Compare the Best Small Business Loans — Updated for 2022

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Compare the Best Small Business Loans — Updated for 2022

Just about every entrepreneur has heard the saying, "You need to spend money to make money." Granted, that doesn't mean you need to spend more than you can afford, but it does mean you might need to invest in your business to ensure its success.

But what if you don't have the cash required to do so? Small business loans might be the answer you're looking for. There are several types to choose from, so we've rounded up all the major options so you can pick a small business loan that works for you.

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Compare Small Business Loans for 2022

It's been a whirlwind couple of years for small business owners nationwide, and with the SBA's Paycheck Protection Program (PPP) having ended on May 31, 2021, entrepreneurs must turn to other types of funding.

If you've decided a loan is right for you, choosing which type to go with can be difficult. For the best results, you'll need to compare each loan type's requirements, pros and cons.

From traditional loans via national banks to alternative loans you can get approved for in just a couple of days or less, everything you need to know is right here.

Bank Loans

Loan Amounts
$564,000 large national banks; $184,000 smaller national or regional banks
Min. Credit Score
High 600s
Min. Business Age
2 - 3 years
Interest Rate
2.54% - 7.02%
Top Lenders
Bank of America, Chase, Citibank, Capital One, TD Bank

Small Business Administration (SBA) Loans

Loan Amounts
$107,000 on average
Min. Credit Score
Personal: high 600s; FICO Small Business Scoring Service: ~155
Min. Business Age
Several months - 2 years
Interest Rate
5.5% - 8%
Top Lenders
Live Oak Bank, Huntington Bank, Newtek Small Business Finance, Celtic Bank

Online Term Loans

Loan Amounts
$80,000 on average
Min. Credit Score
500 - 600
Min. Business Age
6 months
Interest Rate
9% - 99%
Top Lenders
Kabbage, BlueVine, Credibly, Lendio, OnDeck

Business Lines of Credit

Loan Amounts
$22,000 for shorter-term options on average
Min. Credit Score
600
Min. Business Age
1 year
Interest Rate
10% - 99%
Top Lenders
Kabbage, Bank of America, OnDeck, PNC Bank, Fundbox

Equipment Financing

Loan Amounts
Up to 100% of equipment value
Min. Credit Score
550 - 600
Min. Business Age
1 - 2 years
Interest Rate
2% - 30%
Top Lenders
Crest Capital, National Funding, Balboa Capital, Kabbage

Startup Loans

Loan Amounts
$20,000 - $80,000 on average
Min. Credit Score
600
Min. Business Age
0 - 1 year
Interest Rate
5% - 30%
Top Lenders
SBA microloan lenders, Finance Factory, OnDeck, Lendio

Merchant Cash Advances

Loan Amounts
$10,000 - $500,000 on average
Min. Credit Score
500 - 600
Min. Business Age
3 - 6 months
Interest Rate
40% - 350%
Top Lenders
Credibly, Rapid Finance, Greenbox Capital

Invoice Financing or Factoring

Loan Amounts
85% of invoice value
Min. Credit Score
500 - 550
Min. Business Age
0 - 1 year
Interest Rate
10% - 80%
Top Lenders
Fundbox, Kabbage, FundThrough

How to Get a Small Business Loan

Now that you know your business loan options for 2022, how can you go about actually getting one?

In most cases, the process can be boiled down to five essential steps:

  1. Calculate your needs.
  2. Locate your funding source.
  3. Review and compare your options.
  4. Get qualified for your chosen loan.
  5. Prepare the necessary documents.

How to Decide Which Small Business Loan Is Right for You

Still not sure which type of small business loan to pursue? This might help you narrow down your choices.

A bank or SBA loan could be a good fit for you if:

  • You have a great credit score (high 600s or more).
  • Your business has been up and running for about one year or more.
  • You have strong and well-documented revenue.
  • You don't need your funds in less than a month's time.
  • You need a loan with a low interest rate.
  • You need a loan of about $100,000 or more.

An online term loan or business line of credit could be the best option for you if:

  • You have a minimum credit score of 500 to 600.
  • You've been in business for at least six months to a year.
  • You need funds in about two days' time.
  • You're willing to pay a higher interest rate.
  • You need a loan of about $20,000 to $80,000.

A startup loan might be best for you if:

  • You have a credit score of 600 or higher.
  • You're looking for a loan with low business age requirements.
  • You can offset your business' young age with either cash, collateral or an exceptional credit score.
  • You're prepared to pay an interest rate of anywhere from 5 percent to 30 percent.
  • You need a loan of $20,000 to $80,000.

Equipment financing might be right for you if:

  • You have a credit score of at least 550 to 600.
  • You need up to 100 percent of your equipment expenses covered.
  • You've been in business for at least one year.
  • You need to own your equipment outright.
  • You can pay an interest rate ranging from 2 percent to 30 percent.

Finally, a merchant cash advance or invoice financing could be your best bet if:

  • You have a credit score of 500 or more.
  • Your business has been around for a few months or longer.
  • You receive most of your money from customers via invoices (if applying for invoice financing) or credit card payments (if applying for a merchant cash advance).
  • You need a lump sum of cash ASAP.
  • You're prepared to pay an interest rate of 10 percent to 80 percent (for invoice financing) or 40 percent to 350 percent (for merchant cash advances).
  • You need a loan alternative with requirements that are as flexible as possible.

Ultimately, there's no such thing as a one-size-fits-all small business loan. But by carefully evaluating your needs and each potential lender's requirements, you can find one that works for your timeline, budget, and business style alike.

And if you determine that an alternative loan is the way to go, check out our loan partner, Kabbage. With speedy application and approval times, flexible requirements and state-of-the-art security, Kabbage makes it easy to get the funding your small business needs to grow.

Business Loans from Kabbage are Designed to Help Your Business Grow. Get Started Today.

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