The Best Business Loans of 2021

As a business owner, you’ll probably need a loan at one point or another. Thankfully, financial institutions are there to provide various kinds of loans to help you grow your business. Start-ups and large-cap companies are not that different in that you need capital to cover operations, expansion, inventory, and additional equipment. So we’ve summarized the best business loans of 2021 in one spot for you, so you can make the right choice.

Chances are you’re reading this article because you need a business loan. Start by searching online. You’d be surprised to find just how many options you have from credit unions, banks, and alternative lenders. If you want to short-circuit the effort, you can connect directly with 5 lenders by accessing our platform (absolutely free).

We actually recommend exploring alternative financing options, mainly because we believe that online lenders offer the best business loans for 2021. But that’s your call. Keep reading to learn how these loans work, and to find the best one for you. Or access our platform directly, and get contacted by an approved lender today!

Top 12 Best Business Loans for 2021

LendingBuilder took it upon ourselves to go through the different loan providers, and we’ve come up with a list of what we believe are the top 12 best business loans of 2021 for small businesses. Here’s the top lenders:

• BlueVine – Lightning speed access to lines of credit up to $250,000
• LoanBuilder – High loans of up to $500,000 with few borrower requirements
• Lendio – Get the capital you need in less than 24 hours
• Libertas Funding – One-day process for applications made before 9:30 A.M.
• OnDeck – Over $13 billion of funding delivered to businesses globally
• Fundbox – Trusted by over 100,000 businesses and uses industry-standard security protocols
• Funding Circle – Offers SBA loans ranging from $20,000 to $5 million without a prepayment rate
• Kabbage – Minimum requirement: $50,000 annual revenue OR $4,200 per month
• Credibly – Quick prequalification for up to $400,000 in small business funding
• Lending Club – Top P2P marketplace for business loans with over $50 billion total borrowed amount
• Kiva – Take out microloans up to $15,000 at 0% interest
• SmartBiz – With over 90% of approved and funded loan applications

To help you choose which of these business loans to use, let’s compare their features. 

BlueVine

At the top of the list of the best business loans in 2021 is Bluevine. Used by more than 20,000 businesses across all types of industries, BlueVine is no doubt one of the best loan providers out there. This company has already provided more than $2 billion worth of financing since it started in 2014.

BlueVine is famous for its fast application process, which lasts an average of 5 minutes. They offer loans ranging from $5,000 to $5 million at interest rates as low as 4.8%. Unlike banks and other financial institutions, BlueVine won’t require your credit score during application. Credit checks, along with essential scrutiny, only take place after you accept their offer.

The business loans Bluevine offers are not for everyone, so take note of some eligibility restrictions. To qualify for a loan, you must meet these three minimum criteria:

1.     Must be in business for at least six months
2.     Has a FICO score of at least 600+
3.     Has a monthly revenue of at least $10,000

With these high minimum requirements, startups may have difficulty qualifying for BlueVine loans.

Three types of financing solutions BlueVine offers:

• Line of Credit – Access to credit lines up to $250,000 with zero prepayment penalties, and you only have to pay interest for the total amount you used
• Term Loan – Cash lump sum of up to $250,000 with fixed weekly rates and zero origination fees
• Invoice Factoring – Borrow up to $5 million while having the freedom to choose which unpaid invoices you want to fund

LoanBuilder

LoanBuilder offers some of the most appealing business loans available today. LoanBuilder is a PayPal subsidiary that merged with Swift Capital and a few other alternative lenders. LoanBuilder provides an online-first approach to lending. Prefer talking to a human? No problem. You can also apply for a loan by talking to a specialist over the phone. 

If you plan to use LoanBuilder, keep in mind that LoanBuilder offers $5,000 to $500,000 short-term business loans, slightly lower than what’s available on other platforms. However, these loans’ term lengths range from 13 to 52 weeks, which is also a little longer. They carry fixed interest rates, and payments are debited weekly from your business checking accounts. LoanBuilder doesn’t charge origination fees or prepayment penalties. 

To apply for a LoanBuilder business loan, you have to complete a questionnaire, which covers basic business information, and provide your company’s tax ID number. Then, they will process your application and notify you once you get preapproved. While some loan application results affect a borrower’s credit score, this one does not, so you don’t have to worry about a potential score drop.

