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Whether it’s to help with cash flow, pay for new equipment, or fund some other business-related expenses, business loans are designed to provide financial assistance for businesses as needed. Similar to other loan types, such as personal loans, business loans involve creating debt and then repaying it with interest.

Luckily, finding the right financing for your business’s needs has never been easier. The scope for borrowing has extended far beyond traditional banks to include a wealth of online lenders— providing businesses with a wider range of business loan options and, in some cases, looser requirements and more flexible terms.

Let’s take a look at a few of the most popular business loan types, important requirements that will get you qualified, and some of our favorite online lenders that can help get you started.

Online Business Loan Lenders & Markets

• Biz2Credit
• Fundera
• Lendio

Explore Your Options: Types of Business Loans

“Business loan” is something of an umbrella term and encompasses a whole range of financing types, such as SBA loans, cash advance loans, lines of credit, invoice financing, and more to cater to a borrower’s specific needs.

Keep in mind that the below business loan amounts, terms, and requirements can all vary depending on the lender and your business’s financial profile.

SBA Loans

A Small Business Administration (SBA) loan is a type of loan that is less of a risk to the lender since it’s partially guaranteed by the government, meaning better terms for the borrower. While the SBA used to only work primarily with traditional banks, they now work with a large network of approved lenders who will lend that money to small businesses.

• Amount: SBA loans are larger business loans that typically range from $5,000 up to $5 million.
• Terms: Since the government is backing up this loan type, businesses can secure lower APRs and longer repayment terms of up to 25 years.
• Qualifications: These loans are a bit harder to qualify for and often have a general minimum for businesses, such as 2+ years in business, a 640+ credit score, and at least $100,000+ in annual revenue. Again, these numbers vary depending on the lender and the loan amount desired.
• Good For: This type of loan is a great option for borrowers who don’t need super quick funding and are able to wait a bit longer than other loan types.

Cash Advance Loans

Also known as merchant cash advance loans, this type of business loan is actually not quite a loan. How it works is a lending institution will give you a cash advance in exchange for a piece of your future sales.

As a result of this setup, it’s common to see lower payments when sales are low and higher payments when sales are high. Typically, the lender will determine a factor rate based on a few different risk factors (such as credit score and business performance). These will be the fees you pay on a cash advance loan.

• Amount: Cash advance loans typically range from $5,000 up to $250,000.
• Terms: The loan term for a cash advance is normally up to two years.
• Qualifications: This loan type is known for being less strict to qualify for than other loan types. Lenders may require a monthly credit card transaction minimum or financial statements to validate past sales.
• Good for: Businesses with high credit card sales and borrowers who need fast financing.

Business Line of Credit Loans

A line of credit is another popular and flexible method for businesses to receive financing. It allows you the ability to borrow up to a certain limit and pay interest only on the money you actually borrow. It works very similarly to a credit card, which lets you draw money and repay it as you go with interest.

The difference between the two is that lines of credit often come with much higher credit limits and lower rates than credit cards. Additionally, credit cards are always unsecured whereas a line of credit can be secured or unsecured.

• Amount: Can be as low as $1,000 or as high as $1 million.
• Terms: Terms will vary depending on the lender, but are often around 6 months to 5 years.
• Qualifications: Lines of credit loans are also a bit lenient on credit score, but they will typically require a business history of at least 6 months or even a year. Lenders will also look at annual revenue and may have a minimum of $50,000 or more.
• Good for: Borrowers who want flexibility.

Recommended Business Loan Companies

• Funding as soon as 72 hours
• Flexible interest-only payments

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• Reputable marketplace with solid customer service
• A lender network of over 30 lenders and partners

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• Flexible loan terms and amounts
• Get approved in minutes and funded in 24 hours

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Business Term Loans

A business term loan is a lump sum a lender will provide you which will be paid back monthly and with a fixed interest rate. The “term” in business term loans refers to the repayment term length and typically ranges from one to five years.

