Best Business Loans for October 2026
Find the best business loans to fuel your growth. Compare top-rated options offering competitive rates, flexible terms, and fast funding to meet your business goals.
The Annual Percentage Rates (APR), loan terms, loan amounts, origination fees, and other features shown are estimates only and may not reflect the actual terms available to you. Estimates are based on information you provide, offers from lending partners, and publicly available data. Your actual terms will depend on your business’s financial profile, credit history,
What is a business loan?
A business loan is capital a lender extends to a company, repaid over a set period with interest. Funds can cover almost any legitimate business expense: working capital, equipment, inventory, real estate, hiring, or expansion.
Business loans differ from personal loans in three ways. The application reviews business financials (not just personal credit), the funds must be used for business purposes, and most loans require a personal guarantee from any owner with 20% or more stake.
Small business lending falls into a handful of product types, each built for a different situation.
Types of business loans: which one fits your situation
Here are the six most common types of business financing, with typical ranges and best-fit scenarios.
| Loan type | Typical amount | Typical term | Best for |
|---|---|---|---|
| SBA loan | $500 – $5.5M | 5 – 25 years | Lowest rates, longest terms |
| Term loan | $5K – $5M | 1 – 10 years | One-time investments, expansion |
| Line of credit | $10K – $1M | Revolving, 6 mo – 5 yr draw | Cash flow gaps, working capital |
| Merchant cash advance | $5K – $500K | 3 – 24 months | Fast funding, card-heavy revenue |
| Invoice / AR financing | Up to 90% of invoice | Until invoice paid | B2B companies with 30–90 day terms |
| Commercial mortgage | $100K – $10M+ | 5 – 25 years | Buying or refinancing property |
SBA loans
SBA loans are partially guaranteed by the U.S. Small Business Administration, which lowers lender risk and typically produces the best rates available to small businesses. Banks, credit unions, and approved nonbank lenders issue the loans — the SBA doesn't lend directly.
The main programs are 7(a) loans (up to $5 million, general purpose), 504 loans (up to $5.5 million backed portion, for real estate and major equipment), SBA Express (up to $500,000, faster approval), and Microloans (up to $50,000, through nonprofit intermediaries).
Term loans
A term loan delivers a lump sum upfront, repaid on a fixed schedule over one to ten years. Rates can be fixed or variable, and loans can be secured or unsecured.
Term loans suit one-time investments with a clear return: buying equipment, renovating a location, funding an acquisition, or launching a major marketing push.
Business lines of credit
A line of credit lets you draw funds as needed up to a set limit, paying interest only on what you use. Once you repay, the credit becomes available again during the draw period.
Lines of credit are the right tool for managing cash flow gaps, covering payroll during slow months, or bridging inventory buys before seasonal revenue lands. See the best business lines of credit for current options.
Merchant cash advance (MCA)
An MCA provides a lump sum repaid through a percentage of daily card sales or ACH withdrawals from your business account. Qualification is easier than traditional loans, but the true cost (often expressed as a factor rate) can translate to APRs well above 50%.
MCAs fit businesses with strong card revenue that need funding in days rather than weeks — and can't qualify elsewhere. Compare options at the best merchant cash advance providers.
Invoice financing and factoring
Invoice financing (also called accounts receivable financing) unlocks cash tied up in unpaid B2B invoices. The lender advances a percentage of the invoice — typically 70% to 90% — and you repay when your client pays you.
Factoring is similar but the lender takes over collection. Both suit B2B companies with 30–90 day payment terms — see accounts receivable financing providers for a side-by-side comparison.
Commercial mortgages
A commercial mortgage finances owner-occupied or investment property: office space, retail, warehouses, mixed-use, or multifamily. Terms run 5 to 25 years with down payments typically 15% to 35%.
For a deeper look at property types, qualification, and lender comparison, see the best commercial mortgage lenders.
Two other options worth mentioning: business credit cards work well for ongoing expenses with rewards but carry higher rates than term loans, and dedicated point-of-sale financing fits retailers buying POS hardware and payment systems. Newer businesses with no business credit history can also consider a personal loan based on personal credit — see how personal loans work if you're unfamiliar with the product.