Lendio

Unlike other lending firms that directly offer loans to businesses, Lendio is a small business loan marketplace. Meaning, they work with a network of lenders that you can go to for a loan. For that reason, they typically appear at the top of any best business loans of 2021 list you come by. Some popular companies that belong to Lendio’s network include American Express, Bank of America, and PayPal, among many others. 

To apply for a business loan through this option, all you need to do is fill out an online form, and then Lendio will match you up with the lender or loan program that meets your needs. This step takes no more than 15 minutes. Depending on the type and status of your business, Lendio may ask for additional information or documentation. 

If you qualify, you can receive the fund in less than a day. Don’t worry because most loan applications with Lendio get approved. The Lendio marketplace has already funded over 73,000 loans, spending a staggering amount of over $1.4 billion for nine years.  

Since the Lendio marketplace consists of many different lending firms, expect to find a great variety of loan programs. Generally, Lendio works with lenders providing standard financing options, such as business lines of credit, equipment financing, startup loans, commercial mortgage, term loans, and credit cards.

Libertas Funding

If you’re looking for a term loan to finance a significant commercial project, consider Libertas Funding. They provide business term loans with unique features, including up to $2.5 million funding payable within 24 months, merchant cash advances ranging in value from $7,500 to $1,000,000 with prepayment discounts of up to 25%, and many more.

 You can use Libertas Funding loans to purchase new equipment or bulk inventory, complete a major construction or renovation project, or obtain working capital. To qualify, you must meet a few eligibility requirements:

1.     Must be in business for at least six months
2.     At least $150,000 in annual revenue
3.     A personal credit score of at least 550
4.     Must be industry fit

In case you are exploring partnership opportunities with Libertas Funding, you can enjoy many benefits, including up to over $1 million funding, flexible refinance options, loyalty benefits for you and your clients, and available syndication for select partners. 

OnDeck

OnDeck is one of the country’s largest financing companies, and offers some of the most competitive loan options available today. They operate in the United States and worldwide, with over $13 billion of funding delivered to businesses across more than 700 industries. 

Visit their website to get the most up-to-date information about their products and services. It’s crucial to only base your application on official data from their website because other sources provide confusing claims. For instance, some websites say that OnDeck caters to businesses with bad credit when, in fact, they require a sizable minimum FICO score. 

To qualify for an OnDeck business loan, your business must be at least one year old. Your FICO score must be no less than 600. Your annual revenue must be at least $100,000, and you must have an established business bank account. Note that OnDeck has a strict policy on loan applications for firearms, gambling services, adult entertainment, and drug dispensaries. They decline this immediately.

At present, OnDeck offers two types of loans. One is a term loan, ranging from $5,000 to $500,000, depending on your qualification and needs. Its term lasts from 3 months to 3 years, and you can pay it daily or weekly. The other is a line of credit, which ranges from $6,000 to $100,000. You can pay for it weekly for 12 months or a shorter period without worrying about prepayment penalties.

Fundbox

Are you new to business financing? Are there strict loan qualification terms that your business doesn’t meet just yet? Then, Funbox may just be the best option for you. The minimum requirements to qualify for a Funbox loan include being registered in the U.S., having at least 500 personal credit score and business checking account, and providing three months of business banking activity.

Funbox has helped thousands of small businesses in the country, thanks to its flexible terms. With 12 and 24-week term repayment options and as low as 4.66% interest rate, business loans can’t get better than this. However, it’s important to note that Fundbox specializes in trade or vendor credit. In this arrangement, you don’t get the money to pay for your inventory. Funbox pays your vendors, and you pay Fundbox based on your loan term agreement.

Funding Circle

Funding Circle offers some of the most flexible loan programs on the market today. It’s no wonder this platform appeals to small businesses from various industries. As proof, Funding Circle has already spent over $10.9 billion to finance over 77,000 companies worldwide. 

That said, Funding Circle loans are not for everyone. They are for specific sectors and purposes, including business acquisition, business debt consolidation, minority business owners, and women-owned businesses. If you qualify for this loan option, you can enjoy several benefits, such as loan amounts ranging from $25,000 to $500,000 at annual interest rates as low as 4.99%. Application only takes six minutes on average, even for large loans. 

