and a personal guarantee from the primary business owners.

Requirements to qualify:

  • 2 years in business (or qualified franchises)
  • $150,000+ in annual revenue
  • Owner must have a personal FICO score of 620 or above
  • Owner must have a history free of bankruptcies, current tax liens, judgments or criminal activity.

Wells Fargo Unsecured Business Loans

Wells Fargo claims to be the leading banking solution for small business owners. And they have a good hold on small business lending, too—they are the number one most active SBA lender as of October 2017, and they offer dozens of small business lending products.

Wells Fargo’s business loan and FastFlex small business loans function similar to those of Funding Circle—repayment terms span 1 to 5 years with rates starting at 6.75% for amounts up to $100,000. (FastFlex loans are available up to $35,000 and rates start at 13.99%.)

Unlike most business loan products, Wells Fargo’s unsecured business loans have a quick turnaround time—funds can be in your account as soon as the next business day. Because this is an unsecured loan product, getting a loan does not require business owners to put down collateral.

Wells Fargo notes that this product is best for expanding businesses, those making a large, one-time expense, remodels, or repairs.

Best Funding for Young Businesses

Able Lending Term Loans

Able has introduced a new lending model to the marketplace, which allows borrowers to crowdfund a percentage of their loan from friends and family in order to receive a lower interest rate. On average, they ask borrowers to find backers to fund 25% of the loan.

They offer loans from $25,000 – $500,000 with interest rates between 6% – 16% plus a 3 – 5% origination fee. Loans can be paid back over 1 to 5 years, and payments are made monthly and equally amortized over the term of the loan. The average APR on an Able loan is 10.9%.

Requirements to qualify:

  • 6 months or more in business
  • $50,000 or more in annual revenue

Kiva Microloan

Microloan by Kiva

Kiva is a non-profit that provides entrepreneurs with 0% interest loans up to $10,000. Kiva loans are Learn More

As a young business, it’s sometimes hard to qualify for large loan amounts. Kiva is a non-profit that allows businesses to crowdfund a loan from philanthropic-minded individuals. Kiva provides entrepreneurs with 0% interest loans up to $10,000 with 1 – 3 year repayment terms.

And no, that “0%” is not a typo. Kiva Zip loans are crowdfunded by a global community philanthropic-minded people who can be potential customers and brand ambassadors to your business. To receive your loan, you must successfully crowdfund the entire amount you are asking for.

Kiva does not check credit scores as a requirement to qualify, however if you take on a loan through Kiva, making your loan payments on time will allow you to build your business credit. (What a bonus!)

Requirements to qualify:

  • Loans must been seen as having a positive social impact
  • Owner must have a business plan.
  • Borrowers are required to invite friends and contacts for initial funding as “social proof” of the business and business owner.

Best Funding for Businesses With Poor Credit

Credibly Business Cash Advance

Intermediate-Term Loan by Credibly

Credibly is an emerging Fintech platform, leveraging Data Science and technology with an energetic focus Learn More

Credibly offers two different financing options, a business loan or a merchant cash advance. Both are available up to $250,000 with a repayment period up to 15 months. The funds can be available in less than 48 hours, and must be paid back via a daily fixed payment with an upfront origination fee of 2.5%.

Credibly does not have a minimum credit score to qualify, which makes them a good option for business owners with poor credit. However, they are one of the more expensive options on this list, so be sure to calculate the total cost of your loan offer to make sure you can afford it before signing on the dotted line.

Requirements to qualify:

  • 6 months or more in business
  • $15,000 average monthly bank deposits

Best Funding to Create an Emergency Fund

StreetShares Line of Credit: For established businesses with credit scores over 600

Line of Credit by StreetShares

StreetShares is an affinity-based small business lending marketplace that connects small business owners with accredited Learn More

StreetShares is a veteran-owned business that offers lines of credit up to $100,000 with 3 – 36 month. These are available to established businesses. Similar to other revolving lines of credit, you draw funds when you need them and you only pay interest on the funds you use. Repayments are made in weekly increments.

To qualify, business owners must be 1+ year in business with “reasonable” credit.

Kabbage Line of Credit: For businesses with credit scores under 600

Line of Credit by Kabbage

Kabbage provides working capital to small businesses. They link to your bank or merchant accounts Learn More

Kabbage offers lines of credit for working capital up to $150k. You can withdraw funds once per day, and you only pay interest on the funds you use, making it an option for emergency funds.

Kabbage lines of credit feature 6- or 12-month payback periods. Each month you pay back ⅙ or 1/12 of your loan depending on the length of your repayment term. If you withdrew funds that month, you will also be charged a fee. Fee rates range widely from 1.5% – 10% depending on the health of your business, so watch out of that number and make sure you understand what it means before you take on a Kabbage line of credit.

Qualification for a Kabbage line of credit is based on how healthy your cash flow is, measured by looking at your merchant data.

Bottom Line

There are a large and increasing number of loan options available to business owners, and we expect to see even more changes and new players in the coming years. The above list presents some good options. If you’d like to learn more about the business financing process, check out our ebook: The Ultimate Guide to Financing Your Business in 2018.

Rate This Article

This article currently has 2 ratings with an average of 5 stars.

About the Author — Gerri serves as Head of Market Education for Nav, which provides business owners with simple tools to build business credit and access to lending options based on their credit scores and needs. She develops educational programs and content for small business owners, and works on advocacy initiatives. A prolific writer, her articles have been featured on popular websites such as Yahoo!, MSN Money, ABCNews.com, CBSNews.com, NBCNews.com, Forbes, The Today Show website and many others.

Have at it! We'd love to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and protect yourself. Refrain from posting overtly promotional content, and avoid disclosing personal information such as bank account or phone numbers.

Reviews Disclosure: The responses below are not provided or commissioned by the credit card, financing and service companies that appear on this site. Responses have not been reviewed, approved or otherwise endorsed by the credit card, financing and service companies and it is not their responsibility to ensure all posts and/or questions are answered.

  • Smith Amarion

    Hello, Gerri very valuable information you have shared. Small business loans are the necessary requirement for small business owners. There are different types of term loans today – short term loans, long term loans and medium-term loans, which the entrepreneur can avail upon his requirement and financial status. Financial needs and other industrial expenses that is crucial to keeping your business running. 3 years ago, my I faced the financial problem.