Pro Tip
Prequalify with three to four lenders before submitting any formal applications. Prequalification uses a soft credit pull (no score impact) and gives you real rate ranges and term offers to compare — without committing to any single lender or triggering a hard pull.
How to choose the right business loan
The best business loan for your company depends on four questions. Answer these before comparing offers, and most of the noise drops out.
1. How much do you need, and what will it fund? Smaller, short-term needs often fit a line of credit or microloan; larger, long-term investments call for term loans or SBA 7(a).
2. How fast do you need the money? SBA loans can take 30 to 90 days. Bank term loans run two to six weeks. Online lenders fund in one to three days, and MCAs sometimes fund same-day — but speed costs money.
3. What's your credit profile and time in business? Banks typically want 680+ personal credit and two years in business. Online lenders often accept 600+ credit and six months in business. SBA lenders fall in between but require more documentation.
4. Do you have collateral? Secured loans carry lower rates but put pledged assets at risk. Unsecured loans cost more but don't tie up property.
Business loan requirements: what lenders look for
Most business lenders evaluate a similar set of criteria. The threshold on each varies — banks set the bar highest, online lenders the lowest, SBA lenders somewhere in between.
- Time in business: 6 months (online) to 2+ years (banks and SBA).
- Personal credit score: 600+ for many online lenders, 680+ for banks and SBA.
- Annual revenue: Often $100,000+ for bank loans, $50,000+ for most online lenders.
- Debt service coverage ratio (DSCR): Most lenders want at least 1.15 — meaning your cash flow covers proposed loan payments with a 15% cushion.
- Collateral: Required for secured loans and most SBA loans over $50,000.
- Personal guarantee: Standard for nearly all small business loans, including SBA.
- Industry: Some sectors face restrictions (gambling, cannabis, adult content, speculative investments).
Documents typically required:
- Two years of business and personal tax returns
- Year-to-date profit and loss statement and balance sheet
- Three to six months of business bank statements
- A business plan (for startups, larger loans, or SBA)
- Legal documents: articles of incorporation, operating agreement, business licenses
- Photo ID and proof of ownership
What business loan rates depend on (and how to read APR ranges)
Most business loan listings show a rate range, not a single number. A lender quoting 5.9%–36% serves a wider borrower profile than one quoting 9%–17% — the spread tells you how much risk the lender prices in.
Six factors push you toward the top or bottom of any APR range:
- Personal and business credit scores — the biggest single factor on most applications
- Time in business — two years and up unlocks better pricing
- Annual revenue and cash flow consistency
- Collateral — secured loans price 2–8 points below unsecured
- Loan amount and term — longer terms and larger loans often carry higher rates
- Industry risk — steady-cash-flow industries price better than volatile ones
As of early 2026, the prime rate sits at 6.75%. SBA 7(a) rates are capped at prime plus 2.25% to 4.75% depending on loan size and term, making them among the lowest-cost options for qualifying borrowers.
Online lenders typically price higher because they approve borrowers banks turn away. The tradeoff: faster funding and looser requirements in exchange for a higher APR.
To compare offers apples-to-apples, convert everything to APR — never compare factor rates, monthly interest, or daily rates directly. Add origination fees, prepayment penalties, and any required account or service fees into the total cost.
A loan with a lower headline rate often ends up more expensive once fees are included.
Pro Tip
If you do end up with hard credit pulls from multiple lenders, keep them within a 14-day window. Credit scoring models treat rate-shopping inquiries inside that window as a single pull — so comparing formal offers from three lenders in two weeks costs you one hit, not three.
Where to get a business loan: banks, online lenders, CDFIs, and the SBA
Four main channels lend to small businesses, each with different rates, approval odds, and speed.
Banks and credit unions offer the lowest rates and longest terms, but approvals are the toughest and decisions can take weeks. Existing business banking customers (especially those with business checking accounts and business savings at the same institution) often get better pricing and faster decisions.
Online lenders and marketplace platforms approve a higher percentage of applicants and fund in days rather than weeks. Rates run higher to compensate for looser underwriting, but for established businesses with solid cash flow the gap narrows. The Federal Reserve's Small Business Credit Survey tracks approval rates across lender types each year.
