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Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 of the best business term loans
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for government-guaranteed term loans | $5,000,000 | 650 | with Fundera by NerdWallet |
SBA Express loan with Fundera by NerdWallet | Best for government-guaranteed term loans | $500,000 | 650 | with Fundera by NerdWallet |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.7/5 Best for online term loans | $1,500,000 | 570 | with Fundera by NerdWallet |
iBusiness Funding - Online term loan with Fundera by NerdWallet | 4.2/5 Best for online term loans | $500,000 | 660 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 4.8/5 Best for online term loans | $250,000 | 625 | with Fundera by NerdWallet |
TAB Bank - Term loan | Best for low-interest business term loans | $300,000 | 660 | |
Bank of America Business Advantage Unsecured Term Loan | 5.0/5 Best for low-interest business term loans | Undisclosed | 700 | Read Review |
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Our picks for
government-guaranteed term loans
SBA loans offer competitive interest rates and repayment terms. They can be difficult to qualify for, however, and are slow to fund.
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
Low interest rate
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.50-14.00%
SBA loans offer competitive interest rates and repayment terms. They can be difficult to qualify for, however, and are slow to fund.
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
Qualifications:
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Low interest rate
SBA Express loan
Max loan amount
$500,000
Min. credit score
650
Est. APR
10.50-14.00%
Pros
- Can choose between term loan and line of credit.
- Competitive interest rates and long repayment terms.
- Faster turnaround times than other SBA loans.
- Government guarantee makes it somewhat easier to qualify compared to conventional business bank loans.
Cons
- Loan amounts max out at $500,000.
- Can still be difficult to meet minimum eligibility requirements.
- May still take a total of 30 days or more to receive funding.
SBA Express loan
Max loan amount
$500,000
Min. credit score
650
Est. APR
10.50-14.00%
SBA loans offer competitive interest rates and repayment terms. They can be difficult to qualify for, however, and are slow to fund.
SBA Express loans are available in amounts up to $500,000 as either a term loan or line of credit. These loans typically fund faster than standard 7(a) loans.
Pros
- Can choose between term loan and line of credit.
- Competitive interest rates and long repayment terms.
- Faster turnaround times than other SBA loans.
- Government guarantee makes it somewhat easier to qualify compared to conventional business bank loans.
Cons
- Loan amounts max out at $500,000.
- Can still be difficult to meet minimum eligibility requirements.
- May still take a total of 30 days or more to receive funding.
Qualifications:
- Be a for-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Our picks for
online term loans
Online lenders offer short- and medium-term loans that can fund quickly and have flexible qualification requirements.
Fora Financial - Online term loan
Max loan amount
$1,500,000
Min. credit score
570
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
- Charges an origination fee.
Fora Financial - Online term loan
Max loan amount
$1,500,000
Min. credit score
570
Online lenders offer short- and medium-term loans that can fund quickly and have flexible qualification requirements.
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
- Charges an origination fee.
Qualifications:
- In business for at least six months.
- At least $20,000 per month in revenue.
- No open bankruptcies or dismissed bankruptcies within the past year.
iBusiness Funding - Online term loan
Max loan amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
- iBusiness Funding also offers SBA loans up to $5 million.
Cons
- Charges an origination fee.
- Must be in business for a minimum of 24 months.
- Minimum credit score is higher than some other lenders.
May fund quickly
iBusiness Funding - Online term loan
Max loan amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Online lenders offer short- and medium-term loans that can fund quickly and have flexible qualification requirements.
iBusiness Funding acquired Funding Circle in 2024. Its online term loan is an option for established businesses that are financing an expansion or refinancing debt.
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
- iBusiness Funding also offers SBA loans up to $5 million.
Cons
- Charges an origination fee.
- Must be in business for a minimum of 24 months.
- Minimum credit score is higher than some other lenders.
Qualifications:
- Minimum credit score: 660.
- Minimum time in business: 24 months.
- Minimum annual revenue: $50,000.
- No bankruptcies in the past seven years.
May fund quickly
OnDeck - Online term loan
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Charges origination fee.
May fund quickly
OnDeck - Online term loan
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
Online lenders offer short- and medium-term loans that can fund quickly and have flexible qualification requirements.
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Pros
- Cash can be available within the same business day (does not apply in California or Vermont).
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Cannot fund North Dakota-based businesses.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Charges origination fee.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: 12 months.
- Minimum annual revenue: $100,000.
- Must have business bank account.
May fund quickly
Our picks for
low-interest business term loans
Bank loans typically offer the lowest interest rates, but you’ll need strong credit and finances to qualify.
TAB Bank - Term loan
Max loan amount
$300,000
Min. credit score
660
Est. APR
8.99-35.99%
Pros
- No prepayment penalty.
- Terms range from 36 to 60 months.
- Bank loan with online application process.
Cons
- Requires high minimum credit score.
- Origination fee and documentation fee charged on all loans.
- Requires business lien and personal guarantee.
TAB Bank - Term loan
Max loan amount
$300,000
Min. credit score
660
Est. APR
8.99-35.99%
Bank loans typically offer the lowest interest rates, but you’ll need strong credit and finances to qualify.
TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.
Pros
- No prepayment penalty.
- Terms range from 36 to 60 months.
