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Here are 9 of the best business term loans
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
Fora Financial - Online term loan with Fundera by NerdWallet | 4.7/5 Best for borrowers with bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 4.8/5 Best for fast funding | $250,000 | 625 | with Fundera by NerdWallet |
SBA 7(a) loan with Fundera by NerdWallet | Best for government-guaranteed loans | $5,000,000 | 650 | with Fundera by NerdWallet |
SBA Express loan with Fundera by NerdWallet | Best for fast SBA loans | $500,000 | 650 | with Fundera by NerdWallet |
National Funding - Online term loan with Fundera by NerdWallet | 4.3/5 Best for startups | $500,000 | 600 | with Fundera by NerdWallet |
iBusiness Funding - Online term loan with Fundera by NerdWallet | 4.2/5 Best for long loan terms | $500,000 | 660 | with Fundera by NerdWallet |
TAB Bank - Term loan | Best for businesses with strong revenue | $300,000 | 660 | |
Bank of America Business Advantage Unsecured Term Loan | 5.0/5 Best for low-interest loans | Undisclosed | 700 | Read Review |
Accion Opportunity Fund Small Business Working Capital Loan | 4.9/5 Best for low-revenue businesses | $250,000 | 600 | Read Review |
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Our pick for
borrowers with bad credit
Business owners with personal credit scores as low as 575 may qualify for Fora Financial’s online term loans. Borrowers should be wary of frequent payment schedules, short repayment terms and high factor rates that can make it difficult to understand the total loan cost.
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
Business owners with personal credit scores as low as 575 may qualify for Fora Financial’s online term loans. Borrowers should be wary of frequent payment schedules, short repayment terms and high factor rates that can make it difficult to understand the total loan cost.
Fora Financial stands out as a fast funding option for borrowers who may fall short of qualifying for traditional bank financing. The lender can work with startups and borrowers with bad credit — as long as they have strong revenue. Fora offers large maximum loan amounts and can provide prepayment discounts for those who repay early.
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.
- 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.
Our pick for
fast funding
OnDeck is an online business lender that offers short-term loans up to $250,000. In some states, term loans up to $100,000 can be funded within the same business day as approval.
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%
OnDeck is an online business lender that offers short-term loans up to $250,000. In some states, term loans up to $100,000 can be funded within the same business day as approval.
OnDeck’s short-term loan is a good option for making one-time investments in your business, such as opening a new location or renovating your space. This loan offers fast funding (sometimes as quickly as the same day) for borrowers who may not qualify for more traditional financing options. OnDeck’s short-term loan can also be used to establish and build business credit — as the lender reports your payment history to the three commercial credit bureaus.
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.
- Minimum credit score: 625.
- Minimum time in business: 12 months.
- Minimum annual revenue: $100,000.
- Must have business bank account.
May fund quickly
Our pick for
government-guaranteed loans
SBA loans offer competitive interest rates and repayment terms to businesses that may not be able to access traditional forms of financing. 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 to businesses that may not be able to access traditional forms of financing. They can be difficult to qualify for, however, and are slow to fund.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Low interest rate
Our pick for
fast SBA loans
The SBA allows lenders to use their own procedures to process and underwrite SBA Express loans, which means they can often be approved faster than other SBA loans.
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%
The SBA allows lenders to use their own procedures to process and underwrite SBA Express loans, which means they can often be approved faster than other SBA loans.
SBA Express loans stand out as a faster alternative to standard SBA 7(a) loans. SBA Express lenders can process and approve applications without sending them to the SBA — thereby speeding up the funding timeline. Express loans offer low interest rates and long repayment terms, although they max out at $500,000 (compared to the 7(a)’s $5 million max). These loans are a good option for businesses that can’t get bank financing, but still have good credit and finances.
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.
- Be a for-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Our pick for
startups
National Funding only requires six months in business to qualify for its term loans, making it a good option for newer businesses with strong revenue.
National Funding - Online term loan
Max loan amount
$500,000
Min. credit score
600
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Short-term loans require daily or weekly repayment.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
National Funding - Online term loan
Max loan amount
$500,000
Min. credit score
600
National Funding only requires six months in business to qualify for its term loans, making it a good option for newer businesses with strong revenue.
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital. National Funding has flexible qualification requirements and can fund applications in as little as 24 hours. The lender also offers prepayment discounts for those who can repay their loans early.
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Short-term loans require daily or weekly repayment.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
- Minimum credit score: 600.
- Minimum time in business: Six months.
- Minimum annual revenue: $250,000.