Community Development Financial Institutions (CDFIs) are certified by the U.S. Treasury to serve underserved borrowers — including minority-owned, women-owned, and low-income-area businesses. They lend at favorable terms to applicants who wouldn't qualify with traditional banks.
The SBA guarantees loans through banks, credit unions, and approved nonbank lenders — making it easier to qualify for larger amounts with longer terms than a conventional bank loan. The paperwork is heavier and timelines are longer, but the tradeoff is worth it for most qualifying borrowers.
Pros and cons of business loans
Business loans vs. other funding options
A business loan isn't always the right tool. Here's how common alternatives compare on speed, cost, and best-fit use case.
| Option | Speed | Typical cost | Best for |
|---|---|---|---|
| Business term loan | 1 day – 6 weeks | 7% – 30% APR | One-time investments with clear ROI |
| Business line of credit | 1 day – 2 weeks | 8% – 40% APR | Cash flow gaps, working capital |
| SBA 7(a) loan | 30 – 90 days | Prime + 2.25% – 4.75% | Established businesses, larger needs |
| Business credit card | Same day – 2 weeks | 15% – 30% APR | Ongoing expenses, rewards earning |
| Merchant cash advance | Same day – 3 days | 40% – 150% effective APR | Fast cash with no other options |
| Personal loan | 1 day – 1 week | 8% – 36% APR | Newer businesses with strong personal credit |
| Invoice financing | 1 – 3 days | 1% – 5% of invoice per 30 days | B2B with long payment cycles |
If you want to see real rates before committing, you can compare personal loan offers through a soft-pull marketplace that returns prequalified rates in minutes — useful as a rate benchmark for newer businesses before committing to business-specific products.
Frequently asked questions
How hard is it to get a business loan?
Approval odds depend heavily on lender type. Bank approval rates for small business applicants run roughly 45%–55%, while online lenders approve 70%–80% of applicants. SBA loans fall in between, with approval tied closely to documentation quality and credit profile.
Can I get a business loan with bad credit?
Yes, but options narrow and costs rise. Lenders working with credit scores below 600 typically offer short-term loans, MCAs, or invoice financing. Bad-credit approvals often come with higher rates, shorter terms, and tighter repayment schedules — so compare total cost carefully before accepting.
What credit score do I need for a business loan?
Most banks and SBA lenders look for 680 or higher personal credit. Online lenders frequently approve applicants with 600+, and some revenue-based financing products accept scores as low as 550. Business credit scores matter too if you've built a separate profile through a D-U-N-S number and trade lines.
How long does it take to get a business loan?
Online lenders fund as quickly as one to three business days. Bank term loans take two to six weeks. SBA loans typically run 30 to 90 days, though SBA Express can close in two to three weeks for amounts up to $500,000.
Do business loans require a personal guarantee?
Nearly always. Most small business lenders require a personal guarantee from any owner with 20% or more stake, meaning the guarantor is personally on the hook if the business can't repay. Large, well-established businesses with strong financials occasionally qualify for non-recourse loans, but this is the exception.
Can a startup get a business loan?
Yes, though options are limited for businesses under one year old. SBA Microloans, some online lenders, personal loans used for business, business credit cards, and credit-building strategies are the most accessible paths. Most conventional business term loans require at least one to two years in business.
What's the minimum revenue for a business loan?
Most online lenders want to see at least $50,000 in annual revenue, while banks often require $100,000 or more. SBA lenders are more flexible and focus on cash flow and debt service coverage rather than hitting a specific revenue floor. Newer businesses with limited revenue can still qualify for microloans, equipment financing, and invoice-based products.
Key takeaways
- The best business loan matches your amount, speed, credit, and collateral situation — not just the lowest rate on a list.
- SBA loans offer the best rates and longest terms, but take 30–90 days to close.
- Online lenders trade higher rates for faster approval and looser requirements.
- Prequalification with 3–4 lenders gives real rate ranges without hitting your credit score.
- Always compare APR and total cost, not monthly payments or factor rates.
- Most small business loans require a personal guarantee from any 20%+ owner.
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