- Bank loan with online application process.
Cons
- Requires high minimum credit score.
- Origination fee and documentation fee charged on all loans.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 660.
- Minimum time in business: Two years.
- Minimum annual revenue: $400,000.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
- Can be slow to fund.
- Prepayment fees may apply to early repayments.
- Must be an existing Bank of America customer to apply online.
- Charges an origination fee.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Bank loans typically offer the lowest interest rates, but you’ll need strong credit and finances to qualify.
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
- Can be slow to fund.
- Prepayment fees may apply to early repayments.
- Must be an existing Bank of America customer to apply online.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 700.
- Minimum time in business: 24 months.
- Minimum annual revenue: $100,000.
Is a term loan right for your business?
Pros
You can borrow large amounts of money to finance expansion or growth.
Long repayment terms can make big investments more affordable.
Repaying term loans on time may help you build business credit.
Loans from online lenders can be approved and funded quickly, usually within a few days to a week.
Qualification requirements for online lenders may be looser than those for traditional banks.
Cons
Less flexibility than business lines of credit, as payments begin immediately after funding.
Shorter term loans may carry high costs and frequent repayments, although this depends on the lender.
SBA loans are low cost but carry strict requirements and can take a while to fund.
Collateral — an asset, such as equipment or real estate that the lender can sell if you can’t make payments — may be required.
Recurring repayments may constrict cash flow if you borrow too much or have inconsistent sales.
How do business term loans work?
Business term loans can range in size from $5,000 to $5 million, with annual percentage rates (APRs) falling anywhere from 6% to 99%. These loans often have fixed interest rates, but you may find some lenders charge a variable rate that changes based on the market. Additional fees, like closing and origination fees, may vary based on the lender and the type of term loan.
Like mortgages and car loans, small-business term loans usually follow an amortization schedule. This means most of your payment goes toward paying interest at the beginning of the loan, and more toward principal near the end. Term loans can often be repaid early to save on interest, although lenders may charge a prepayment penalty.
Businesses can use term loans for a variety of purposes, including:
- Purchasing equipment or inventory.
- Renovating an existing location or expanding to a new location.
- Buying commercial real estate.
- Hiring new employees.
- Working capital.
- Refinancing existing debt.
Types of business term loans
Type of term loan | The good | The bad |
|---|---|---|
Short-term loans (1 to 2 years) |
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Medium-term loans (1 to 5 years) |
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Long-term loans (5+ years) |
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Minimum qualifications for a business term loan
How to apply for a business term loan
If you think a term loan is right for your financing needs, you can follow these steps to apply:
- Evaluate your qualifications. Check your credit score, annual revenue and time in business. These are three of the key business loan requirements lenders will look at to determine whether you qualify for financing.
- Compare lenders. Decide which type of lender is best for your needs. Online lenders may have more flexible qualifications and faster funding times but higher interest rates. Banks, credit unions and SBA lenders can offer more affordable rates, but their products can be harder to qualify for.
- Prepare your documentation. Once you’ve decided which lender is right for you, prepare the documentation for your application. Commonly required documents include business financial statements, business and personal tax returns, business and personal bank statements, and business legal documents. (Some online lenders require only minimal documentation to apply.) As much as you can, keep up-to-date financial records and meet with your business accountant on a regular basis.
- Complete and submit the application. Follow the lender’s instructions to complete the application and provide all necessary documents. Take advantage of any assistance the lender offers to guide you through the application process.
» Use our guide for more information on how to apply for a small-business loan.
Alternatives to business term loans
If you’re unsure whether a term loan is right for your business, or you’re having a hard time qualifying for one, consider these alternatives:
- Business lines of credit. Instead of borrowing one lump sum of cash and paying it off over a set period, lines of credit allow you to continue to borrow funds on an as-needed basis, up to a predetermined amount. Once you repay the initial amount borrowed, you can take more money out. This gives business owners a bit more flexibility, especially when covering short-term or unexpected needs.
- Invoice factoring or invoice financing. If you run a business-to-business company and have unpaid invoices, you may be able to leverage those invoices for an advance of cash. These tend to be best for business owners who need money quickly and can’t qualify for more traditional financing, like a term loan or line of credit.
- Merchant cash advances. If you can’t qualify for other types of business financing and have consistent credit card sales, a merchant cash advance (MCA) may be an option. MCAs serve as an advance of money, which you repay using a percentage of future debit or credit card sales. NerdWallet recommends exhausting all other financing options before turning to MCAs, since they’re expensive and not federally regulated.
Frequently asked question
With a business term loan, you borrow a lump sum of cash upfront for a specific purpose and repay the money over a set period of time with fixed, equal payments. These loans function similarly to car loans, student loans and mortgages.
SBA 7(a) loans are a good example of a business term loan. These loans have terms up to 25 years and funding amounts up to $5 million. The repayment terms and loan amount you receive vary based on your use case and your qualifications.
SBA 7(a) loans are well-suited for long-term investments in your business.
Business term loans can be categorized into the following three types: short-term loans, medium-term loans and long-term loans.
Last updated on January 2, 2025
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms
- Flexible payment options
- Fast funding times
- Accessible customer service
- Reporting of payments to business credit bureaus
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
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