Best banks for small business loans in May 2025

Wells Fargo’s lines of credit are specially designed to help small businesses at different stages of growth. The SBA-backed line has smaller maximum loan amounts compared to other business lines of credit offered by banks but welcomes startups. Its unsecured credit line is good for established small businesses. The secured line caters to high-revenue businesses bringing in at least $2 million annually. You can access anywhere from $100,000 to $1 million with the Wells Fargo secured line.

• Repayment terms up to five years 
• No annual review for renewal
• Automatic enrollment for rewards program
• Low interest rates

PNC Bank works best for business owners comfortable applying in person, as the bank doesn’t offer an online application process. It’s also best if you want low loans for the fastest approvals. You can borrow up to $100,000 with an unsecured loan and even higher amounts for secured loans, so long as you put down collateral and meet the revenue and credit requirements. 

• Fast approval times
• Loan amounts up to $5 million
• In business since 1957
• Around 2,500 physical locations

Business owners in eligible states who want to work with a local bank may appreciate the options available at Huntington. Given its status as a top SBA lender, it’s also a good choice if your business needs an SBA loan.

• Established in 1866
• More than 1,000 branch locations
• Loan terms up to 25 years
• Loan amounts up to $5 million
• Top SBA lender

TD Bank states it considers all business loan applicants, no matter their time in business. This makes it a solid option for startup businesses as well as established businesses. You can also speed up the application process by applying online for term loans under $250,000. Because of where it operates, it’s only a viable option for people who do business on the East Coast. 

• More than 1,100 branches
• Fast approvals
• Accessible to startups
• Generous loan limits
• No minimum time in business requirement

Live Oak Bank works if you’re looking for an SBA or USDA rural development loan from a fintech bank. Business owners will need fair personal credit scores of at least 650, which beats many other banks that require personal scores of 670 or higher. Since the bank operates fully online, it’s not ideal for people who want in-person assistance with their loans.

• Available in all 50 states
• SBA Preferred lender
• Generous loan limits
• In business since 2008
• Fully digital

If you’re looking to build credit, you can access Bank of America’s cash-secured credit line as long as you have been in business for at least six months and have an annual revenue of $50,000. It works well if you want to establish a lending relationship there but don’t qualify for its other business loans. You will need to put down a $1,000 security deposit, and your credit line will equal the amount of the security deposit.

• Available in all 50 states
• Low interest rates
• Brick-and-mortar locations 
• Variety of loans available
• National reputation

The most common type of bank loan for business, a term loan, lets you borrow a lump sum to cover business expenses. Term loans are accessible through most banks and credit unions, and loan amounts range from $5,000 to the millions. Still, you’ll likely have to generate a sizable amount of revenue and provide a personal guarantee to qualify for funding. Furthermore, you can expect higher borrowing costs if you’re starting out in your business.

Best for businesses with:

• A high credit score and time in business
• Consistent revenue 
• A set idea of how much funds they need

A business line of credit (LOC) is similar to a business credit card, providing a pool of cash you can use for short-term borrowing costs. As you pay down loans that you withdraw, the credit limit replenishes, allowing you to borrow from the credit line in the future. Lines of credit from banks have long repayment periods, though you could pay more in interest if you don’t pay your balance off quickly. Bank LOCs also tend to have annual fees, though some lenders may waive that fee for the first year.

Best for businesses with:

• Flexible lending needs
• Lower lending amounts
• Variable expenses

Backed by the Small Business Administration, SBA loans are loan products featuring competitive rates and generous loan terms to meet the needs of small business owners. The most common types of SBA loans offered by banks are theSBA 7(a) loans and 504 loans. They’re accessible through SBA-approved lenders you can locate through the SBA Lender Match Tool.

SBA loans from banks have a few downsides. Eligibility requirements can be tough, and traditional banks may not offer SBA microloans or work with Community Advantage Small Business Lending Companies, which have more relaxed eligibility requirements. SBA loans also come with an application process that’s challenging to navigate. Plus, it could be several months before the loan proceeds are disbursed to you.

Best for businesses with:

• A need for a lower interest rate
• Time to wait for loan approval
• Access to an SBA lender

You can use a commercial real estate loan to purchase or lease a physical space for your company. Some lenders offer up to $5 million in funding with extended repayment periods and competitive interest rates. However, qualifying may be difficult if you’re starting out or your revenue is on the lower end. Plus, you can expect a lengthy application process.

Best for businesses with:

• A need for commercial real estate
• A plan to stay in the same location for the loan term
• High revenue and time in business

If your company needs pricey equipment to keep operations moving smoothly, this funding option may be ideal. Equipment loans are secured by the equipment purchased and often come with attractive interest rates. The loan term you’ll get is based on the amount you borrow and the useful life of the equipment.