This loan type works the same way a personal loan does, but it’s designed specifically for businesses in that it allows a borrower to limit their personal liability in the case of default or business hardship. It also helps a company build financial credibility.

With that said, business term loans are harder to qualify for than a traditional personal loan. They will sometimes require collateral, a minimum number of years in business, and minimum annual revenue.

• Amount: Up to $1 million
• Terms: 1 - 5 year loan term
• Qualifications: Requirements are stricter since term loans tend to be longer. Lenders will often require at least 1 year in business and an annual revenue minimum of $50,000.
• Good for: Borrowers looking for larger loans which they can repay over a longer period.

Invoice Factoring

Also known as business factoring loans, invoice financing is a means by which businesses can improve their cash flow by borrowing money against the amounts due by clients. Instead of having to wait idly by for money to come in from client invoices, businesses can be proactive, continue reinvesting in their operations, and move forward through invoice financing.

This form of short-term borrowing works most commonly through factoring. This is where a business will sell their unpaid invoices to a lender who will then pay them anywhere between 70% - 85% of the amount upfront. Once the lender receives the invoice money from a client, they will remit the difference to the business who will have to pay a fee or interest for the service.

• Amount: Since invoice factoring is more similar to a cash advance than a traditional loan, the amount will vary greatly depending on the lender.
• Terms: Up to 24 weeks
• Qualifications: Requirements are typically looser for invoice factoring and many lenders will only require a minimum credit score of 530.
• Good for: Borrowers looking for steady cash flow for their business.

Learn About Our Recommended Business Loan Providers

Biz2Credit

Biz2Credit

Flexible Terms & Quick Funding

View Rates Biz2Credit review »

575

Min Credit Score

Min 10%

APR. Fixed Rate

$25K-$6M

Loan Amount

12-36 months

Repayment terms

N/A

Soft Credit Pull

Marketplace

Lender Type

Dependent upon commercial financing type

Other Fees

$250-$400

Origination Fee

N/A

Prepayment Fee

72 Hours

Funding Time

$250K

Annual Revenue

12+ Months

Time in Business

Pros & Cons

• Funding possible within 24-72 hours of a signed and approved contract.
• Variety of financing options available from Biz2Credit and other participating lenders.
• Free online application and free use of business tools.
• Dedicated support from financing experts.

• May be an expensive option due to closing fees.
• Financing options may differ from state-to-state.
• No live chat option on their website.
• Undisclosed interest rates and fees

Business Loan Types

• Business Term Loan
• Working Capital Loans
• Term loans
• Short-Term Business Loan
• Merchant Cash Advances
• Commercial Real Estate Loans

Biz2Credit is an online lender specializing in small business funding solutions. They provide loans tailored to businesses with annual revenue of at least $250,000. Loan amounts range from $25,000 to $6 million, with repayment terms between 12 and 36 months.

Why Biz2Credit?

• Wide funding range: Access funding from $25,000 to as high as $6 million, accommodating businesses of all sizes.
• Fast approval: Receive approval and funding within 72 hours to meet urgent business needs.
• Competitive rates: Biz2Credit offers some of the most attractive rates in the market.
• Customized solutions: Biz2Credit works to provide loans that align with your business’s unique financial needs and goals.
• Dedicated support: Benefit from personalized customer service to guide you through the application and funding process.

Fundera

Fundera

Get funded faster than at your bank

View Rates Fundera review »

550

Min Credit Score

Min 7%

APR. Fixed Rate

7-30%

APR. Variable Rate

$5K-$5M

Loan Amount

1-10 years

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

None

Other Fees

Varies

Origination Fee

Varies

Prepayment Fee

24 Hours

Funding Time

$130K

Annual Revenue

12+ Months

Time in Business

Pros & Cons

• Multiple financing options designed to help businesses grow and succeed
• Convenient shop and comparison tool
• Free service
• Matched with experienced Funding Advisor who helps every step of the way

• Loan terms and conditions not disclosed until after completing an application
• Once deciding upon a product, you’ll work with the lender instead of Fundera
• Potentially high interest rates and eligibility requirements

Business Loan Types

• SBA Loans
• Business Line of Credit
• Invoice Financing
• Equipment Financing
• Term loans
• Short-Term Business Loan
• Merchant Cash Advances
• Startup Loans

Fundera is an online marketplace that helps small business owners compare and secure loans from a network of trusted lenders. Loan amounts range from $5,000 to $5 million, and repayment terms vary by lender, typically ranging from 3 months to 25 years.