When you choose Funding Circle to finance your business, be ready to pay a 3.49% to 5.99% origination fee. So far, this is the only disadvantage of this loan option, although considerably minor. If you want to estimate your possible monthly payments based on the loan amount you need and other essential factors, consider using the calculation tool available on Funding Circle’s website. 

Kabbage

Simple, fast, and lenient—this is how many businesses describe their experience with Kabbage. True enough, this option has some of the most appealing features among all of the financing options currently on offer. It comes in the form of revolving credit, which could go up to $250,000 with a monthly fee that ranges from 1.5% to 10% of the principal loan amount.

Apart from the wide-ranging and fixed fees, you can also choose from three different term lengths—6, 12, and 18 months—each with corresponding payment terms. In case you want to pay off the loan early, you don’t have to pay a prepayment penalty. 

The application process is relatively easy, too, involving no more than filling out a form that requires basic business information, including your business bank account. Kabbage will ask for proof that your business is at least a year old and generates a revenue of at least $50,000 per year or $4,200 per month.

Credibly

Providing funding to 19,000+ small and medium-sized businesses across the United States since 2010, Credibly lives up to its name. Whether you need working capital or a considerable fund to support your company’s expansion, you’ll find Credibly an excellent place to get financing. Here are the different types of loans Credibly offers:

• Working capital loan
• Business expansion loan
• Business line of credit
• SBA loans
• Merchant Cash Advance
• Invoice factoring

Depending on the type of loan you apply for, you can get loans up to $5 million at an interest rate starting at 9.99%. There’s a one-time setup fee of 2.5%, which Credibly deduct from your proceeds. You need to have at least 600 FICO score, $15,000+ average monthly bank deposits, $3,000+ in average daily balances, and three years of active operation to qualify. Credibly may also ask you to submit these documents during application: 

• A signed business loan agreement
• Mortgage statement (if you own the property) or lease agreement (if you rent)
• Updated government-issued picture ID of all owners
• Bank statements from the last three months
• Most recent business tax return (for loans over $100,000)

Lending Club

Are you looking to finance new inventory and equipment? Are you thinking of increasing your marketing budget? Or perhaps, you need to repair or remodel a facility soon. If your answer to any of these questions is yes, Lending Club might be able to help.

Lending Club is considered a giant in the business with over $50 billion total amount loaned to more than 3 million customers. Like Lendio, it is also a financing marketplace and a big one at that. Its network spans wider than Lendio’s though, and that’s because it’s mostly P2P. Meaning, you can borrow from a person instead of a lending firm. 

While P2P lending expectedly has higher interest rates than the typical B2C lending, Lending Club has loan programs with regular interest rates, some even as low as 4.99%. You can loan up to $500,000 or as small as $5,000, and obtain all of that upfront in a lump sum. Furthermore, there are no prepayment penalties, so you can pay off a more significant portion of the loan whenever you’re ready. 

Kiva

Let’s take a short break from interest rates and check out this next option. Are you looking for a business loan with absolutely no interest? It may seem impossible, but something like that exists. Check out Kiva, a 501 nonprofit organization based in San Francisco, California. They’ve been lending money at 0% interest to low-income entrepreneurs and students across 77 countries since 2005. The loan they offer is more of a mix between crowdfunding and P2P lending than B2C lending like most other loan types.

Unlike premium services, free loan options like Kiva have their fair share of hassles. Apart from having a considerably longer and trickier application process, Kiva only offers microloans of up to $10,000. The application process takes about 30 minutes, and you have 15 days to prove your creditworthiness. 

After that, you need to post your application on the Kiva marketplace to let 1.6 billion lenders across the globe know about it. Not everyone feels comfortable letting other people know about their financial situation. This option is certainly not for those looking for fast access to massive funding.  

SmartBiz

While most online business loan marketplaces connect you to alternative lending options, SmartBiz gives you access to a network of banks offering government-backed SBA loans. Through SmartBiz, you can borrow up to $5 million at a 6.25% to 8.50% interest rate with a 10 to 20 years term length. 

Because this type of loan is more secure than most alternative loan programs, it comes with stricter qualification requirements. For instance, to qualify for a $30,000 to $350,000 SBA loan, your business must be at least two years old and based in the U.S. Your credit score must be above 650, too. You must be a U.S. citizen age at least 21 years with no outstanding tax liens and overdue loan payments. Lastly, you must have no foreclosures and bankruptcies in the past three years.