Best for businesses with:

• A specific need to finance equipment
• Equipment that can be used as collateral
• A plan to use the equipment after the loan is paid off

You might also look into business grants, which don’t have to be paid back. Grants can be competitive and hard to qualify for and may require extensive documentation depending on the grant. Expect to provide information about your business, goals and how you plan to use the grant. However, grants are open to underrepresented groups that typically have trouble gaining access to business financing. This includes:

• Women
• Black female entrepreneurs
• Minority business owners
• Veterans
• Formerly incarcerated individuals
• LGTBQ+ business owners

Some banks offer special bank loan options for low-income or minority communities. Typically, these loans focus on businesses that wouldn’t qualify with traditional lenders. They may lower requirements or work with businesses on a case-by-case basis. These are often provided through special purpose credit programs (SPCPs) authorized by the Equal Credit Opportunity Act. 

Microloans are business loans offered in small amounts, designed to help small businesses get off the ground or fund a small purchase. They’re available through nonprofits, SBA-approved lenders, traditional banks and online lenders. Microloans don’t have a set standard loan amount, but SBA microloans offer up to $50,000 in working capital. Some lenders may charge higher borrowing costs than you’d get with standard business term loans, as these loans cater to newer businesses and pose an elevated risk to lenders.

Crowdfunding helps entrepreneurs raise small amounts of cash from individual donors to fund business purchases. There are several types of crowdfunding methods, including rewards, donation, debt and equity crowdfunding. It can take a lot of work to set up and successfully raise enough capital through crowdfunding. Popular sites like Kiva and Indiegogo are good options for startups and small businesses that struggle to qualify for funding through traditional lenders.

Business credit cards are typically easier to qualify for compared to a business bank loan. They also come with perks like rewards, interest-free grace periods and additional benefits that may make them a better fit for borrowers looking for short-term financing. Be aware of the interest rates, though, which can range from 18 percent to 30 percent, and are often higher than what you could find with a business loan or line of credit.

Peer-to-peer lending (P2P) is another form of alternative financing that bypasses traditional banks. P2P platforms match borrowers in need with lenders or investors. Funds can come from one or more sources, and borrowers repay the loan, plus interest. Payments are made to the P2P platform, which then repays the lender.

You can access funding to meet your company’s short-term needs with a merchant cash advance. Funds are disbursed in a lump sum and payable to the lender through a percentage of your future sales — typically over a short loan term of one year or less. Lenders use your credit card sales volume to determine the amount you’re eligible to borrow, so bad credit isn’t necessarily a deal-breaker.

But it’s one of the most expensive forms of business financing. Since it’s not subject to usury laws, borrowers could get stuck with interest rates that soar into the triple digits. 

Both funding options allow you to borrow against your unpaid receivables. But there’s a key difference between the two. Invoice financing involves receiving an advance of up to 90 percent of your company’s accounts receivables, and you’ll repay the lender the amount you borrow (plus fees) once the invoice is paid.

If you choose invoice factoring, you’ll sell the outstanding invoices directly to a factoring company in exchange for a lump sum of up to 90 percent of what’s owed. The client will pay the lender directly, and any amount that remains after fees are deducted will be distributed to you.

Access to small business funding is a challenge for many business owners. Rate hikes and bank turmoil have led to lenders tightening credit standards and eligibility requirements. This can make it difficult for startups, bad-credit borrowers and business owners in underserved areas to get approved for small business loans. 

Our experts consider several factors in this category and award higher scores to lenders that offer flexible loan amounts, fast approval and funding and inclusive time in business and annual revenue requirements.

The affordability of a business loan often depends on a business owner's financial profile. A business with high revenue and a flexible budget will likely be able to afford most loan options. Businesses considered high risk, such as startups or those with bad credit, may struggle to find loans with affordable interest rates and reasonable fees. 

We consider a business loan affordable if the payments are manageable, you have the lowest possible rate based on your creditworthiness and there are minimal fees. Lenders that have lower rates, offer rate or fee discounts and have minimal fees receive higher scores. 

A good customer experience requires a lender to be transparent, efficient and responsive. Reputable lenders that value their customers are easy to communicate with, responsive to your questions and concerns and willing to go the extra mile to make sure you have a positive experience for the life of the loan.

Lenders offering online accounts and applications and a range of customer support availability score higher in this category. 

While the Truth in Lending Act (TILA) protects consumers against unfair or harmful lending practices, it doesn’t apply to business loans. This can make it harder to get straightforward and upfront information on loan costs when comparison shopping. We score lenders that make it easy to find rates and fees, as well as eligibility and credit score requirements, higher than those who do not disclose information.

Loan flexibility is finding a loan to meet your needs, even if you don’t have high annual revenue, several years in business or the best credit score. Loan flexibility can look like lenders that offer multiple lending products, variety in loan terms or unique options to give business owners the opportunity to fund their businesses in a way that works for them.

Lenders scoring high in this category offer varied products and services to cater to all types of borrowers and businesses.