Why Fundera?

• Comprehensive marketplace: Compare multiple loan options, including SBA loans, term loans, lines of credit, and invoice financing, all in one place.
• Tailored recommendations: Fundera matches you with the best financing options based on your business’s specific needs and financial situation.
• Competitive rates: With attractive rates, Fundera ensures access to affordable borrowing solutions.
• Expert guidance: Work with Fundera’s loan specialists to navigate the funding process and find the ideal loan for your business.
• Hassle-free process: Save time with a single application that connects you to multiple lenders, simplifying your search for funding.

Lendzi

Lendzi

Compare lending options and get funded fast

View Rates Lendzi review »

500

Min Credit Score

Min 7%

APR. Fixed Rate

$5K-$5M

Loan Amount

Varies

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

Varies

Other Fees

1-6%

Origination Fee

Varies

Prepayment Fee

24 Hours

Funding Time

$240K

Annual Revenue

12+ Months

Time in Business

Pros & Cons

• Multiple business financing options available, ranging from small business loans to commercial real estate loans to lines of credit
• Streamlined, intuitive application process with lender comparison option
• Time to funding could be within 24 hours
• Top-notch customer service team of finance professionals

• As a marketplace, specific terms, rates, and fees are not indicated until you apply with a partner lender

Business Loan Types

• SBA Loans
• Business Line of Credit
• Business Term Loan
• Equipment Financing
• Term loans
• Merchant Cash Advances
• Startup Loans
• Commercial Real Estate Loans

Lendzi is an online marketplace that connects small businesses with lenders offering various funding options. With loan amounts ranging from $5,000 to $2 million, Lendzi helps businesses find flexible solutions tailored to their financial needs. Loan terms vary by lender, typically ranging from 6 to 48 months, with interest rates starting at 6% APR.

Why Lendzi?

• Diverse funding options: Access a wide range of loan products, including term loans, lines of credit, and equipment financing.
• Personalized matchmaking: Lendzi connects you with lenders best suited to your business’s financial profile and goals.
• Competitive rates: Partnering with lenders offering competitive rates, ensuring affordable borrowing options.
• Flexible loan terms: Find repayment plans that range from short-term to long-term to suit your cash flow.
• Simplified process: Lendzi’s streamlined application makes securing the funding your business needs easy.

Most Important Requirements for Business Loans

If you’re new to shopping around for business loans, you should be aware that what it takes to qualify isn’t quite the same as other loan types, such as personal loans. Business loans often come with their own set of requirements, such as:

• Credit Score: Lenders use your credit score to determine how risky you are as a borrower. They’ll often have a credit score minimum you must meet.
• Annual Revenue: How much revenue your business makes each year is a big indicator of its overall performance and how likely you are to pay back a loan. Many lenders will have an annual revenue minimum of around $50,000 - $150,000, depending on the loan type and amount.
• Time in Business: Lenders feel more comfortable lending to businesses that aren’t brand new, and may require a minimum of 1 or 2 years in business before lending you anything.
• Collateral: Some, but not all, business loans will require collateral, making the loan secured and less risky for the lender. This can be a valuable asset such as inventory, equipment, or real estate.

Conclusion

Business loans and all the different types can be tricky to navigate for new borrowers, but the variety of options available make it easier than ever for business owners to get what they need. Instead of staying tethered to the limited products available from traditional banks, venture out and see what kind of financing and rates you can get with online lenders.

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
**All businesses are unique and are subject to approval and review.