Our pick for
long loan terms
For an online lender, iBusiness Funding offers some of the longest loan terms on the market — up to seven years. This can be especially important if you’re trying to finance a larger purchase, and need to spread payments out over a longer period of time.
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%
For an online lender, iBusiness Funding offers some of the longest loan terms on the market — up to seven years. This can be especially important if you’re trying to finance a larger purchase, and need to spread payments out over a longer period of time.
iBusiness Funding is a good option for qualified business owners who don’t want to wait for bank financing. The lender offers competitive interest rates and long repayment terms, but can fund much more quickly than traditional lenders. And with a large maximum funding amount, this loan can be used for a variety of long-term expansion projects, as well as refinancing existing 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.
- 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
Our pick for
businesses with strong revenue
TAB Bank offers small-business term loans with competitive rates for small businesses. You may qualify with a 660 credit score, but you’ll need high revenue — at least $400,000 annually — to be approved.
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%
TAB Bank offers small-business term loans with competitive rates for small businesses. You may qualify with a 660 credit score, but you’ll need high revenue — at least $400,000 annually — to be approved.
TAB Bank offers competitive interest rates for business owners with good credit — and can sometimes fund faster than an SBA loan. These loans have flexible repayment terms, don’t require collateral and can be used for a variety of purposes. And unlike some banks, which require you to apply over the phone or in person, TAB allows you to fill out an online prequalification form to start the process.
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.
- Minimum credit score: 660.
- Minimum time in business: Two years.
- Minimum annual revenue: $400,000.
Our pick for
low-interest loans
Though you’ll need to be fairly established and have strong personal credit to qualify, Bank of America offers some of the most competitive interest rates on the market. Terms can range from 12 months to 60 months.
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
Though you’ll need to be fairly established and have strong personal credit to qualify, Bank of America offers some of the most competitive interest rates on the market. Terms can range from 12 months to 60 months.
Bank of America’s unsecured term loan offers competitive interest rates and flexible repayment terms — with no collateral required. This loan can help established businesses with good credit expand their operations, purchase equipment or make other long-term investments. Preferred Rewards members may be able to access discounted rates.
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.
- Minimum credit score: 700.
- Minimum time in business: 24 months.
- Minimum annual revenue: $100,000.
Our pick for
low-revenue businesses
Accion Opportunity Fund is a nonprofit, community development financial institution (CDFI) that supports business owners in traditionally underserved communities — including women and minority entrepreneurs. Its annual revenue requirement is $50,000, which is lower than what you’ll find with most lenders.
Accion Opportunity Fund Small Business Working Capital Loan
Max loan amount
$250,000
Min. credit score
600
Est. APR
8.49-24.99%
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared with online lenders.
- Charges an origination fee.
- Not available in all U.S. states.
Accion Opportunity Fund Small Business Working Capital Loan
Max loan amount
$250,000
Min. credit score
600
Est. APR
8.49-24.99%
Accion Opportunity Fund is a nonprofit, community development financial institution (CDFI) that supports business owners in traditionally underserved communities — including women and minority entrepreneurs. Its annual revenue requirement is $50,000, which is lower than what you’ll find with most lenders.
Accion Opportunity Fund (AOF) stands out as an affordable option for business owners who can’t qualify for traditional financing. AOF offers competitive interest rates, long repayment terms and flexible qualification requirements. Startups and borrowers with bad credit may qualify. This lender also targets its funding efforts toward minority-, women- and low-to-moderate-income entrepreneurs.
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared with online lenders.
- Charges an origination fee.
- Not available in all U.S. states.
- Minimum credit score: 600.
- Minimum time in business: 12 months.
- Minimum annual revenue: $50,000.
What is a business term loan?
A business term loan is a lump sum of money that’s repaid over a set period of time, plus interest. Term loans can be used for multiple purposes such as real estate, debt consolidation or working capital.
Because they typically come with fixed interest rates and set monthly payments, term loans can be one of the most affordable types of business financing. They are offered through banks, online lenders and other non-bank, alternative lenders.
Business term loan basics
Loan Amount$5,000 to $5 million
Terms6 months to 7 years
APR6% to 99%
Funding Speed1 day to several weeks
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) |
|
|
Medium-term loans (1 to 5 years) |
|
|
Long-term loans (5+ years) |
|
|
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 the trade off is typically 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, business 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 cash tied up in unpaid invoices, you may be able to leverage those invoices for an advance of cash. While invoice financing allows you to use invoices as collateral for a business loan, invoice factoring involves selling your invoices to a factoring company at a discount. 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.
» MORE: Business loan vs. line of credit
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 February 6, 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.
See Your Loan Options