The qualification terms get even stricter when you’re applying for a commercial real estate loan between $500,000 and $5 million. To qualify, your business must be active for at least three years and must occupy at least 51% of the real estate to be financed. Your credit score must be above 675, and you must have enough cash flow to support debt. Moreover, you must provide three years of tax returns and financial information that reflect no defaults and delinquencies on government loans.

How to Search for the Best Business Loan for Your Needs

Hopefully, we’ve helped narrow down your choices when it comes to the best loan for your small business. Now, let’s go through how you can evaluate the lender, so you can choose from the list.

Choose a Loan Type

Before you start searching for a lender, you must first choose the type of loan that you need. Compare their features and pick one with the most desirable terms.

If you’re looking for a loan that you can pay in fixed installments over a period of time, choose an installment loan, which is offered by almost all financial institutions.

Short-term loans are a similar type, which you also pay in fixed installments, but within a shorter period, typically 12 weeks to 18 months.

Don’t want to borrow more than the amount you need? Consider using a business line of credit, a revolving line of funds that you can draw from at any time, but you only have to pay interest on the amount used.

For government-backed, low-interest loans, go for an SBA loan. You’ll find the terms favorable, especially for new businesses.

Need to purchase expensive business equipment?

In that case, take out an equipment loan where the equipment becomes your collateral. 

Lastly, if you’re a retailer and need to borrow against your future revenue, a merchant cash advance may be a suitable option.

Figure Out the Type of Lender You Need

Now, it’s time to choose the lender.

Depending on your loan size and terms, you can look for it from national banks or small local banks.

If you think you have a slim chance of qualifying for bank loans or you simply want more flexible terms, credit unions, alternative lenders, loan marketplaces, crowdfunding services, or P2P lending providers might have what you need. 

There are also nonprofit lenders you can explore if you are trying to avoid interest rates altogether.

Decide the Amount Required

Before shopping around for loans, determine how much money you need. Business loans usually range from $5,000 to $5 million depending on the lender and the loan type. There are lenders who will never go beyond $10,000, so make sure you’re not wasting your time applying there.

Loan Terms, Interest Rates, and Extra Charges

Read the fine print. Each loan type comes with a unique set of terms and interest rates, which varies based on the borrower’s credit rating. When choosing a business loan, the rule of thumb is to always find the option with the longest term length and the lowest interest rate. 

Consider looking for one with a zero prepayment penalty, too, so you can pay off more of the loan if you have free cash, without incurring additional interest charges. 

As always, calculate the amount you’ll pay over the term of each loan type, including interest rates and other fees.

You should also read and understand the loan terms and conditions before signing any document, and ensure your contract is free of hidden charges and provisions that might significantly affect the total loan amount.

Watch out for extra fees, such as fixed monthly fees or origination fees as well.

Qualification Terms

Do you qualify? Creditors will require a few things from you before they lend you funds. These include the following:

• Your credit score
• Your business location
• Your age
• Your monthly or annual revenue
• Your years of operation

For government-backed and high-risk loans, creditors usually ask for other documents, such as tax returns and financial statements. If you meet their minimum requirements, you’ll normally qualify for the loan. 

Processing and Funding

The length and complexity of the application process varies from platform to platform.

On some, you only need to fill out a form, which takes less than 10 minutes to finish, while others will ask you to submit financial documents right away.

Some creditors will send you the funds within the day, while others will ask you to wait months. Determine how soon you need the money. If the situation is not that urgent, choose to wait instead of getting high-interest rates on fast cash loans.

Conclusion on the Best Business Loans of 2021

Finding the best business loan for your needs is easy if you know where to look. Now that you have the list of the best lenders, all you have to do is identify the loan matching your (1) qualifications and (2) specific financing needs. 

Still don’t know which lender to go for? Try these funding marketplaces instead:

•       Fundera – Funds faster than banks and trusted by 85,000+ businesses
•       SuperMoney – Provides competing offers from multiple companies at once
•       Biz2Credit – offers up to $6 million business loans within 72 hours

Taking out a business loan is a big decision. Don’t rush it. Discuss it with your co-founders and management team. You may also want to get advice from financial experts like LendingBuilder before applying for any loan online.