Whether you’re launching a startup, expanding operations, or managing cash flow, a business loan can provide the capital you need to grow. This guide covers everything from loan types to approval tips—helping you secure the best financing for your business.
What Is a Business Loan?
A business loan provides capital that companies repay with interest over time. Lenders evaluate:
- Business revenue & profitability
- Credit score (personal & business)
- Time in business (typically 6+ months)
- Collateral (for secured loans)
Key Features:
- Loan amounts: $5,000–$5 million+
- Terms: 3 months to 25 years
- APR range: 5%–99% (varies by loan type)
7 Types of Business Loans
1. Term Loans
- Best for: Large investments (equipment, expansion)
- Amounts: $25,000–$500,000
- Terms: 1–10 years
2. SBA Loans
- Best for: Low-rate, long-term financing
- Amounts: Up to $5 million
- Terms: Up to 25 years
3. Business Lines of Credit
- Best for: Flexible, recurring expenses
- Amounts: $10,000–$250,000
- Draw period: 6 months–5 years
4. Equipment Financing
- Best for: Machinery/technology purchases
- Amounts: Up to 100% of equipment value
- Terms: 1–10 years
5. Invoice Factoring
- Best for: Immediate cash flow
- Amounts: 70%–90% of invoice value
- Fees: 1%–5% per month
6. Merchant Cash Advances
- Best for: Quick funding (high cost)
- Amounts: $5,000–$250,000
- Repayment: % of daily sales
7. Startup Loans
- Best for: New businesses (6–12 months old)
- Amounts: $10,000–$250,000
- Requirements: Strong personal credit
Where to Get a Business Loan?
| Lender | Best For | Approval Time | Min. Requirements |
|---|---|---|---|
| Banks | Lowest rates | 2–8 weeks | 680+ credit, 2+ years in business |
| Online Lenders | Fast funding | 24 hours–5 days | 600+ credit, 6+ months |
| Credit Unions | Member rates | 1–4 weeks | 650+ credit, 1+ year |
| SBA Lenders | Large loans | 30–90 days | 650+ credit, strong finances |
| Alternative Lenders | Bad credit | 1–3 days | 500+ credit, 3+ months |
Top Lenders:
- Best Overall: Bank of America, Wells Fargo
- Fast Funding: OnDeck, Kabbage
- Startups: Fundbox, BlueVine
- Bad Credit: Fora Financial, Credibly
How to Get Approved?
- Check both personal & business credit scores
- Prepare financial documents (tax returns, bank statements)
- Write a business plan (for larger loans)
- Compare 3+ lenders
- Consider collateral to improve terms
Business Loan Alternatives
- Business credit cards (0% intro APR options)
- Crowdfunding (Kickstarter, GoFundMe)
- Investors (Angel, VC funding)
- Grants (SBA, local programs)
Disclaimer: Terms vary by lender. Consult a financial advisor before borrowing.